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AN ANTHOLOGY OF INTERNATIONAL BUSINESS REPORTS February – May 2012


Appendix 1. Team Business Proposal Title Page

Team 33 Client (Company): Google Product/Service: Google University Team members : Name

Country

Did Not Participate (please make a note if this teammate did not contribute during the project, has not replied to emails, etc.).

Zachariah R.

USA-FL

Brous, Attila Tomos,

Romania

Emir Orhan,

Turkey

Mohammed H.,

UAE

Aljanahi, Tria Ridiantry

Indonesia

Manuel MuĂąoz

Spain

He never contribute or communicate with us

Saiz,

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By : TEAM #33 X-Culture Project

Zachariah R. Brous,

USA-FL

Attila Tomos,

Romania

Emir Orhan,

Turkey

Mohammed H., Aljanahi,

UAE

Tria Ridiantry

Indonesia

IYC Collaboration Project–Google University

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Table of Contents Executive Summary .......................................................................................................................3 Google Company Description..........................................................................................................4 1. Product/Service...................................................................................................................6 2. Target market......................................................................................................................7 3.

Consumer Segment ............................................................................................................8

4. Production site or service personnel Location....................................................................9 5. Entry Mode .......................................................................................................................12 6. Staffing .............................................................................................................................16 7. Marketing .........................................................................................................................16 8. Payment Arrangements ....................................................................................................18 9. Capital...............................................................................................................................19 10. Likely Challenges .............................................................................................................20 References ......................................................................................................................................22

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Executive Summary

Nowadays, Google becomes world's largest content companies. Because Google has an effective monopoly on search, e-mail, maps and so many other services . Google University to build a case that has not been and will be a strong rope that can maintain the position of the next Google. Google University will be an institute for individuals that are looking for educational excellence. Google University will offer its students a new mindset that will strive for success by being innovative, creative and thinking critically. There are a lot of Universes in the market, yet Google University will be exceptional since graduates will have the chance to work for Google. Therefore it will attract more potential students and employees. The University will target individuals with academic excellence. Since, they can be potential employees that Google looks for and will able to assess their performance from the watching them up close in the university. The objective of Google University in the short term is to have a bigger pool of creative and innovative employees, thus helping it to sustain its competitive advantage. .

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Google Company description

Google Inc. is an American multinational Internet and software corporation specialized in Internet search, cloud computing, and advertising technologies. It hosts and develops a number of Internet-based services and products and generates profit primarily from advertising through its AdWords program. Google was founded by Larry Page and Sergey Brin while they were students at Stanford University. The company was officially launched in September, 1998 in a friend’s garage. In one of the most anticipated Initial Public Offerings (IPO) Google raised $1.67 billion in August of 2004. Today, Google has over 12,000 employees in offices throughout the world. Google’s mission statement and corporate culture reflect a philosophy that you can “make money without doing evil” and that “work should be challenging and the challenge should be fun”. These beliefs dominate life at Google. The official mission statement of the company is to “organize the world’s information and make it universally accessible and useful.” In 2006, Google was selected by MBA students as the ideal place to work. In 2007 and 2008 Fortune Magazine named Google the Number 1 employer in their annual 100 Best Companies to Work For. In the United States, Google has offices in several states, including California, Illinois, Massachusetts, Arizona, Michigan, New York, Texas, North Carolina, Oklahoma, South Carolina, Pennsylvania, Oregon, Washington (Seattle) and Washington, DC. They currently have hundreds of openings in Engineering, IT, Operations and Support functions. IYC Collaboration Project–Google University

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Some of the current openings at Google:. 

Current job postings in Engineering include openings for Software Engineers with extensive experience in C++ programming and in java programming. There are also a lot of openings for Testing Engineers and a few for Web Designers.

The current postings for Operations and IT include openings you would find in many Information Technology departments, including System Administrators and Help Desk Technicians. There were dozens of openings in their Data Center as of this writing.

Google actively recruits college graduates, with a special website section specifically for students. Google offers both internship and full time employment opportunities on their student recruitment pages.

Google also has offices internationally. While much of the information presented here refers to Google’s US offices, they currently have hundreds of Google Openings Worldwide in areas such as Asia-Pacific, Europe, the Middle East, Africa, and the Americas. I counted openings in 57 worldwide locations, not including those in the United States.

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1. Product / service

Google University is bold step that will help Google maintain its competitive advantage and ensure that it will sustain it for a long term. Google University will attempt to find potential employees for Google and benefit from the research conducted by the students. Employees will be chosen based on their senior project and performance in Google University. There will be different criteria that Google will take into consideration in order to recruit their current students such

as

innovation

and

creativity.

On the other hand, Google will not only benefit by applying human resource best practices, but it will economically benefit from the students that will enroll in Google University to earn their bachelor degree. Josh Bersin, the chief executive and president of Bersin & Associates states that “outsourcing can be a very expensive venture” (Human Resources Journal, 2011). Therefore, it is much more cost efficient for Google to use internal recruitment through their university than outsourcing the recruitment process. According to John Sullivan Google has planned to double its workforce (Sullivan, 2005). This means that the company will need to recruit more employees which will be costly and could affect the company’s corporate culture. Human Resources Journal states that “For a company that has more than 10,000 employees across the globe it will pay roughly $1,900 per new hire” (2011). If Google is willing to double its

work

force

it

will

have

to

pay

Current Employees Future Employees

IYC Collaboration Project–Google University

$1,900

per

new

hire.

Cost

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10,000

20,000

$ 19,000,000

Establishing a University will ensure that Google will cut down on recruiting cost in the long run. On the other hand, most universities throughout the world are generating revenue. Daniel Leblanc states that in Canada “Across the country, universities earned revenues of $14.9-billion, but they spent only $14.2-billion, for a surplus of $700-million� (Leblanc, 2001). This trend is observed throughout the world, although Universities spend a lot of money but they do generate revenue. In addition, to tuition fees Universities generate revenue by selling their research. New York University has gained $157 Million through means such as selling their research and licensing (Farrell, 2008). Therefore, by establishing a university Google will benefit from the potential talented employees it can recruit and benefiting from the research it could use or sell to other companies. Moreover, Google University will ensure long term competitive advantage for Google. In addition, it will ensure that Google recruits talented employees, while benefiting from the tuitions fees and research revenue.

2. Target Market For Google University

Target Marketing is crucial in centralizing where a company will do business. companies may find it useful to globalize its productions or services. Some find it appealing to market in a specific location because of costs, political risk or economic advantages. The proposed service which is Google University, will be located in India. the geographic location brings many benefits for IT companies located outside of India. Due to the economic stability's of other countries, specifically United States, India seems quite promising in this business venture. Many

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organizations like Oracle, which is a software company, are hiring at an outstanding rate compared to the US. Many US companies are shifting jobs overseas because costs are much lower in foreign countries. Another great advantage of India is its academic system and a strong focus on English-speaking employees. India’s shire size of population also boosts companies to migrate with India being a large size of the US tech industry.

3. Consumer Segment

Google wants to employ the brightest minds for the job. In order for that to be accomplished, Google University must recruit those bright minds into its university. The consumer segment most appropriate to fit that job, is college graduates. Google University wants young energetic individuals fully accustomed to today’s technological world. Technology is always reinventing itself, so companies need people capable of adapting. Google University will focus its segment on pure differentiation. The strategy known as differentiation is a concept where companies will focus to create a product or service unique compared to other competitors. In that regard, differentiation may require higher costs compared to low-cost strategies, but out performs in quality and effectiveness. Many companies such as Bose, which is a Speaker company, segment their market to higher income consumers with higher buying power. Information in technology is a serious battle ground and Google needs to be as differentiated as much as possible. Its services of teaching new Google employees the art of collaboration and company loyalty will make Google more paramount in its field. Google already has a great market share in its industry, servicing billions of people all over the world, and Google University will keep that market growing.

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4. Production site or service personnel location

Google University should be established in India based on the assessment of the market potential, legal and political environment, levels of competition and cultural influences.

Market Potential:

India is the world second populous nation with 1.2 billion people (CIA, 2012). This means there will be a high number of individuals that will require Google University’s services. In 2011 India’s GDP was $1.843 trillion (CIA, 2012). Economists expect this number to rise since India is one of the BRIC countries and is attracting a lot of inward FDI. According to Government of India in 2009-2010 the inward FDI was $100,539 Million (Government of India, 2009). Indicating the growth of the Indian market, making it more competitive, therefore there will be high emphasis on education which Google University can benefit from. On the other hand, India’s GDP per capita is $3,700, yet this number should not threaten Google, since India is a populous country as mentioned earlier and there is a big gap between the social classes.

Legal and Political Environment:

India’s legal system follows common law. Common law is law that is derived from other cases and each case becomes a precedent for future cases. Yet, within the common law different IYC Collaboration Project–Google University

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religions can act using their religious beliefs and laws on an individual level. Moreover, India is political system is democratic. According to the Corruption Perception Index India scored 3.1/10 on corruption (Corruption Perceptions Index, 2011). Although this number is high, but the Indian government is going through reform and tackling corruption. There are some barriers that would be faced by Google. Raychaudhuri and De argue that there are various trade barriers on higher education services such as persistence that the provider be accredited in the home country, limitations on certain disciplines (Raychaudhuri & De, 2007). Through mutual understanding both parties can overcome those trade barriers. Furthermore, in 2010 the Indian government has approved a bill that allows foreign universities to build campuses and operate in India (BBC News, 2010). This shows the support of the Indian government for education and foreign universities. Therefore, India is a politically and legally ready to accept foreign universities.

Levels of Competition:

There are 505 registered universities in India (4 International Colleges and Universities , 2012). Inferring that there is a high level of competition between universities whether they are state or private owned. According to the report “Higher Education Finance and Cost-Sharing in India� states that the tuition fee in 2001 was only for a state university is only $85 (Graduate School of Education, 2001). Although this fee seems low, Google University will gain revenue through selling books, providing transportation and selling food on their campus. In addition, the lower the fee is the more the individuals Google can target. On the other hand, there will be competition since in 2010 Indian passed a bill that allows foreign universities to build campuses

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and

operate

them.

Cultural Influences:

Google is an American company which is influenced by the Anglo-Saxon culture. It emphasizes on power resistance, thus employees confront those who are above them in the hierarchy. In addition, it is famous for its low context culture, employees say what they feel and the words are only important and not the context nor the tone. Google emphasizes Uncertainty and tries to come up with innovative and new ideas. Moreover, time is oriented towards the future, the company culture thinks of how its decision will turn out and impact them in the long run. Not, forgetting the individualistic approach of individuals in Google’s culture. On the other hand, the Indian culture is different. There is high power tolerance; individuals respect those above them in the hierarchy. It is a high context culture, how things are said and their context is as important as words being said. The Indian culture avoids uncertainty and prefers to operate in what is known to them. Time is oriented towards the short term and the present only, disregarding how their policies or decisions can impact other in the future. The culture emphasizes on collectivism and the greater good of the group. Google University can help instill a lot of Google’s corporate culture characteristics in its students and future employees therefore impacting

a

small

portion

of

society.

Therefore, Google University should be built in India. Furthermore, the University will educate enrolled undergraduates at Google University. The University’s main goal is to build a

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unique mindset for their students based on creativity, innovation and critical thinking throughout their different disciplines. The University will establish IT, Computer Engineering and Business disciplines. In addition, top performers and individuals with unique research and graduation projects will be recruited to work for Google. Thus, creating a long term sustainable competitive advantage based on knowledge. 5. Entry mode Opening a school is a herculean task in India. Despite this, more and more people are coming forward to start a venture because the demand for schools seems to be unending. A school is a unique business. Unique because it cannot even be called a ‘business’. Running a school is considered a not-for-profit venture, but you just need to look around to see that the business opportunity is huge. According to an estimate by an NGO active in the field of education, there are more than 14 lakh children in Delhi alone who seek admission every year in various classes. Schools cannot be set up by private entities. They have to be run by a society formed under the Societies Act of 1860, or a trust under Public Trust Act as existent in different states, or by forming a company under Section 25 of the Companies Act 1956. In other words, a school has to be set up strictly as a non-profit business. At least that is the theory. Setting up a school is not just about constructing physical infrastructure in the form of building classrooms and setting up libraries and laboratories. It does involve obtaining permissions and licenses from concerned authorities at various stages. It starts with the setting up of a trust or a society, with a governing board of five or six members, with a president, chairperson, and a secretary duly identified, as specified under the law. This article will focus

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primarily on identifying the various steps involved in opening a school, providing facility for the study for students from Class 1 to Class 10. This is the following is the detailed procedure required to open a school: First, in order to open a school, an association or a group of individuals has to be registered as a society under the Societies Recognition Act, 1860 or as a trust constituted under any law for the time being in force. This is to prove the “non-profit’” motive of the society. Second, the society then needs to obtain an “Essentiality Certificate” (EC) from the DoE. An EC is an essential document certifying the requirement of a school in the particular zone, on the basis of which land is allotted to the society for the purpose of building a new school. An EC is stipulated to avoid proliferation of schools, which could make existing schools redundant. The DoE decides the need for a school in a particular zone. By restricting the supply of schools in an area, it restricts the role of the market in assessing the demand for school education. Within 3 years of obtaining the certificate, the construction of the school has to commence, failing which the society has to apply for renewal. Along with the application for EC a fee of Rs. 500/- and a set of 11 documents are to be submitted. An EC is granted after certifying the non-proprietary nature of the society, the financial status of the society, the association of members et al. The above is issued as per rule 44 of Delhi School Education Rules,1973. Third, land is allotted to the society for purpose of the new school in the desired zone. For land to be allotted, the society needs to obtain a “letter of sponsorship” from the DoE . This is forwarded to one of the land owning agencies like the DDA or MCD and the land is sold at subsidized rates by the land owning agency. Surprisingly, an acre of subsidized land in South-

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Delhi costs Rs. 82,50,000/- and in places like Vasant Kunj it goes up to Rs. 1.25 crore. Thus only on the approval of the DoE, can land be allotted to the society in question. Fourth, once the school has been established, the school authority needs to apply for recognition with the concerned authority. Recognition up to V standard is granted by MCD and up to VIII standard by the DoE. For further recognition up to X and XII standard, application for up gradation has to be submitted with a minimum gap of 2 years. To obtain recognition from DoE, a set of 17 documents is to be submitted along with the application. These also include a wide array of secondary licenses, for instance, a duly approved Scheme of Management, Completion Certificate, Sanctioned Building Plan, Water Testing Report, Health Certificate. All this is governed as per the rules mentioned in Delhi Education Act, 1973. Lastly, a school needs to apply for affiliation with CBSE. Only on affiliation with CBSE can the students of the particular school appear for public examinations.

In order to get

affiliated, the school needs to follow the prescribed syllabi and books (NCERT). Prima-facie, the laws do not appear worthy of any harm, but personal experiences of school authorities speak otherwise. Given below is a list of licenses and documents required to open and operate/run a school: Name of license

Governing Act

Regulating authority

1

Registration Certificate of Society

Societies Recognition Act, 1860

2

Essentiality Certificate

Delhi Education Act ,1973

DoE

3

Certificate of Recognition

Delhi Education Act ,1973

MCD / DoE

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4

Certificate of Upgradation

Delhi Education Act ,1973

DoE

5

Certificate of Affiliation

Affiliation Bye-Laws

CBSE

6

Certificate of MCD

MCD

7

Affidavit regarding proper violation

MCD / DDA

of master plan in the land used 8

Site

Plan

of

the

Building

/

MCD / DDA

Sanctioned Building Plan

approved

9

Building Fitness Certificate

MCD

10

Health Certificate

MCD

11

Water Testing Report

Delhi Jal Board

12

Completion Certificate

DDA

13

Duly

approves

Scheme

of

DoE

No Loan Certificate against FD

Bank

Management 14

issued by the bank 15

Land Use Permitted Certificate (in

Landlord

case of rented land)

Documents to be submitted along with application for EC/ Recognition/ Up gradation: 1

Memorandum of Association

2

Affidavit regarding relationship of society members

3

Copy of Reserve Fund for Rs. 2 lakhs from the bank

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4

Affidavit from management regarding proper operation of school, as per Delhi School Education Rules ,1973

5

Undertaking regarding fees and other charges

6

List of members of society with full particulars

7

Details of land and building

8

Project report of proposed school

9

Experience of society / members in the field of education

10

Scheme of Management

11

Documents regarding ownership of land allotted to school

12

Auditor’s statement as Performa

13

Staff statement as Performa

14

Rates of fee and other fund charges

15

Enrolment of students

6. Staffing

Google's planned university in India was built from the

data and

procedures and

policies of India then it requires a considerable extra to the government and the community. For staffing itself should follow the applicable rules and authority and executed in India. Therefore it would be more well if its workers in greater numbers recruited from India collection or community leaders. Still need a reliable experts from Google to be able to lead and bring them to a

point

each.

For his students and himself, taken a bigger quota than India first .Allowed by selection

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or scholarship. And then all the students from around the world to be able to enter it. Very certainly if Google is really building a lot of Google's university students will be teachers of universal feast or want to get involved and get in it.

7. Marketing

The education industry is increasing so fast, both size and complexity. There are more than 17 thousand universities world-wide and best ones are in United States. The key to be the best, or say one of the best university is about continuously improving your campaign. Harvard University is a clear example of the that. When asking their CEO about why “Harvard is the best?” you get replied by a famous quote. “Harvard is the best because it's Harvard.” Google University will have comparable same prestige at the end of it’s 5th year or sooner. The brand name itself, “Google” is prestigious itself. When it comes to marketing, we’ll focus on our strengths. Google is famous around the world for being #1 search engine and for their comfortable work areas, high-tech computers, their nice attitude towards staff and a satisfactory salaries. Combining our experience and dynamics, Google University will be successful within it’s first years by using it’s strengths: No advertising on every newspaper, TV channel, radio program instead on internet where you’ll focus to potential student directly. To explain that, using every kind of communication method would not be the smartest idea; instead using efficient and technological methods would give us prestigious look we want. If Google workers can get comfortable areas for working and being successful with it, why not giving comfortable areas for students as well? Instead of classic theme on universities we’ll build something different. Up on building our university we’ll work with world known IYC Collaboration Project–Google University

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painters, musicians, athletes, cookers, doctors businessmen all around the world for the most suitable and comfortable places ever. Every single company on earth tries to lower their carbon emissions and has problem doing it. Google University will be a green university (Low emissions, recyclable sheets, buildings compatible with the nature). While making our nature happy, students are also will be about fresh air and peaceful environment. Especially in India, it’ll be really important to do so. Live feedbacks. Yes. Students will be able to comment or ask about anything without feeling any hard feelings or awe. Students will be able to reach our University via Twitter, most importantly they’ll be able to contact their professors via Twitter as well making communication within University transparent as possible. Last but not least, the main reason why people will choose Google University will be about it’s business opportunities. Every single student will have opportunities to prove themselves within their time in university, which will be rewarded. Rewards can be job offers from “Google” itself or propositions to other international companies.

8. Payment arrangements Since late 1980’s India have been encouraging and assisting (aiding) foreign companies to do investments in their lands. They have aimed for being top #10 economy in the world and achieved it. Their secret was providing foreign companies with lands, cheap laborers and sometimes by not taking taxes. Nokia, Vodafone, Fiat, Ford Motors are only few of the multinational companies that invested in India 20 years ago. Google University, will take that as an advantage. On a side note, there are 106 private university in India. When it comes to pricing,

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Google University has to balance its tuition between those universities, however it has to be as low as possible, by no means to do any profit. “Google University” will have different payment methods to help Indian families and foreign people. For those with unbalanced incomes, there will be open-account payments. There will be installments to supported credit cards. There will be discounts to up to 10% prepayments and payments will be done before terms. There will be many scholarship programs aiming students to improve themselves and save their money. A student can get scholarship after applying to school by being successful in high school or being successful while studying in university. Since Google University is not a profit-making university, scholarship committee will be really active in university, taking wishes in to consideration. If a student’s family has a problem with payment, university will talk to family face-toface considering the importance of their situation. Some bad cases might be: 

Losing their job

Death of a close family member

Having legal problems, etc In those cases, if school committee understands and agrees on student’s situation, s/he

will be transferred to full scholarship program till his/her family can pay the tuitions again. If it is impossible for family to pay rest of the tuitions, student will be hosted in hostel’s for free. Till student graduates and finds a job, Google University will satisfy all his/her needs. When he graduates and find a job, student will re-pay his accumulated debts slowly, within couple years.

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Tuition will be changed every year depending on inflation in India.

9. Capital

The invested amount should be 3 million dollars in order to implement basic investment for ensuring the operational functionalities of the university (buildings, equipment, services, etc.). This amount should cover the annual fees of the personal for the first year. For the next years Google should provide approximately of one million dollars per year (corrected with effects

of

inflation)

to

cover

up

the

operational

expenditures

and

amortization.

The company should use its own cash to finance investment taking account that its profit in the last year was 9.737 billion dollars and its cash was 14.56 billion. This means that establishing a university in India does not influence the profitability and further investment potential of the company. Taking in account that the threats of external founding are the next: 1.

The Co- investors should access the know-how of Google and use it for their own interests.

2.

They could hire the highly qualified graduates

3.

If the Co-investors step back suddenly that would create an uncomfortable financial

situation for the company.

Considering these reasons and the fact that Google has sufficient resources to support the investment in our opinion the best choice is usage of its own capital. Future expansion: if the investment proves to be profitable in 5 years Google should establish more institutions of the kind also in India and in Eastern Europe. The second one is also a popular and rich source of relatively cheap human potential.

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10.

The

company

1.

is

Likely challenges:

likely

to

encounter

the

next

difficulties:

Google university should gain the trust of potential students so there will be need at the

beginning to recruit applicants from the best high schools. Later if the investment shows to be profitable and the university gains popularity Google should pay more attention to select the best candidates 2.

The company should pay a huge attention on of keeping the highly qualified graduates

inside the company offering a friendly and dynamic environment and competitive salaries in comparison 3.

with

multinational

competitors.

Another challenge is to hire recognized and highly trained teachers to ensure the best

education

for

Solutions 1.

other

the for

accepted facing

students the

in

range. challenges:

Google should find the best high schools from the region and keep presentations and

provide information regarding the benefits of being a Google university student and later a Google 2.

employee.

To keep the highly qualified personal on the long term the company should create a

familiar environment according also relatively high salaries and secure work place 3.

Google should provide the access to the latest technologies for its employees in order to

ensure competitiveness.

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Reference : 4 International Colleges and Universities . (2012, April 12). List of Indian Universities & Colleges by name. Retrieved from 4 International Colleges and Universities : http://www.4icu.org/in/indian-universities.htm BBC News. (2010, March 15). Indian bill to allow foreign universities to operate . Retrieved from BBC News: http://news.bbc.co.uk/2/hi/south_asia/8567737.stm CIA. (2012, April 12). The World Factbook. Retrieved from CIA: https://www.cia.gov/library/publications/the-world-factbook/geos/in.html Corruption Perceptions Index. (2011, April 12). Corruption Perceptions Index 2011. Retrieved from Corruption Perceptions Index: http://cpi.transparency.org/cpi2011/results/ Farrell, M. (2008, September 12). Universities That Turn Research Into Revenue. Forbes. Government of India. (2009). FDI Statistics, Ministry of Commerce & Industry, Department of. Goverment of India. Graduate School of Education. (2001). Higher Education Finance and Cost-Sharing in India. New York: GSE.

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Human Resources Journal. (2011). Recruiting Costs for New Employees. Human Resources, 1. Leblanc, D. (2001, July 31). Universities' revenue up $2-billion. The Globe and Mail, p. 4. Raychaudhuri, A., & De, P. (2007, December ). Barriers to Trade in Higher Education. AsiaPacific Trade and Investment Review, pp. 67-88. Sullivan, J. (2005). A Case Study of Google Recruiting, Part 2. http://www.thestudentroom.co.uk/showthread.php?t=719221 http://colleges.usnews.rankingsandreviews.com/best-colleges/harvard-university-2155 http://www.businessweek.com/bschools/content/sep2007/bs20070914_210103.htm http://www.podiatrytoday.com/article/5661 http://dare.co.in/opportunities/education/before-you-set-up-a-school.htm http://ccsindia.org/ccsindia/policy/ed/studies/wp0001.pdf http://ycharts.com/financials/GOOG/cash_flow_statement/annual http://finance.yahoo.com/q/cf?s=GOOG+Cash+Flow&annual http://jobsearchtech.about.com/od/companyprofiles/a/google_2.htm http://prayatna.typepad.com/education/school_fees/ www.du.ac.in/ http://www.indiauniversity.me/ http://www.4icu.org/in/ IYC Collaboration Project–Google University

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LIDL in China X-CULTURE

Team #87:

Esmeralda Arriaga Ayfer S. Edgaras Binkys Kania Novita Wulandari Zainab Bandookwala

April 26, 2012

1


Table of Contents Introduction………………………………………………………………………...3 Products and Services……………………………………………………………3 Target Market……………………………………………………………………...4 Consumer Segment………………………………………………………………5 Location……………………………………………………………………………8 Entry Mode………………………………………………………………………..9 Staffing and Control………………………………………………………..........10 Marketing…………………………………………………………………………12 Likely Challenges………………………………………………………………..14 Secondary Sources………………………………………………………………15 Conclusion………………………………………………………………………...16

2


Introduction We propose that Aldi enters China to create a low-cost, convenient means of grocery for the low-income to middle class society. We believe that be entering this new market at this time will be highly profitable due to the growing population and the economy. With the affordable prices that is offered by Aldi, our target market will be satisfied of the quantity and quality they are able to bring home. Products and Services Product/Service differentiation may be offering greater performance benefits or better aesthetics than your competition. You can position your product/service as a low, medium or high-featured product/service that satisfies the needs or wants of a particular market segment. When competing with other similarly featured products, than it is better to make improvements/differences (i.e., product size, performance, delivery) in your offering.

Lidl Group is one of the largest retailers all over the world. Its operations include all services usual for a retail business from goods transportation, communication with suppliers to selling products for a final consumer. Our team decided that Lidl goes with its traditional product and services to China. All Lidl products undergo stringent quality control checks from the point of production up to the point of sale. Freshness and quality of the products are guaranteed at all times. The high quality of the products is confirmed from independent bodies such as 'Stiftung Warentest' and 'Oekotest'. Most of the products were selling directly from boxes or form pallets. Moreover, the ingredients list for the Lidl owns brand products are available on the package and on the website. Unlike more supermarkets, Lidl’s range of products and prices is the same from store to store. They keep everything simple and maintaining low prices. Furthermore, the quality to price ratio is very high. Lidl has a basic and large assortment and relies more on brand products. By using a basic assortment composed of high quality and very low prices and by purchasing large quantities of the same item across countries Lid achieve extracted greater pricing flexibility

3


In case of shopping problems the store manager is available to help. Lid also accepts cash, debit cards and credit cards at some stores. Moreover, Lidl helps the environment in case of the charge for carrier bags encourage shoppers to reuse. Recently, it also has started selling Fair-trade and organic products. In the future an online shop will be considered. Free car parks are one of the important services. Last but not least, Lidl is known for squeezing suppliers and reacting faster to new consumer demands. Target Market Establishing a new branch of our business in China would be the most suitable market entry strategy. Choosing target markets Lidl followed the usual way: First they entered markets with less distance and cultural differences and then they continued the expansion with more “risky” markets. Entering Lidl in China will be a good strategy for company’s expansion as target markets, although it will take much more effort to control such big markets. Furthermore, it would be a tough challenge for suppliers, who would have to reach agreements with Lidl on its reduced price policy and also abide by the chain’s strict trade principles in China.

China is one of the big emerging markets and increases rapidly in consumer spending. This attracted many multinational corporations. Researchers CACI have pinpointed 1,000 areas in China where the discount retailers could continue to expand. The company said that these areas would be suitable for cut-price grocery chains, while the discounters should see success because customers come from all backgrounds and are not all on low incomes.

Lidl still opens grocery discount stores which mean selling products at the lowest price possible reducing its costs on company’s promotion, rental fees or purchasing prices of properties as well as having a basic outlet format stores.

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Lidl decided to invest abroad to expand their business and some of the benefits of doing so are: cheaper labor costs, infrastructure quality, economic growth or market size of the host country.

By using the marketing mix components and breaking down into its four elements product, price, promotion and place the new Lidl grocery in China will has the ability to reach multiple consumers within the target market: 

Product

Lidl main business is grocery and consumer products which are needed every day as basic needs in the lowest possible prices. The products in the stores are much cheaper than other supermarkets. Most of the products are German made with 95% own brand product. 

Price

Lidl offers customers everyday top quality products at the lowest possible prices and keeps things as simple as possible. 

Place

The Place area is concerned with decisions involving getting the "right" product to the target customers and making it available when and where it is needed. Therefore, Lidl will place in the bigger cities of China where our target customers can be achieved and where we can avoid traffic problems. 

Promotion

Our customers can sign up for an email newsletter to get the latest offers. The newsletter can also be finding in our Lidl store. Furthermore, we are representing on Facebook, where you can follow the latest news.

Consumer Segment China is the world’s most populous country in the world with more than 1.3 billion people. In business this amount can be interpreted as a number of possible clients and

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consumers.

The picture above shows the actual population distribution of China according to gender and age group. About 21% of the population are 14 years old or younger, 71% are between 15 and 64 years old, and 8% are over 65 years old. Males account for 51.27% of the total population, while females make up 48.73%.

We advise to concentrate on the middle age group. This group is made of younger and more active members of society that have the largest amount of disposable income. Usually people in this age group spend money not only to suffice their own basic needs of food, drinks and other goods, but also they have to take care of their children and in some cases they also have to take care of their parents and other elderly people.

The graph on the left shows the distribution of social classes in China. Social Class data refer to the number of individuals whose incomes fall within a specified range of the average gross income of all individuals aged

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15+. Two bottom social classes comprise a total of 64% of China’s population. Their income ranges from bellow 50% to 100% of the average income.

We recommend concentrating on this consumer segment as it makes up the majority of China’s vast population, which spends most of its income on food, drinks and other necessary goods.

In order to succeed Lidl has to apply the same model it was using in Europe – keeping everything simple and maintaining low prices. Lidl stores should have a no-frills approach of keeping its products in the original delivery cartons, allowing the customers to take the product directly from the carton. When the carton is empty, it is simply replaced with a full one. Decorations are minimal or non-existent, the cartons are on pallets, and staffing is minimal, so that a profit can be made even though the prices are low.

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Location

China has the biggest amount of cities with a population of at least more than 1 million. Statistics show that China will undergo a substantial growth in urbanization in the foreseeable future. Since 2000, China's cities have expanded at an average rate of 10% annually. It is estimated that China will add 400 million people to its urban population, accounting for 64% of the total population, by 2025. The country's urbanization rate increased from 17.4% to 46.8% between 1978 and 2009, a scale unprecedented in human history. Between 150 and 200 million migrant workers work part-time in the major cities, returning home to the countryside periodically with their earnings. The main reason for it is that living conditions are far better in the city than in the country. It is easier to find a job with better pay. The figures in the table below are from the 2008 census, and are only estimates of the urban populations within administrative city limits; a different ranking exists when considering the total municipal populations (which includes suburban and rural populations). The large "floating populations" of migrant workers make conducting censuses in urban areas difficult; the figures below do not include the floating population, only long-term residents.

We suggest locating LIDL retail stores in the bigger cities of China where the number of possible customers is allot bigger. Center districts are more attractive as it has a larger

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movement of people. But we should also take into account the possibility of experiencing traffic problems because central parts of cities do have heavier traffic. Thus an optimal route between shops and logistics centers must be found.

Logistics centers, on the other hand, should be built or rented outside the city and probably not far from an international sea port. Keeping transportation costs as minimal as possible is a key factor at maintaining low prices of retail products.

Competitors are also important when choosing a location for retail stores. Placing your shops too close to a competitor might cause harsh rivalry which could result in a price war. Undercutting prices will reduce your possible profits. In the end either one of you moves out or both stay and continue on competing, reducing prices and losing money.

In conclusion, a few things should be thought through when choosing a location: 1) Population of the city 2) Traffic 3) City planning 4) Logistics centers 5) Competitors Entry Mode Market entry strategies depend on the market environment and the positioning and product portfolio of existing competitors. We would like to reduce price when penetrating the market in China since there are many existing competitors who offer products at a low price. By introducing our products at a low price as our introduction, a latecomer can attract new customers who would not have otherwise visited or purchased our products at the store. Our prices and reputation of quality can induce our competitors’ customer to

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switch. This can be accomplished by building our stores at high-traffic, convenient locations. We also have to adapt and change our food products according to the likes and taste to the Chinese. As mentioned previously, we would need to improve our products by adapting to the tastes of the Chinese and offer best quality at a low price. We would also like to target new geographic markets once we have penetrated our metropolitan areas of China. We would like to expand our stores and products nearer rural areas to hope to gain the potential success we are seeking in the metropolitan areas. We need to be completely aware of our competitors because many industries and companies are setting their sites on China because of its dynamic growth over the years and its expected economic growth in the upcoming years. Channels of distribution are an important factor to consider as well. China is a large country and it can economically hurt us if we do not penetrate strongly from the beginning.

In addition on our entry mode strategy, it is crucial to determine the timing of the introduction of any new product. Staffing and Control Implementation is the key for the success of LIDL in China. It is vital that LIDL hires innovative, intelligent management staff and store employees that will provide outstanding customer service and positively represent our company. Taking the step of going global to China will be a new challenge that we are able to handle with the right management team. Our top management members from corporate will be overseeing the activity of the stores and warehouses in China meanwhile training prospective managers for subdivisions in corporate in the country and store employees to provide exemplary service and understand store policies and regulations. Our global executive staff will consist of:

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Chief Executive Officer

Chief Financial Officer

President of Distribution

Human Resources

President of Global Operations

Chief Technology Officer

Regional Manager

Market Research Specialist

Marketing Strategy Manager

Creative Director of Marketing

Technical Support Analyst

Sales Associates

Store Managers

Each staff member has a key responsibility to oversee their area of management and communicate with other departments. All have certain tasks of contribution to our action plan in China. Our action plan consists of three phases. Phase 1 (entry level): Implement market development strategy of introducing LIDL in China Phase 2 (extended services): Penetrate the market by reduced cost products to consumers Phase 3 (regional provider): Continue to penetrate the market and assign the task to our marketing researchers to provide feedback of our consumers of satisfaction and dissatisfaction, expand regional services, and customization.

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Marketing In marketing LIDL to the Chinese there will be a few problems. Personal relationships are of utmost importance to the Chinese people. These relationships often go hand in hand with consumer loyalty. With consumer loyalty so high, it is always hard to institute new brands into the market, especially at a level as personal as groceries. Another issue is the Chinese preference towards localization. Although they welcome foreign companies, there seems to understandably be a preference towards locally cultivated products that are more akin to their customs and their tastes. The final large problem is that although the Chinese do tend to buy things that cost less than their alternative, their Confucian society also prides social status, which they are willing to pay for. Because of this, Chinese consumers might not be so inclined to shop at LIDL because the perceived notion that they are too poor to afford to shop at the other grocery stores would reflect very poorly on their social status.

To counter the problem of the personal relationship we must make sure that our brand is perceived as welcoming and inviting. We could also make use of Chinese proverbs and adages such as “Be not afraid of growing slowly, be only afraid of standing still” and “A diamond with a flaw is worth more than a pebble without imperfections”. In time our brand will develop this personal relationship with the consumer, but until then we have to overcome all of our marketing obstacles to develop and cultivate the relationship.

The problem with the preference towards localization is an easier one to overcome. We will prominently display local products in our advertising. Putting this focus on products that the Chinese consumer is comfortable with will reassure them that their customs and tastes are being taken into account at LIDL. We must also make sure that local customs and language are taken into account with our designs. To do this we should hire a local

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advertising agency and do market testing purely to double check that we aren't offending anyone or sending the wrong message.

The third problem will require some creativity to overcome. My idea on how to overcome the social status problem is to emphasize how smart consumers are for buying cheaper products at LIDL. This will give our consumers a certain pride in their decisions to use LIDL for their grocery needs because they are saving money shopping there than if they were shopping with the competitors. Hopefully this could shift how the Chinese consumer views LIDL from that of the “cheap” to that of the “intelligent”, and our consumers will take pride in knowing that they are intelligent shoppers. Potentially this thought could become a topic of conversation among consumers, leading to an increase in personal relationships and consumer loyalty with LIDL.

The two main intermediaries in which we should focus our advertising on are television and internet. We should primarily use television, since that is where most advertising in the world and in China is seen. The utilization of internet advertising for LIDL allows for us to do some creative things in advertising and to reach a different consumer base. This advertising to the younger crowd of internet consumers would hopefully help LIDL to create personal relationships, brand recognition, and potentially loyalty early on in the life of a consumer.

We believe that by utilizing these strategies we can overcome the obstacles of marketing in China. These strategies, if properly utilized, could lead to a very successful venture into a new and profitable market for LIDL.

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The Likely Challenges 1. Language China is one of the biggest country and the fastest growing country in the world. China also has one of the largest populations in the entire world. The populations in China are divided by many ethnicity and cultures. Language comes in many diversity also. Mandarin is the most spoken language in China, and is considered common language among the citizen of China. The first challenge comes in adapting the language into day-to-day operations of LIDL. Notes, labels, products, even permission, consumer interaction, and adapting into government regulations and law is a necessary thing to do in order to survive. So in order to survive, mastery of Chinese language is a necessary. Of course, the use of translator and local workers are viable options. 2.

Culture Culture is a vital factor to be considered as one of the major challenges. LIDL is a company that mostly operates in Europe, so marketing, operation, and production process is adjusted into the standards of the European people. Now China, is a very different country compared to Europe. Culture is one of the biggest noticeable difference. Working cultures, consumers behavior, consumer preferences, even products are vastly different. One thing that is needed to be considered is also the nature of the LIDL itself. LIDL is a slightly different supermarket than any other supermarket. LIDL has a minimalist approach. Minimum numbers of employee, minimum décor, and so on. The ‘no-frills’ approach that the LIDL have is a very different than any other supermarket. Preemptive research towards the consumer behavior in China, perhaps is a necessity after all. Due to its effect on marketing our business, it is important for us to consider culture as one the likely challanges that might be happened whenver we want to expand the business in China.

3.

Politics Political condition of a country is one of the important factors that needed to be considered when we want to invest into a certain particular country. We cant put it aside from our business plan and just ran away with the business proposal. Recent political scandal in China has pushed the country into a mess. Still, that doesn’t mean, we shouldn’t invest at all. A careful observation is necessary. Political turmoil is normal problem in every country, The change from chaos to order is almost organic, meaning that the change into betterment had to happen sometimes soon. Again, careful observation is a must. China is a sensitive country, many stakeholders and political interest are placed upon the country. What we want, is to operate in a normal condition. What we don’t want is to be caught on the crossfire. That was on how we try to figure out, on how politic affecting the business plan.

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Conclusion We feel the with China’s economic growth and largest growing population LIDL/ALDI has potential to excel as a global company in this new market and industry. High potential of profit is visible with strong entry and implementing adaptation and differentiation of our products and services to the market at a reduced cost. We hope that the Chinese view our products and service both of great quality and value and hope to gain loyal customers and a respected reputation as a global brand. With a successful entry and implementation of the store launches in the metropolitan areas such as Hong-Kong and Shanghai, we hope to expand our locations in other areas. Financially, we hope to gain a 10% profit to the company and continue our success.

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Secondary Sources Web. Apr. 2012.<http://www.talkingretail.com/news/industry-news/aldi-and-lidl-to-targetricher-areas>

Web. Apr. 2012.<http://www.foodnavigator.com/Financial-Industry/Lidl-expansiontargets-CEE-region>

Web. Apr. 2012. <http://books.google.at/books?id=o4CY2OMFfygC&pg=PA17&dq=target+market+of+lidl &hl=de&sa=X&ei=dDCUT6T3LpSP4gTEzsasassadas3QDw&ved=0CD4Q6AEwAQ#v=onepage&q=target%20market%20of%20lid l&f=false> <http://www.lidl.co.uk/cps/rde/xchg/SID-406404C5-42EF64B4/lidl_uk/hs.xsl/6107.htm> Market Entry Strategies: Pioneers Versus Late Arrivals. Kalyanaram and Gurumurthy.

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Team Business Proposal Title Page Team # 90 Client: Walt Disney Corporation Product and Service: We would like to propose a Day care on site at every Walt Disney Corporation building for the employees they have there. While after a few months they will be able to expand into a full service Child Care facility that could be utilized by any and all. Number of Pages: 21 Team Members: Did Not Participate (Please make a note if this NAME

COUNTRY teammate did not contribute during the project)

Kerri Whatley

USA

Jasmine Vukosavljevic

USA

Muhammad Nicky Has

Indonesia

BUrak Kavas

Turkey

Egle Lelyte

Lithuania

Dwupanca Adi Nugraha

Indonesia

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Table of Contents Title Page.............………………………………………………………………………1 Table of Contents.............................................................................................................2 Project Summary...............................................................................................................3 Product and Service…………………………………………………………………………………..4-5 Target Market…………………………………………………………………………...5-6 Current Segmentation…………………….……………………………………………...6-7 Production Site………………………….……………………………………………….7-8 Entry Mode…………………………...………………………………………………….8 Market Strategy………………………………………………………………………….9-16 Payment Arrangement…………….…………………………………………………….16-18 Capital………………………………………………………………………………….18-21 Industry Attractiveness……………….………………………………………………..21-23

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Project Summary

As a group we decided to add a Child Care program to every Walt Disney Corporation building to help parents of the company. With adding this program employees will be able to work more diligently at work while knowing their children are within the building if anything happens. It will also make their work days less hectic as in they will only have to make one stop in the morning. The Child Care will be open however long the office will be open. We feel that this is what Walt Disney has been missing. Their name spans across many different avenues in the business world such as theme parks, radio, Television, movie, and internet industries. We feel that adding the Child care program will push Disney to an even more untouchable brand name.

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Product/Service: Describe the specific product or service that your Client should invest in and provide an economic justification for your idea. Walt Disney Company, being the worldâ&#x20AC;&#x2122;s largest media conglomerate and Entertainment Company, is truly any child and parents favorite company. Ranging from computer games, television studios, theme parks, and everyoneâ&#x20AC;&#x2122;s favorite classic characters, there is really nothing not to love about this incredibly magical company. From a young age, the Walt Disney Company has had the ability to capture your mind and expose it to a whole world of indescribable imagination. This is maintained as you age, and even at an adult age, those characters you once loved, are still enjoyable to watch and even pass down to the next generation.

Although the Walt Disney Company is immensely diverse, we believe there is an innovative way for them to expand. Walt Disney should invest in the day care industry as well as the selling and making of chocolate in all of their theme parks and offices of their large corporation.

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As we all know Disney is a trusted company, it is also a looked at as a genuine corporation that is encouraging the minds of tomorrows future. Seeing how Walt Disney as a whole has extremely high ethics and standards for all their employees and since the public is already so trusting towards Walt Disney, a Day Care company would most definitely succeed.

The day care industry has proved to be one of the few recession-resilient industries and maintains positive revenue gains each year. Although the recession and slow recovery period have not been promising for most industries, the revenue has maintained a positive value. While unemployment rose and disposable income is dropping, day care still remains to be an important expenditure for families.

While there are two main types of child care, being center-based care and family child care, center-based care, which is held in a facility instead of a home, is the best choice for Walt Disney Company. Realizing that the unavailability of child care to parents is a barrier, Walt Disney should make sure that pricing is affordable.

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Helping children grow, learn and gain new skills is exceptionally rewarding and to an extent, Walt Disney has already done this for children. It is also known that child care that is trust worthy and reliable is hard to find, especially for children under the age of five.

Walt Disney should invest in the child care industry by providing facilities across the country. This service could be available exclusively for Disney employees or to the entire public. If Disney provides child care, they will prove that molding and enabling young minds to accomplish great things is what they do best.

2Target Market:

We provide services just for children and babies.So our target market is for children.Our products are toys ,chocolate,clothes and DVDs. In addition we provide services to funfair and Waltdisney Channel. Our location for funfair isnâ&#x20AC;&#x2122;t specific.The most important point for location is transportation.If transportation is convenient,more children can come to funfair easily.

We should establish Waltdisney store to sell our products.Location of Waltdisney stores are important to sell more product.We should establish these stores near the parks ,kindergarten and elemantary schools.Our products can be visible easily from the children in this way.So we can sell more products.Advertisement is most important point to sell more products. 6


First of all we should establish funfair,then we should establish Waltdisney Channel.Because help by funfair and Waltdisney Channel we can make advertisement for Waltdisney stores and we can introduce our products easily.

We should be offered globally to be a big Company.If our Company could be big,we could sell our products all the world.

Location is important to produce. We should produce our products except for Chocolate in China .Because we can produce cheaper in China.

We should buy chocolate from territorial chocolate companies.It could be cheaper.

ď&#x201A;ˇ

3. Current Segmentation

Walt Disney Segmentation based on age 7% 26% 18%

0 - 6 years 7 - 17 years 18 - 24 years 25 - 45 years

14%

> 45 years 35%

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As we can see from the chart above, we can rank the segmented customer of Walt Disney is mostly from 7 – 17 years old, then from 0 – 6 years, after that 25 – 45 years, and then 18 – 24 years, and least is from >45 years old. From this percentage we can put our focus on the customer from 0 – 6 years because the customer of Walt Disney is mostly came from this range of age. Based on this consideration our group decided to make a daycare feature that allow the parent that have a child that is under 7 years old to be able to left their child to the new Walt Disney Daycare so that their children will be take care and the parent can continue their busy activity. There are so many other daycare service provider that are already exists for now. What makes the Walt Disney is different from the other daycare facilities is the experience that the children will get during their daycare that brings the experience of Disneyland into the life of the daycare activities. As the bonus, there will be a free Walt Disney chocolate for the children in the daycare facilities. It is also a way to promote the new Walt Disney Chocolate that we also suggested. By doing this Daycare project, our group can assure that Walt Disney can grasps the entire customer in the targeted segment even better and also by making a new Walt Disney chocolate the Walt Disney can improve its dedication for the society in creating a good product quality and excellent service in entertaining and keeping the customer.

4. Production site or service personnel location

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Our programs would be apply in every branches of Disney and It would be stand in the middle of the park area because we believe that it will effective and fast when customer to find our place while touring the park. Our operational time same as with the operational time of

Disney park because we believe that even only one park operate in that time, it still has high quantity of visitors which means that there is possibility people need for our service als

5. We believe that since Walt Disney Corporation is already so large and spans over many industries that the Day Care could basically sell itself. We would like to suggest placing a day care in every television and movie studio so that parents who work there will be able to save time and money by simply bringing their children to work with them and just taking them into a different room. Parents will also be able to have lunch with their children and check in on them through out the day. We feel that these qualities will make the Day Care very marketable. We also would like to suggest that if you have a memeber of the family that doesnt work in the building they will be able to apply to have their children placed there also. Once this segment of the company takes off and establishes it self we see them needing to expand. Once they need to expand they will be able to buy buildings and set up more Day Cares in the larger cities around

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the World and begin giving amazing care to children throught out the world. To market this service we suggest that they start about 6 months in advance planning out whose children will be there from each building. Closer to one to two years before start telling and advertising through out the companies buildings and their employees websites so that employees can start making arangements for their children to come to their day care instead of the companies competetors. We suggest that the companyâ&#x20AC;&#x2122;s employees be charged around half price for the first month and then 75% the rest of the years. We feel this way it will be a huge profit for the company as well as Walt Disney employees.

7. Marketing Strategy 1. Mission. Providing a place with educative and fun for toddlers.

2. Marketing Objectives Increasing visitors by eliminated the difficulties of family to carry babies on vocation.

3. Target Markets The target market is toddlers, from the analysis of the market segment of Disney, we found that Disney comprises 4 types of customers, they are;

Disney segments Male 10 Female


Our program to target toddler because from our analysis that around 40% of the total visitors of Disney land is Family and we believe that there is possibility that a half from the 40% is a family brings toddlers in addition also that Disney target market is to covering toddlers to young adults. By this project we would like to provide a distinctive place for toddlers with educative and fun.

4. Positioning Disney as one of the favorite Park and resort for kids but during few years of development, it has been increased that it is not only visiting by kids but also it has cover from toddlers to young adult. It has become a fun place for young adults and it has been became a destination for family vacation. Regarding as the family destination our positioning is providing distinctive place for toddler with educative and fun place. Sometimes parents worry about their. Is there any place for toddler to play and is it suitable with the condition, when visiting how about the

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weather and temperature of the park is it hot, crowded, and cold that those are not good for the toddler or parents want to have private time without interference from their child. By this project we want to solve and eliminate those worries of parents. It enables family or parents to stay and play with their toddlers or they can commend their toddler so that the family do not need to worry or anxious in enjoying the park.

-

The differences to Baby Care Center As we know that Disney has place for baby too called Baby Care Center, a place for baby when they need a break and place for equipment of baby. So what is the difference then? The difference is focusing to give a special place for toddlers that they can play and stay without parentâ&#x20AC;&#x2122;s attendance and in the other side it gives private time for parents for enjoying the park.

5. Strategies Our strategy to deliver the service to the customer comprises of three ways they are; 1. Advertisement Introducing the new services we would use ads, advertisement board as the indirect media to the customer and the second is mouth to mouth strategy. In venue we would like to dominant use mouth to mouth advertising where we directly introduce and educate customer about our new services.

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2. Educative and Fun of services In this strategy we would like to give best service but it based on the educative and fun to the service. The services will be based and equal on the age and capability of the brain for instance how to read, spell, reading, recognize object and its color. It will train the cognitive, psychomotor and affective.

3. Free Chocolate. This strategy as the first impression to attract toddler to stay and enjoying the services.

6. Marketing Mix 1. Product Our product is providing a place for parents bring toddler that they could stay to play with or commend their toddler. By the services parents can enjoy the park without worrying for their toddler and they can have private time to enjoy. It is not only good for the parents but also it brings good to the toddlers because our concept of service is to train the cognitive, affective and psychomotor of the brain of toddler.

2. Price The services will be included on the fees of the ticket.

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3. Promotion The promotion will be by brochure and ads on television but in the venue, we will dominantly use mouth to mouth promotion which it effects more in the emotional side.

4. Place Our place will stand on the middle of the park because we believe that it will effective and fast when customer to find our place while touring the park. Our operational time same as with the operational time of Disney park

7. Market Research As businesses expand further and further in international markets, the role of timely and accurate marketing research to guide decision-making becomes increasingly critical. It has across outside of the country and facing new challenges of behavior, communication, cultures and language. Disney as the Multinational Company has to face those challenges, considering Disney has 6 branches in the world, they are; 1. California Disney Land, West Coast of United States 2. Florida Disney Land, Southeastern United States 3. Paris Disney Land, France 14


4. Hong Kong Disney Land, China 5. Shanghai Disney, China 6. Tokyo Disney, Japan

Our strategy in facing international marketing, our strategy would be different for each country because we realize that every country has differences with others country. Our marketing analysis would be focus on the differences on cultures, behavior and religion.

1. Paris Disney Land, France

Considering the previous mistake of management Disney in Paris that assume the holiday time in Paris is same with holiday in America, we would like to eliminate that by following vocation schedule of France people and also we would like give involve to Characters cartoon in Paris for instances A Monster In Paris, Ronald the Barbarian, Zarafa and etc. this strategy will give an impression to easy accept the Disney services easily.

2. Tokyo Disney Land, Japan

Playing in the market of Japan, firstly we would like to adapt more from the etymology and characters cartoon of Japan such as Naruto, Dragon Ball, etc. We realize

15


that It is a good strategy to entertain child with new concept of entertainment but of course we combine with educational culture about Japan.

The second Language is one of the important things to consider, regarding the culture in Japan is still strong.

3. California Disney Land and Florida Disney Land Considering the Disney is come from the continent of these state, there will be no significant change or strategy to introduce our services. We would only try to dig more how is the local people care their toddler and what do they need to. Race is also would consider more on this area regarding there are few ethnic and race.

4. Hong Kong Disney Land and Shanghai Disney Land Our strategy in these state is concerning to the culture because of the culture in here as strong as in Japan. Religion would like concern also here, In fact in China has 7 religions which the dominant is Buddha, and after that Catholic, Protestant and after that Islam which generally those are concern for politeness and wisdom of each other and forbid for content of pornography ads. One the mistake of Disney ads is like below.

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8Payment Arrangement:

We need machines ,toys and large land for established funfair.

We should take a bank loan for toys and large land.

We should take machines with leasing..If we take maschines with leasing,we have to pay salary and we can take maschines end of the contract with low price. So productivity and profitability would increase and we can use capital for other requirement easily.We should create Waltdisney Card.

People can take advantage of benefit and make payment with Waltdisney card.People can online shopping too with this card.

People have to pay to enter the funfair :

With Waltdisney cart

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Without Waltdisney Cart


Daily

49.90 USD

59.90 USD

Quarterly

149.90 USD

169.90 USD

Yearly

249.90 USD

279.90 USD

We should establish Waltdisney stores and Waltdisney Channel with Money from funfair.

We can pay to leasing salary with this Money too.

We have to open current account to make payment to retailer and distributor.We can pursue all payment easily with current account.We should make a payment our worker with weekly checks.We can keep the payments under control in this method.

We should to franchising for Waltdisney stores.All franchise should be minimum twenty years.We wonâ&#x20AC;&#x2122;t take Money for installation and naming rights.

For the first year : We'll take ten percent of the monthly profit.

For the second year: We'll take fifteen percent of the monthly profit.

For the other years : We'll take twenty percent of the monthly profit.

9. Capital

18


Walt Disney has sade: „A man should never neglect his family for business. So we decedet, that we will offer one product and one service. Ouer idea in that ouer Client shold invest is day care centre and chocolate. The Company The Walt Disney in 2005 announced officially opened in Hong Kong is one of their theme park “Dinseyland”. China for Walt Disney - an important market where they will be able to expand their operations. Both Walt Disney and the Chinese government to make this project a lot of hope. And these hope was sucses, because even in worldwide crise, Walt Disney’s income was great.

Year

Net income mln. Dolar.

2002

1236

2003

1267

2004

2345

2005

3374

2006

2533

2007

4687

2008

4427

2009

3609

2010

4313

2011

5258

19


Tables data is from http://corporate.disney.go.com/investors/quarterly_earnings.html

We also know, that the company's primary financial goals are to maximize earnings and cash flow, and to allocate capital toward growth initiatives that will drive long-term shareholder value. Therefore invest company a real big part of earned income.

Year

Investment mln. Dolar

2002

1086

2003

1049

2004

1427

2005

1823

2006

1299

2007

1566

2008

1578

2009

1753

2010

2110

20


2011

3559

Tables data is from http://corporate.disney.go.com/investors/quarterly_earnings.html

So we can see, what part net incomes invest the company Walt Disney in last ten years.

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Investment mln. Dolar

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

Net income mln. Dolar.

As we see all of these years Walt Disney has invest a big part net incomes. From almost ~ 50% to ~ 30%. So we think, that these company should invest in chocolate and day care centre using its own cash. The company shouldnâ&#x20AC;&#x2122;t invest using seek extremal funding (e.g., bank loans, equity, venture capital, etc.).

21


We will developing our product and service in three ways:

1. We give exsample of the chocolate. So people could taste it and decide or they would like one more time taste it. If our sales of this chocolate will rise up in three months, this will mean that our product is successful and our capita is also rising up. 2. We will offer two weeks of day care free when you sign up. During this period child children make friends there, get used to the environment, to the empolyees. That meens, that children will go into this day care centre. 3. Each children, who go to this day care centre will get one our chocolate per week few months. After this month children will want this chocolate further and he will ask his mother or father to buy it for him.

Model by Porter To Determine Industry Attractiveness

Current

Future Highly Unattractiv e

Rivalry among competitor

Mildly Unattracti ve

Mildly Attractive Neutral

C

Number of Quality Large

3

3

balance competitor

Small F

22


C Product features

Commodity 2

1

Specialty F C

Large Capacity increase

2

Small

1 increment

F

increment

C Diversity of competitor

High

2

1

Low F HIGH

Overall

From the table above, we can summarize that the new Walt Disney daycare have a high barriers of entry. This is caused by the daycare product is one of the Walt Disneyâ&#x20AC;&#x2122;s product that is differed from its previous product which is focus on the entertainment area, but in this case, Walt Disney want to introduce the new product which is a daycare product which is a little bit different. It is also require a relatively high capital to establish. Beside, the well-experienced employee is needed so that this new Walt Disney product will also have a good quality of product and service just like what Walt Disney offers for years

23


International Project Team # 91

Disney Bringing Disney cinemas around the world that feature 3-D animated films with accompanying mascots to a place near you

# Of pages: Team: Kevin Arroyo Kar Keong Low Ferdi Indra Kurniawan Ernesta Gromykaite Can Kamerli Parviz Samiev Judyta Burzynska

NC, USA Malaysia Indonesia Lithuania Turkey Indonesia IL, USA


Table Of Contents

Executive Summary ................................................................................................................. 2 Product and Service ................................................................................................................. 3 Target Market ......................................................................................................................... 5 Consumer Segment ................................................................................................................. 6 Production Site ........................................................................................................................ 8 Entry Mode ............................................................................................................................. 9 Staffing .................................................................................................................................. 11 Marketing.............................................................................................................................. 13 Payment Arrangements ......................................................................................................... 15 Capital ................................................................................................................................... 17 Likely Challenges ................................................................................................................... 19 References............................................................................................................................. 20

1


Executive Summary This project required us, as an international team, to pick a company, which is known worldwide, and present them with a business proposal of their next big product or service. Our team decided to work with the Walt Disney Corporation. Our business proposal is for Disney to create multiple cinemas throughout the world that only features 3-D animated films with accompanying mascots at every feature film. Although they already have 3-D films, we thought that having only a Disney decorated cinema would appeal to families much more. We also wanted to bring this idea to lowdeveloping countries so that the children can get a taste of what it means to be part of the Disney family. This has never been done before and we think with the right advertising and hitting the right target market, this can be Disneyâ&#x20AC;&#x2122;s new development. In the following paragraphs, we will discuss how we think Disney should go about implementing our proposal from the service to be provided, target market, consumer segment, production site, entry mode, staffing, marketing, payment arrangements, capital to the likely challenges Disney will face.

2


Product and Service Disney was one of the most well known brands all over the world. Walt Disney Company, who owned this brand, is the worldâ&#x20AC;&#x2122;s largest media conglomerate and Entertainment Company. They bring a lot of entertainments to the children and also their parents, not only in their home country, but also to the whole world. Four major business segments of Walt Disney Company included studio entertainment, parks and resorts, media networks and also consumer product. People who live in any corner of this world know what Disney is. Disney had accompanied their life for years and continuing to provide them the entertainment. However, it is a good question to ask what made Disney so famous? What comes to your mind while you heard Disney? By asking the people around, we get this conclusion. People who visited to Disney Resort before, large proportion of them will give this answer: theme park. While for those who had never been travel to the resorts before, they answered: Mickey Mouse, the Disney Animation. This showed the success of Walt Disney Company to influence the life of us. As stated above, Disney was famous due to its theme park and animation. Moreover, Disney theme park is not available everywhere but currently only available in Florida, California, Tokyo, Paris and Hong Kong while Shang Hai Disney Resort is in the progress. Not every one of us has the chance to visit these countries just to enjoy the fun provided by Disney Theme Park. However, Disney Animation does a different! It is a lot easier for us to enjoy the entertainment provided compare to theme park. What Disney Animation needed is just to have a cinema, a place for animation to show out; it can be either large or small which have to determine under different conditions. It is not only much cheaper for Disney to reach its consumer, but it also cost less to consumer to enjoy the entertainment provided. 3


Disney Animation has high potential to be developed by Walt Disney Company. Disney can earn benefits while the film industry is booming in recent years. Consumers would rather go to cinema than watching TV, CD, and DVD and so on in home. They preferred to get a better environment and to enjoy the effect presented in cinema. Most importantly, consumers willing to pay for it to enjoy the service! Despite this, projecting the Disney Animation is not enough as this is too normal for Disney. Why say so? We can understand this while we look at the mission and vision statement of Walt Disney Company which is stated that â&#x20AC;&#x153;to be one of the worldâ&#x20AC;&#x2122;s leading producers and providers of entertainment and information.â&#x20AC;? Disney seeks to develop the most creative, innovative and profitable entertainment experiences and related products in the world. We suggested that Disney should emphasize on developing three-dimensional (3-D) films. We think Disney should invest in several cinemas around the world that feature 3-D films only as well as feature the mascots of the feature presentation so that kids can get a taste of what it means to be part of the Disney family.

4


Target Market Our target market, is the family with middle and upper middle income who living in any corner of this world. In other words, Disney Animation should offer globally, focusing on the consumers who have extra disposable income that allowed them to enjoy the film release by Walt Disney Studio. Along with Disney’s traditional business style, we focus to attract the customers’ base on family-oriented. Watching Disney movie is the best way to narrow the gap between parents and children, making the family harmony. With Disney Digital 3-D, it increases the willingness of consumers to pay for higher charges, to enjoy the movie release by Disney. Curiosity of humans makes them wanted to try out the so call ‘magical’ effect, under the support of special projection hardware or eyewear. The potential for 3-D film is worth enough for Disney to consider, as the trend showed that people who would like to watch 3-D movie is increasing day by day, especially the market in Southeast Asia.

5


Consumer Segment Consumers segment can be based on few bases. Firstly, they can be segment the market base on geographic. We targeted the places which are more advanced and developed such as U.S. and Europe countries and the places where the economy are growing up in a fast pace such as China and Southeast Asia countries. This may allowed Disney to charge a higher price, so that they could earn more margins thus improve the service or entertainment that provided. Services and infrastructure are very important in nowadays business especially in services sector. Disney 3-D involves not only projecting the movie, but also providing a comfortable theatre to consumers so they do really impressed and enjoy it. Secondly, Disney can segment the market according to the demographic. Basically, they should target those who had average English literacy and the range above middle income in most of the countries. This is because most of the Disney production was in English and people who watch Disney movie, normally understood English but maybe not too deep. However, operating a business in one country might be very different from another country. It is good to suggest that if Disney able to develop different type of language in the product, so it suit the different market. For example, Mandarin had a huge market. Population in China is very big and most of them understood mandarin even though some of them might not able to write it well. Also, mandarin is not only been used in China, people who live in the countries like Taiwan, Vietnam, Malaysia, Singapore, Indonesia, Hong Kong and so on might have certain ability to understand and write mandarin. More surprisingly, some of the people who live in western countries are also interested in learning mandarin. Thus, Disney 3-D is also suggested to include educative materials, so people who watch the movie can benefit from it.

6


Thirdly, they need to segment the market base on psychographic. This is the important base as it could determine how the lifestyle of customers can be affected through the services. Disney should educate the consumers that ‘why watch Disney 3-D?’ Tell the consumers why they have to watch Disney 3-D rather than normal animation movie and why they need to choose Disney as their priority choice compare to others brand. The value delivering to the customers must be clear and accurate. In short, Disney 3-D should make itself different from its competitor, emphasizing on the service provided, included the elements that competitors don’t have or less adopting, and strive to make it possible to change the lifestyle of consumers, switching from watching normal animation to Disney 3-D. Also, Disney 3-D should use the focus strategies at the same time, by understanding the market’s needs and wants, local culture, marketing style and so on to avoid the unexpected circumstances to be happen.

7


Production Site Walt Disney, after his worldwide success, has known what was the key for this: The strong belief and the steadiness courage. He underscored that everything had started just with a mouse. As we can understand that dreams can be considered like a first step. But for reaching to the summit, there are too many steps to climb. He had achieved all of them and created a company that is the major player in the US economy now. The company is standing tall for 90 years. As being large and the oldest one, this shows the stability and an ongoing success of itself. And most of the companies are willing to have this kind of existence in the economy. From the adolescentsâ&#x20AC;&#x2122; point of view innovation and creativity can be the most important point for old companies. On the other side economists measures the success with the safe growth and the capacity for using high technology. Fair enough! What is the pivotal point for a company? The answer is production site. As is valid for all companies, Walt Disney has done investments mostly for its production site. It has 7 sound stages, one Business Street, several sign/graphics and pant shops at the main area that the company has been located. For a 3D cinema, these areas can be improved and their numbers should be increased. Of course, these investments wonâ&#x20AC;&#x2122;t be enough for a company to progress itself in the global world. For example Marvel and Pixar, who are the acquisitions of Walt Disney, created great opportunities for it. By courtesy of them, Walt Disney had improved its animations and welcomed new characters to its family. So 3D canâ&#x20AC;&#x2122;t be impossible with the good partners and well-organized production site. The Walt Disney has that corporeal power and a very good image to dispose 3D in their job. The rest thing is about to turn imagination into the reality.

8


Entry Mode The Disney 3 â&#x20AC;&#x201C;D is basically uses first mover advantages for entering into any foreign market. They study the market and make some competitive edge in the market to get Disney world in this way. This is the way Disney invests into foreign markets. Most suitable entry mode for Disney green field- developing countries often offer prospective companies tax-breaks, subsidies and other types of incentives to set up green field investments. Governments often see that losing corporate tax revenue is a small price to pay if jobs are created and knowledge and technology is gained to boost the country's human capital. In recent years, multinational corporations have become increasingly ascendant in the world economy. Therefore, Disney tending to make corporations (MNCs) suggests that it is optimal for a firm to be a MNC, and thereby locate some of its production centers outside its home country if three different conditions are satisfied. First, the firm has to own knowledge about products and processes that endow it with an advantage over competitors within its industry. For the sake of simplicity, we can call this intangible asset â&#x20AC;&#x153;technology.â&#x20AC;? Second, location in the host country should provide the firm some advantage like elimination of tariff costs that induces the firm to locate (part of) its operations in the host country. Third, the endeavor of the firm to produce the relevant good in the host country, thereby internalizing the process of catering to the demand in that country, should be more beneficial than arms-length transactions like licensing. Disney 3-D should enter a new market: as a wholly owned subsidiary (WOS), by way of acquisition of a local firm, or in partnership with a local firm (i.e., as a joint-venture or JV). Yet, the mode of entry by MNCs into a developing country 9


has important implications for its process of development. Specifically, the mode of entry of a MNC may determine its willingness to transfer technology to its affiliate, both because a low level of control would lead to a relatively low share of the benefits arising from the transfer of the technology, and because a low level of control would reduce its ability to prevent the diffusion of the technology among competitors in the host country without adequate compensating payment.

10


Staffing With the production and implementation of these new cinemas and theaters, Disney will have to consider hiring a lot of employees in order to keep up with the demand. Disney will definitely have to hire new personnel but at the same time, they should also use current employees that know what it means to work for Disney to help run operations. Disney is a known brand and you do not want anyone working in top management that will ruin the Disney reputation. With wanting to create these cinemas all over the world, it will be very important for Disney to use current employees as well as use locals. Just because the current employees knows how business works in one area in the world, does not mean that they will be successful in a different part of the world because of culture and language differences. It will be necessary for Disney to combine a current employee with a local so they can help each other out with the ins and outs of the business. While the current employee can help with operations, the local can help with marketing and making sure the business is targeting the market with the correct language and the right strategy. Disney will also have to hire people who are willing to interact with kids and are very energetic. We do not want someone with a bad outlook at life in a costume interacting with kids, which will lead to decreasing brand loyalty from consumers. The hiring decision should be fairly universal within all regions and positions of the company. It would be wise to have locals occupy the lower level positions. This would benefit the company because they already know the culture and language of the region. This would minimize the amount of training time and the cost of training to the company. Mid level employees should be a little more diverse but still include locals that can stay on top of the lower employees. The most diverse group of employees should be top management. The company 11


should spend more money training these employees and giving them a chance to get used to the new business. Disney will also like to hire a legal team in each region that knows the corresponding countryâ&#x20AC;&#x2122;s laws. Laws are different in each region and country and there is no way any one legal team can keep up with all legal issues.

12


Marketing

Marketing is going to be different in every region of the world where Disney decides to put a cinema. Where something works in one part of the world does not mean it will work in another. There are a lot of cultural differences as well as language differences. We already know that Disney will focus to market to kids and families as they have before which will be no different, but they will have to convince parents that the new 3-D films is something worth going to watch. Disney will have to set up commercials, billboards, Internet ads, etc. to reach the entire world. There will be many challenges that Disney will have to face concerning their advertising and marketing strategy, including cultural differences, language differences, and legal differences. People in different countries and regions have different beliefs and different values and Disney will have to take this into consideration. While Americans are self-promoting, cultures like Japan are not. The same marketing strategy will not work everywhere. Different gestures and words mean different things in different areas and Disney has to be real careful with this. Although one word may mean something positive in one country, it can mean something totally different somewhere else. There are many examples where companies have had to rethink their strategy because of language differences and we want to avoid that at all costs. That is why it is important for Disney to hire locals and keep current employees to help with the transition from country to country.

13


As mentioned above, there are also many legal differences they will have to deal with when it comes to marketing. What is acceptable in one country is not in another. Disney would want to avoid all these challenges at all costs because it can hurt the brand name. A solution to this problem would be to hire a legal team in each region as was stated above in the hiring section. Each legal team would be responsible for finding all applicable laws dealing with marketing in each region and relay that information to top management of the marketing team. This will cut down on a lot of costs coming from lawsuits. Disney will also have the opportunity to use their parks and resorts as a place to advertise. It will be to their benefit to announce the coming of this new service all over their flyers and parks.

14


Payment Arrangements There are few types of payment arrangement that Disney can make. Firstly, Disney had to pay the supplier. Building the cinema need a significant amount of money, Disney is suggested to pay the constructor by installment, or when certain part of construction had been completed. It is to ensure that Disney can have more cash for turnover in others financial activity to generate a better income. Secondly, Disney needs to collect the money by providing the services. To receive payment, collecting cash or debit card/credit card are those most general way to be in cinema sector. However, there are huge rebound from customers stated that they face a long queue while purchasing the ticket. It is good if Disney able to solve the problem by providing the online payment, so the customers only need to print the ticket out and show it to the inspector in entrance. This provided the consumer convenient, at the same time; help Disney to save some printing cost. However, there are also challenges to launch online booking ticket in Disney cinema. For some developing countries such as Malaysia, the people are very concern about the online security, they do not feel confident with online payment. Disney should do something on it to improve the confident of consumers to use online payment. For example, educate them the process of buying ticket through online. By doing so, it does not only increase the confident to use online payment but also reduce the wrong purchasing ticket by consumer at the same time. Moreover, Disney can also do something ‘special’. Disney can improve or upgrade the technology being use and enable the consumers to purchase the ticket through kiosk system, which is still not very popular to be use by cinema. Instead of trading with personnel, consumer might feel more ‘privacy’ and convenient, as everything is get done by themselves. 15


In short, Disney has to provide the customers the convenient way that suit the consumer most in that particular area. Different area might apply different type of payment. For example, Internet booking might not applicable in the countries where Internet is not widely used by the people in that country. Disney should choose the ways that can improve the satisfaction of consumers the most.

16


Capital I believe that our business should actually use our internal funds. The reason being is the mere fact that why should we as Disney one of the largest entertainment companies in the world, out source for money, when we have more than enough start-up capital to start something new, and or a new division of Disney. Now, money wouldn’t be taken from other parts of the entertainment industry like movies or music, but only from our 3 theme parks as it is. You might be wondering why just the three well for one park for example: “In 2007 around 47 MILLION people visited Disney world. At the discounted rate of $25 each that would be $1.175 BILLION just from the admissions. If you look at the regular admission of around $67 dollars they made $3.15 billion. JUST from admissions. That doesn't count the average money spent per person who visits which is around $30. That is another $1.4 billion. To be successful a company should profit around 15-20 percent of their gross income. So Disney probably

cleared

around

900

million

dollars

from

Disneyworld.”

Cited

from

http://wiki.answers.com/Q/How_much_money_does_Walt_Disney_World_make_in_a_year So, for that example, that is only one theme park in the United States. The one in Florida, if you get the “World” and “Land” confused. Now, let us take that number and multiply that by 3, not including the exchange rate from the “Euro Disney Land” we make on the theme parks alone 3.325 Billion dollars. Now, the other entities incomes wouldn’t even have to invest with that type of return. Therefore, with that money with less than half of that amount we can buy the lot, build on that lot and make small amusement parks around the world. It would be fairly easy to promote the brand since the brand is already made. This brings me to my next point, challenges and problems with developing the product or service? Well, since Disney is such a world re-known name I don’t believe that there will be any 17


problem branding the product and selling the service. The product Disney from movies to music, to TV shows, to Mickey Mouse, everyone loves those ears, not to mention tinker bell, product branding is spoken for. What service would we be selling? Well, the service of entertainment of course. Now, a problem might come up, the money given to the park for entrance in a lower developed country. Well, since the park is going to be considerably smaller than the 3 giant ones we have in the states and in Europe we can actually afford to cut costs on entrance, food, shows, etc. Why? Well, ultimately for the simple fact that the park is smaller. There is less manpower to run the park, less electricity, and less to pay for the lot, which ultimately gives us a gain in the long run for well, expendables.

18


Likely Challenges All companies which decide to go into new market and gain a certain part of it, is always faced with some difficulties and challenges, such as advertising, competitors and so on. Our newly formed company also is not exception, despite that it is a global company and won't have a lot of difficulties with marketing, because Disney is well known all over world, but it can encounter with other challenges. Firstly, we think the most important challenge will be competition with others cinemas in that area where we project our cinemas. Also, three - dimensional films (3D) is not news in the world, all cinemas show such films. In this way, we think that we should especially introduce our entertainment. For instance, dressed up Disney characters can walk around the theatre and invite especially kids to come and experience the different adventures with that characters in the films. It also will be a part of marketing. Another challenge that we encounter is making lower prices for the poorer countries that they to be able afford our service. Although we would like to allow under developed countries to enjoy the amenities of our cinemas, Disney also has to make a profit. They want to make the prices low enough for everyone to enjoy but not too low where they cannot afford to keep the business running. Moreover, one more challenge can be, that children are interested in other animations, which are popular nowadays, for example, The Simpson. In this way we should to persuade parents, that Disney animation is really childish and censored contrary to modern movies, moreover it is classics, which must see every child. Also three - dimensional view creates certainty sense and takes children like in a real huge Disney Park, if parents have no chance to take their child there. It gives the kids a taste of what it means to be part of the Disney family. 19


References Text: Growth Never Stops At Disney Website: http://seekingalpha.com/article/

(http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/WaltDisney-Mission-Statement.htm)

http://wiki.answers.com/Q/How_much_money_does_Walt_Disney_World_make_in_a_year

20


The Hybrid Solar and Gas Powered Car

+ = Team 93 Ktoan Ktoan

Putri Yuliantini

Grazvydas Ilekis

Cansu Ă&#x2013;zdemir

Hariss Apriyan

Keshana Rawls

1


1. Product/Service: The product that my colleagues have agreed on is a vehicle that is capable of creating energy to power its motor by directly absorbing solar energy. Also, when the solar energy is not available, this prototype will be more than capable of driving on gas. By investing in this product, many countries will be able to increase their economic position. The development of this product will create jobs and innovation for the future models, as well as increase human ingenuity. Apart from being economically efficient this vehicle is also environmentally friendly due to the natural use of solar energy. An investment into this product will not only benefit the economy, but also each individual that decides to better their financial position, and also increase their stability in traveling distances rather than spending countless dollars on incredibly absurd fuel prices. This product has the ability to help many citizens worldwide save money on the rising gas prices, in doing so, all the money saved, will be used for other expenditures to boost the economy of each individual country. Increasing the human ingenuity means increasing the possibilities of an effective long term system. As a result it will create more jobs in the automotive, solar power, engineering, manufacturing, maintenance, and even the sales industry. With this product, we will only evolve our current civilization. Due to the nature of the vehicle, this product is not intended to exceed 100 miles per hour nor is it intended for luxury. The sole purpose of this car is to bring forth a possible solution and help many people to the constant increase in gas prices and increase environmental emissions

2


Pollution created by the burning of gas will be greatly reduced, due to the transmutation of natural solar energy to power the vehicle rather than synthetic fuel.

3


2. Target Market:

The target market for this product will be regions that normally have warm weather, fairly developed community, and a wide variety of people that are able to drive legally within the political system. The reason for this is because the warmer the region is; the more effective the product will be. Also coastal areas will be a target as well. In the United States the primary targets would be Florida, Southern California, Texas, Hawaii, South Carolina, in general the southern United States. For regions outside the United States, we will target the tropical islands

4


such as the Virgin Islands and countries near the equator. These regions are perfect for this product because of their reputation of attracting a lot of heat and sunlight. Also, in these regions due to the amount of technology invested in the development of the product, the area will have to be fairly developed and in good economic standing. The area should be able to afford the vehicle without much hassle. The United States, European countries, the Central American, and some Asian countries have some proven that they have a great economy and weather conditions to be primary targets. The types of people we are targeting are people that need to drive to many places. For instances employees/ business owner needs to go work/meeting, families traveling for a summer vacation, and other everyday activities. Instead of areas that depend mainly on public transportation as well as inclement weather such as the northern states of North America, and the UK.

3. Consumer Segment Toyota is one that is developing a portfolio of a business and became one of the most successful car manufacturer, except that Toyota has a very wide range of products in various countries, and compete with other manufacturers. Consumer segmentation in these products are more targeted to the developed and developing countries, such as The United States and Japan, especially to young people. In promoting done by placing ads on television, magazines, newspapers, and website. In addition, Toyota marketed their cars as being hip and fun with memorable slogans like, â&#x20AC;&#x153;you asked for it, you got it, Toyotaâ&#x20AC;?. 5


In the special side of the prototype car powered by gas and solar is a product which is quite expensive but it is comparable to what is obtained. Consumers can save fuel and no need to buy enough fuel is expensive and scarce. The product is also one of the friendly environments and has a very high quality. In the supply side there is no bargaining tactics of prices that is the hallmark of Toyota. 4. Production site or service personnel location: This product will be produced in each country. This can save on production costs and reduce the costs of delivery to the consumer so much cheaper and eliminate waste. Customers can easily get this product. Due to the recent rise of technology innovations in the Dubai, It will be our primary location to produce these vehicles. Another location will be in the southern parts of South Africa, some Hispanic speaking countries, a major part of the Middle East and Southeast Asian countries. The reason that these countries were chosen is due to the required knowledge about the attributes by the car and the cost of labor.

6


In production, these products are backed by service personnel who already have experience in the field. In the working process of the service will be divided into several section so it can work optimally and follow existing procedures and to improve the standardization of methods to ensure safe operation and consistent approach to equality. In making these products are made with sophisticated methods and will produce a quality product can satisfy the customer. In addition this product will have a good design so that customers can be attracted to buy it.

7


5. Entry mode: Toyota Motor Corporation was established in 1937. According to Japan Corporate News Network, in 2007, the firm sold over 8.5 million vehicles in more than 170 countries. Toyota is known to use a different entry modes in each country.

In the entry mode for these phttp://essaysforstudent.com/Business/Toyota-ModeEntry/38703.htmlroducts, Toyota will open a new branch in particular in developing countries. For these products, namely fuel gas and diesel will work with existing companies in these fields, even if there is no fuel going to get the imports of the fuel producing countries.

8


For employees will be recruited from the country concerned, it will facilitate the process pengerjaanya. In addition to the benefits that could open up employment opportunities in particular for developing countries.

6. Staffing:

9


Toyota has already some hybrid cars. One of them is ‘Toyota Prius ‘ and we want to work ‘’the same ‘’ prius team ‘’. We have got many reasons for this idea.The Toyota Prius has been voted 2005 Car of the Year by the 58 members of the European Car of the Year Jury. After 2 rounds of voting, the car was chosen from a list of 7 finalists and declared clear winner after gathering 406 points. Prius, the world’s first mass produced hybrid vehicle, is propelled by the combination of an electric motor and a petrol engine. This unique system, called Toyota Hybrid Synergy Drive, will spearhead the development of new environmentally friendly powertrains and is part of Toyota’s effort to create the ultimate eco car. Since its introduction in early 2004, Prius sales in Europe are expected to reach 8,500 units this year. Next year, the sales target has been set at 15,000 units for Europe, whilst an increase in production capacity will allow 180,000 cars to be sold worldwide. And Toyota Prius has good advantage for customer satisfaction. The car has really become a symbol of green and despite some controversy over it as a symbol, there is a lot of love for the car.Apparently, so much love that the Prius ranked #1 in J.D. Power and Associates customer satisfaction study.We want to maintain the same success with this method.

7. Marketing:

The market for the hybrid car is slowly growing that primarily led by the U.S. and Japanese Markets. In the past five years, sales for the hybrid in the U.S. increase from 9,500 in 2000 to 10


100,000 in 2004. By the end of 2005, the number of hybrid cars in the U.S. increased to 212,000, accounting for 1.3 percent of the total U.S. light-vehicle market. J.D. Power estimate the hybrid car market will account for 3.5% of the U.S. market by the year 2010, whereas, other researchers such as ABI Research & Automotive Technology Research Group give a more optimistic projection for the market. These researchers estimated the hybrid market penetration between 56% of the overall U.S. light-vehicle market. Toyota has already some ‘Hybrid Car Models’ including the Camry, Highlander and the 3rd generation Prius.Because of this we want to use different and effective marketing techniques. At first we want to change advertising style. Advertising is an important marketing technique. Advertising is a mass medium of sending product related messages. The advert and the messages are designed to meet the specific needs of the target audience. The cost incurred is relatively low as a large number of people are targeted with the same message. We want to emphasize the ideas of global warming and environmentalism on our advertisements. Global warming and environmentalism are growing factors in international relations. So the control of factory wastes ,smoke from vehicles,CFC from resrigerators and AC etc are important issues for our earth.And our advertising motto is ‘ People who love Mother Earth drive hybrid cars.’ Secondly we think that promotion is really important marketing. In order to promote an increase in sales of a product or service firms undertake various initiatives. We give our customers free gifts. ‘Free Gifts’ is of popular sales promotions activities. For example users of hybrid cars can benefit from our service free for one year. A company which is a good marketing strategy offers a wide range of opportunities its customers. For this reason we always give our customers free information. Hybrid cars has many 11


advantages and people donâ&#x20AC;&#x2122;t know that.We want to let them know :Hybrid cars have two engines for it to effectively conserve fuel consumption. It has the traditional gasoline engine and it also has an electric motor and batteries. The two engines work together in order to cut fuel consumption. With this technology, you will be able to cut fuel usage by more than half. Just imagine, with a hybrid car, you will be able to go more than 60 miles to the gallon. With this kind of savings, hybrid cars are definitely the car of the future.

Hybrid car owners virtually do not feel the increasing cost in fuel prices. This is the main advantage of the hybrid car. There are other advantages that a hybrid car can give you. Recently, the President of the United States has signed an agreement that hybrid car buyers will be able to enjoy tax incentives. This means that by owning a hybrid car, you will be able to save money on taxes. There are other benefits that the government imposes on hybrid car owners, such as free parking, and free entry to car pool lanes. Some even offer discounted fees on toll gates.

The braking in hybrid cars is also configured to capture the energy released and uses it to charge the batteries inside the hybrid car. This means that unlike electric cars, hybrid cars do not actually need to be charged from your home electric outlet. Help them do things faster, easier, less expensively. You get another opportunity to sell something every time they come back to you for help.

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8. Payment arrangements: In order to make newly introduced product available as many customers as possible, these new environmental friendly cars should be distributed through big and small retailers all around the USA and other hottest world places. This type of distribution will allow customers buy the product in most of cities and towns. Considering that retailers will look carefully to the new product, at the beginning there should be offered to sign contracts when cars are paid up after the sale. It will help to gain retailers trust and there will be easier them to agree to sell our product. We live in such a world, where internet technologies and online marketing occupy increasing share of traditional trade or even bypass it. In such case, it is essential to launch internet store or incorporate new cars in existing one. We can find where to market and sell solar energy and gas energy cars in Internet, but selling these products with Toyota brand could attract more customers. Internet store is practical way of marketing and selling cars for our company, and comfortable way of seeing and buying them for our customers. Customers could come to our affiliates or other retailers and test our product. Furthermore, clients could pay for the cars by many types of lease if they have not enough money or if they want to do that for other reasons. Of course there could be paid by cash or bank transfer. In the beginning we have to start from the biggest cities and with the time we will expand.

For the reason that our product is based on new technologies and environment friendly, it would be more expensive than typical car with internal combustion engine. In that case every countryâ&#x20AC;&#x2122;s government should subsidize or even already is subsidizing a part of expense to our 13


clients. (For example 50% like it is in Estonia and other countries at the moment). Of course they will save money on exploitation as well. As mentioned before, we will sell the products on credit, so our retailers will pay for the cars when they are sold. To control this type of trade, retailers should transfer money for the products to the bank account by the end of every month, for example. While there could be some time lag because of transactions between different banks, it is the most simple and reliable way to receive payments for the our product. And customers who buy our car, after the paying for it will get back a part of expenses from their government.

9. Capital: Toyota is big enough company to fund its prototype powered by solar and gas energy from annual profit or savings in bank accounts. However, funding a completely new product as using oneâ&#x20AC;&#x2122;s own cash is quite risky because the company risks losing all cash which was invested. External sources of financing would reduce risk of losing the Toyotaâ&#x20AC;&#x2122;s own cash. Equity financing would not be a good idea because it is an exchange of money for a piece of ownership in a new project. Toyota would not want to give a piece of ownership for additional financing because the company is very big and can provide necessary financing itself and make all their future decisions itself related to new solar and gas prototype. Raising capital through debt financing such as loans would not be a bad idea because Toyota is a well known company and it 14


is the one of the largest cars company in the world, so it would get a loan from any bank and as big as the company would want for minimal index rate. This means Toyota could finance new prototype project for quite a small price and would save its own cash. Saving the company’s cash would let the Toyota pay some dividends for the shareholders. If new prototype were a successful business project, then Toyota could expand it to other markets were is hot. For this reason the company should review possible sources of additional funding. First of all, if the business project of solar and gas powered car were successful then the Toyota would not want to share profit and future plans with others, so equity financing wouldn’t be a good option. Our suggestion is to raise capital for future expansion using the company’s own cash or using loans. The best way would be to use a mix between these two ways of funding because even for a company as big as Toyota, loans still have a price. Second advantage of using both sources of funding is that the expansion of the business would only be if it were profitable, so the risk of losing the company’s own cash would be minimal. The biggest challenge of raising capital for new prototype project would be to find the best proportion between company’s own cash and loans. But Toyota is big enough and has some highly trained specialists who could do the research and calculate the most effective proportion which could reduce the risk of losing its own money and take the loan with the smallest interest rate. To some up, our suggestion would be to raise capital for new prototype using a mix between Toyota’s own cash and loans. Reason being is because it is too big to share a potentially profitable product with investors.

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10. Likely challenges: Likely Challenge • Background Indonesia has more than Fuel Gas Fuel Oil, even when compared with other countries Indonesia still rich Fuel Gas. The Government also want to plan to use based Fuel Gas. • The Challenge At this time such as Fuel Company Pertamina from Indonesia, Shell of the United States, Total EP of America, and Petronas of Malaysia have to apply the fuel. Of the Company's Market Share is the most difficult even now Shell Pertamina in Indonesia have not been able to go beyond Pertamina. • Factors PERTAMINA the successful drilling of the BN-26 production test produced 2427 BOPD of oil and gas of 0.9 MMSCFD. Pertamina to reach the region's oil and gas production. Efforts to increase production in eastern Indonesia through the optimization of oil production by implementing changes to the method of lifting of the gas lift system to ESP (electrical submersible pump), development drilling and exploration. In carrying out the operation in the Eastern Region, Pertamina EP on the challenges faced by production cuts as well as problems produced water is quite high. The expert explained that Pertamina EP produced water management methods applied to the water injection method thus realizing an environmentally friendly operation. SHELL

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Fossil fuels are expected to remain the world's main source of energy for decades to come, but the source of sustainable energy, clean and comfortable also will be needed in the mix. Biofuels: Biofuels are currently the most widespread, ethanol, usually made from flour or sweet plants. Biofuels produced from biomass, usually plants, and liquid biofuels can be used for transportation. We are one of the world's largest distributor of biofuels and we are developing better biofuels that could see CO2 reductions and alternative fuel sources. Two main forms of biofuels today are ethanol and FAME (Fatty Acid Methyl Ester), which largely rely on food crops such as wheat or sugar cane as their source. We work to find the source material that does not compete with food crops, to develop a conversion process that will produce low CO2, and to produce fuel efficient. Our biofuels research including finding alternative raw materials. We are looking at finding new enzymes are hard to break down the cellulose in plants such as straw. Algae has potential as a sustainable source of vegetable oil, which can be used for the production of biofuel for diesel engines. It is early days but promising algae, because they grow quickly and can be cultivated in ponds of sea water and minimize the use of arable land and freshwater. Hydrogen Hydrogen is seen by many as the "fuel of the future", but still have a long way to go. This is an energy carrier, in the same way as electricity, and so must be produced from other substances. Most commonly, hydrogen is produced using steam reacts with methane and convert it into hydrogen and carbon. It can also be produced from water through electrolysis.

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The hydrogen can then be stored and converted into energy through hydrogen fuel cells, is now available for cars. In a hydrogen fuel cell vehicles a chemical reaction in a fuel cell usually between hydrogen and oxygen - creates electricity for the motor and exhaust emissions generated only pipe is water vapor. We learn as much as possible about hydrogen refueling and how to meet future customer needs. We engage in research and demonstration projects, and has opened a group of commercial hydrogen filling stations. PETRONAS PETRONAS is the national oil and gas from Malaysia and is wholly owned by the Government of Malaysia. Together with its subsidiaries and associated companies, PETRONAS, a FORTUNE Global 500 companies, has integrated oil and gas operations in a wide spectrum of oil and gas value chain. Business activities include exploration, development and production of crude oil and natural gas in Malaysia and abroad, liquefaction, LNG sales and transportation, processing and transmission of natural gas and natural gas sales, refining and marketing petroleum products, manufacture and sale of products petrochemicals, crude oil trading, petroleum products and petrochemical products, and shipping and logistics related LNG, crude oil and petroleum products. PETRONAS seeks to contribute to the welfare of the people and the country where he operates by developing and adding value oil and gas resources in a way that carefully balances commercial, environmental and social considerations. PETRONAS continues to utilize and develop new technologies to maximize the opportunities and further strengthen its capabilities as part of an effort to become a leading global E & P player. Gas & Power: 18


Gas & Power Business PETRONAS 'dreams of becoming a leading integrated gas, liquefied natural gas (LNG) and power player. To create a greater focus on core areas of growth, the business has been structured and efficiently into two main portfolios; global LNG business and Infrastructure, Utilities and Business Power. â&#x20AC;˘ Solution By using CNG for vehicles both subsidized and non subsidized. Of course, more profitable as more efficient, more environmentally friendly, and a more favorable again for keledakan risk due to lower fuel. Then for the damage by using a CNG vehicle is estimated at nearly 0% would not happen. This was evidenced by all of the Quality Control Expert, but not all vehicles can use CNG, CNG vehicles can use should have a special tool that is installed on the engine Converter Kid. This tool is to convert from gasoline to CNG, in Indonesia, especially Jakarta, CNG vehicles are already on Busway.

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REFERENCES http://www.oppapers.com/essays/Marketing-Plan-Hybrid-Car/404445 http://www.toyota.com/hybrid/ http://www.businessknowhow.com/marketing/5marktech.htm http://www.toyota-europe.com/about/news_and_events/prius_coty_2005.tmex http://www.ecogeek.org/component/content/article/616 http://essaysforstudent.com/Business/Toyota-Mode-Entry/38703.html www.toyota.com.au/toyota/company/operations/toyota-production-system

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Team #:

96

Client (Company):

McDonald‘s

Product/service: The possibility for every client to create a burger from as many various ingredients as he likes.

Number of Pages, including title page: 28 Team members: Name Maritza Mares Emilio González González Ceren Sönmez Julija Voitiechoviciute Lisha Liu Khesar Ogi Kee Mei Ping

Country USA-IL Spain Turkey Lithuania USA-NC Indonesia Malaysia

Did not participate


Contents PREFACE ........................................................................................................................................................ 3 1. PRODUCT/SERVICE .................................................................................................................................... 4 2. TARGET MARKET ....................................................................................................................................... 5 3. CONSUMER SEGMENT .............................................................................................................................. 6 4. PRODUCTION SITE OR SERVICE PERSONNEL LOCATION ......................................................................... 11 5. ENTRY MODE........................................................................................................................................... 13 6. STAFFING ................................................................................................................................................. 14 7. MARKETING............................................................................................................................................. 17 8. PAYMENT ARRANGEMENTS .................................................................................................................... 19 9. CAPITAL ................................................................................................................................................... 21 10. LIKELY CHALLENGES .............................................................................................................................. 25 SUMMARY ................................................................................................................................................... 28

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PREFACE The company “McDonald’s” is very well known in the entire world. It is profitable because of very detail planning and paying attention to every factor that could affect the business. Our team has the idea to make this company even more profitable with the help of the new service “Create a burger”. This is the idea about the possibility for every customer to create its own burger from as many various ingredients as he likes. Further in this business proposal this idea will be described wider and the likely challenges causing the problems for the company will be named.

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1. PRODUCT/SERVICE We are offering for the company “McDonald’s” the new service “Create a burger”. It could be described as a possibility for every client to create a burger from as many various ingredients as he likes. The client could choose all the ingredients very detailed: all the spices, sauces, bread, meat, vegetables, even the way how the meat or bread is cooked. This service should attract new customers who are on a diet, who propagate the healthy way of living, or those who are very fastidious. Also this idea should be attractive for the kids who would understand creating a burger process as a game. This segment of the new customers would be big enough to make additional profit for the company. This service should be possible in most the “McDonald’s” restaurants all around the world. It would reduce the distance between the regular restaurant’s food and the national food of the countries. The possibility to choose favorite ingredients would let to make meal more similar to the usual food in that country. To sum up, the service “Create a burger” seems successful because it is attractive for the different types of customers and can be adjusted all around the world.

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2. TARGET MARKET

“McDonald’s” is known worldwide for continuously improving as a company trying better serve their customers. Our proposal is exactly in “McDonald’s” favor, which will lead to better serving their customers by letting customers bring out their creativeness by making their own unique burger just the way they want it. They will also have more variety of ingredients it will be limited ingredients but more of a variety and healthier. Our target markets are consumers who live healthier life styles or simply want to be creative or be their own boss of the contents their food contains. We definitely would like this idea to expand globally to all the “McDonald’s”. Since “McDonald’s” is already global first we would like to try our “Create a burger” in some “McDonald’s”. This product will be successful with our market because research has shown that there are more people trying eat healthier. Consumers that are health conscious, that want to lose weight will have different ingredients ranging from bread to how they want their meat cooked steamed or perhaps grilled. This will give them an opportunity to make their burger in control of their own self, still satisfying them. For our creative clients that enjoy being creative will have an opportunity to make their own style burger. And who knows, it can be “McDonald’s” next “Big Mac” except the healthy version. Actual customers without a big need of customization are also target to the service, even if what they want is just to made small changes to an actual product.

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3. CONSUMER SEGMENT The idea „Create a burger“ targets to different types of customers. This idea can attract people with very individual wishes and demands. We will try overlook the consumers segments that we are trying to attract and will explain the strategy we are going to use. The first type of customers we are trying to attract is people allergic to any kind of food. The possibility to „Create a burger“ lets to avoid such unpleasant accidents as allergic reaction or even the sudden death from allergy caused by food. Even if the consist of the food is detailed written in the menus, sometimes these disasters happens. When the client chooses the bread for the burger, the meat and way of preparing it, the vegetables, sauces and other extras, the possibility of such an accident is minimized. Therefore, customers can prevent from choosing food that is very much in common people are allergic to such as egg or wheat. The other type of the clients that should be interested in our offer is those who propagate the healthy way of living, are on a diet and so on. These customers could combine the meal with as small amount of calories as they like, choosing the fatless ingredients without any sustaining sauces, with bigger portion of the vegetables and so on. Also choosing the way how the food is made, they can minimize the calories (the boiled meat instead of baked or fried, the dark bread instead of light and many other variations). Instead of putting mayonnaise, they could put other type of sauce which is less fattening. This new service will attract many new customers, who earlier avoided fast foods restaurants because of the unhealthy food (they consider as junk food). On top of that, this new idea should be able to attract more attentions from the vegetarians. Even though there are certain countries who already have vegetarian burgers, but with this idea, a wider range of vegetable burgers would be provided and also more different

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types of patty to be chosen from such as patty made out of vegetables such as corn, mushroom or wheat. Moreover our idea should attract parents, who are paying attention to their children nutrition. Like the people who propagate the healthy way of living, the parents could choose the burgers created by themselves, in order to give their children as nutritious food as possible. Parents are always worried about their children having fast food meal such as „McDonald‘s“ because it is not healthy. However, with this new idea, parents do not have to worry much as their children can pick healthy ingredients for their burger. The young growing organism requires much vitamins and minerals that can be included in the meal by their selection. The attentive parents wouldn‘t spend the chance to give their children the best. Parents who has no time to prepare meals for their children at their own home due to busy schedule, would feel that stopping by at „McDonald‘s“ to get a burger but yet in a more nutritious way is very convenient for them. „Creating a burger“ should be attractive for the kids too. It can be understood like a game by the youngest clients. As it is known, some children have special needs, sometimes even strange taste. So they could choose the food that matches their taste, and at the same time the parents would avoid conflicts with their kids, what they should eat. Also the kids menu could be refilled with many colorful boxes for the burgers, which could be chosen too. The other attraction for the youngest customers could be the contest of the tastiest burger. Buying the combined burger they would get the coupon and could fill it with parents help. The questions included in the coupon could be such as: the name of the burger, its ingredients, the drawing of the burger, name and the contacts of the burger‘s author. These coupons should be collected from all the kids, eating in „McDonald‘s“, and once a month the winner of the most tasty burger

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should be selected and awarded. This attraction would encourage kid's creativity. Certainly, also this could help to increase „McDonald‘s“ clients number by kids help, involving their parents. „Create a burger“ idea should attract very pernickety people, who require special ration. Here we are talking about people who like feeling important, who want to be heard or those who just like the innovations. It‘s not a secret that there is the type of people who are hard to please. But realizing this idea such a problem must be solved, because the client chooses all the ingredients by himself. Certainly the dissatisfaction of hypercritical customers can‘t be avoided by hundred percent, because they can find other reasons to be unsatisfied (too slow service, uncomfortable interior of the restaurant, too hot or too cold food and so on), but their criticism could be minimized by letting them to combine the meal. They could blame only themselves for the wrong taste of the burger. „Creating a burger“ idea could be connected with different eating cultures. As it is known, people from different countries, especially from different regions prefer particular kind of bread, meat, vegetables or spices. The number of the ingredients should be increased thinking about national cuisines. The restaurants in the southern regions should include more spicy spices. Instead of just using bread as the burger, „McDonald‘s“ could also use rice burger to attract more Asian customers such as the Japanese. Such and many other variations could be adjusted in every region. In this way the idea of „Creating a burger“ should be attractive for those who are the real patriots and love their country‘s national cuisine. Finally the big eaters will be happy too as they could create his favorite big monster burger. Talking about the strategy to attract people, firstly „McDonald‘s“ should focus to these different segments of customers described above. It‘s very important to analyze people‘s wishes

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and demands. Only after the good analysis the best results can be reached. Focusing on the demand is the best way to succeed. Therefore to focus on the different segments of customers, the best strategy to use is differentiated strategy. As the idea of this project is to allow the consumers to create a burgers with any ingredients that they want, the variation of the product will be much more diversified .The ingredients that consumers can chose from will be the ones provided. Even though is limited but there will be more varieties of ingredients will be provided. As for the pricing, the burger price will be based on the amount of ingredients that is used to make the burger. So the more ingredient is used, the more the customers will be charged but within a reasonable price range. That way also some current customers will avoid the frustration of paying more when they "reduce" the number of ingredients. A belief of fairness will be applied by all customers. As for the place, it shall be available at certain “McDonald’s” outlets to see how the new innovative burgers are being accepted by the consumers. If it is well accepted, more outlets shall be open. It shall be open at locations they has good crowd any maybe at college and universities, where the student could give more feedbacks about this new product. Since the name of „McDonald‘s“ is known widely, it wouldn‘t be necessary to assign the huge resources for the advertising. However, different advertisement should be used for the different segments. A more health related advertisement would be used attract those who are more interested to health, on diet, vegetarians and for those who has allergies. While a catchiest, fun and interesting advertisement would be used to attract parents who are always busy and for children to show how fun it would be to create their own hamburger. A clear message should be sent through the advertisement like the fun and the advantages of trying this new burger.

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Certainly the advertisement is needful, but itâ&#x20AC;&#x2DC;s degree can be no such high like the other similar unknown company. So more resources could be assigned to the other fields.

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4. PRODUCTION SITE OR SERVICE PERSONNEL LOCATION In this project plan named “Create a burger” there is no big need to any change about workflow, use of equipment and general characteristics of workplace. Just raw material expansion and increase in labor are on the carpet. Labor will be increased in direct proportion to the number of production capacity. Eventually some new small tools will be needed but never new machinery. We are mentioning how big is demand of the people to our idea according to our research , our idea get acceptance in the market as value as subway sandwiches. Especially, it is obvious that the production of goods which are anti allergic and satisfaction of special tastes, need specific area. That is the reason why we propose an extra plot with equal distance to not only all the “McDonald’s” fabrication zone in the world, but also for every 40-50 office which render service to self made burger. This is the biggest affect of out sale goal. We considered the structure of demand and the targeted level of sales while setting our output plan. There is no need for additional land as a requirement of our business. On the contrary, we can use our every local production areas actively. These areas are also adequate for the production of new and optional products. Although the open production area need is stable, the drawing and planning stages of close greenhouses for new products which can be damaged from winter cold is begin. Because of we have no chance to determine the common climate or production factor for offices which we use self-made option in, the quality of products may vary depending on the continent. It is clear that this production plot factors are directly compatible with our targets. The provision of new investment in the fields shall be compensated as soon as liquid. If there 11


is a possibility regarding the growth of administrative building, depending on the situation, it will be planned by us. Indeed, a new control and management range existed with the consist of new area. The other subject which should be considered is the size of the storage. Stores of the durable goods are also ideal storage for the material of durable burger produced for the self-made burgers. The only doubtful subject is that the storage held in a special low heat may be come up short. In this case the construction of an extra storage is expense item

for us. The personnel employed in the service and especially qualified staff in the

field of the training any protection of new product will be chosen from the region if possible, but if not at least their residence cost will be paid. For sure, we prefer personnel who live in the region. This is the best way to satisfy our personnel and to minimize the road costs.

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5. ENTRY MODE As a market entry mode we have to use our Franchising connections. On the stage of product supply and acquisition, that could be easier to find some solutions about our image in the market. Every single Franchising should determine its own production plans for the deployment and management of each branch and we must ensure the reporting of results, so we will set up a wholesale management mechanism. After that, with giving the right to govern within their own borders, we will certify our profitability of production. As a resume, and because the service is targeted for all McDonalds restaurants that want offer the service (excluding the small corners at some places that only have a very reduce mix of products), the entry mode is through the actual McDonalds franchise system.

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6. STAFFING According to “McDonald’s” publication (McDonald’s Corporation, Retrieved in 200711-24), there are more than 15 kinds of Burger, more than 12 kinds of Chicken and fish and so forth in American Local Restaurant right now. Interestingly, all of these products can be assembling, cooking, packing and delivering by 1 person averagely in 5 minutes. What’s more, there are 3-5 cook in the kitchen, 1-2 clerks, 1-2 waiters in a restaurant. Averagely, only one person can take all the jobs in 5 minutes, and there are about 7 staffs in one shop, they can serve for 7 customers at the same time. Take an overview of the whole world. More than 33,000 branches located worldwide. And there are more than 300 kinds of burgers, 250 kinds of chicken and etc., uncountable staffs working in the shop. So that in the worldwide, there are enough staffs take response for every food. Not only for the staffs in the physical shop, there are many staffs who worked online or some manufactories. In the whole supply chain, there are many sections, such as meet supplier, delivering staffs, cooking and freeze staffs, research institution staffs and so on. There also are countless staffs directly or indirectly in the “McDonald’s” manufactory organization. Should the company hire the new personnel or use current employee? There are some arguments against hiring the new personnel. Actually, because the most of employees are low skilled labors, they repeat their job, such as cutting the meats; cooking the beef hamburger; or some jobs else day by day. So ignoring the skill requirements, they can keep the old employees for a long time. Especially for American customers, their commerce behaviors come with a kind of inertia. The old staffs who working in one shop for some years, they may recognize many of the customers, know their habits, tastes, so that they can serve them better 14


than the new staffs. And what’s more, the old staffs have more experience about cooking, management, and they may have group tacit. They can finish the whole service more effective and efficient. So from some aspects, they can save money than the green hands. On the other hand, there are several arguments of hiring the new personnel. The company should hire some new personnel especially in the research institution, because only the fresh blood can revolute the old products, the new staff may bring some new idea for the taste, intergradient, advertisement and even management. The strength for the new staffs is the absolutely passion, brainstorm. They can keep up the development of the society faster than the old ones. Also “McDonald’s” needs the low skilled labor, so that no matter the new staff or the old can hold this job with some simple training. So it’s not a big problem. The only problem for hiring or not, it’s the budgets from CIO and finance functions. Should the company use locals, expatriates, or third-country nationals, and etc.? The first way is to use locals. The most important strength for the local labors is the acquaintance to the local. Because these staffs have local background, they understand the local culture so that they may easily acceptable by the local customers. Also most of the local staffs live in the city or suburbs where is not far from the work place. So the timing, travelling, and some other aspects are better than other two kinds of staffs. The other way is to hire expatriates. They may have more experience from abroad. They may bring the advanced or new idea, management methods or others to the local “McDonald’s” restaurant. So the local shop can use for reference. They can improve every aspect to improve products or services’ entire quality. Also company could employ the third-country nationals. Under several cases, the manager should think about employ some nationals. Firstly, the new branch in another country,

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which is a strange place the manager, is not so familiar with. He should hire some nationals and take their advices. Secondly, if the national have absolutely ability no matter in manage or cooking, manager should employ him. Only for the update and improve the quality. Thirdly, for advertising, they employ some nationals to appeal more customers. Most of the foreigners can catch customers’ eyeballs because they are different. So “McDonald’s” can utilize this character to extend its reputation and attract more customers.

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7. MARKETING “McDonald’s” was reputation on its hamburgers that contains beef, chicken and pork burgers. For some culture custom, country such as Indians is barred to consume pork or beef. So “McDonald’s” should create a self-created burger due to culture difference. They can create their own style hamburger that can be made of special ingredient such fish, lamb, chicken or any other ingredient that is suite to the country. Marketing Mix-4P’s apply to the “McDonald’s” 1. Product – A physical product or service offered to customers, this contains aspects such as packaging, guarantee and appearance. That also includes the size of the product, due to some personal quantity limitation required. 2. Place- The location that offers a good ambience, good service and hygienic environment which afford free internet, entertainment and other welfare that attract to young generation. 3. Price- Made the discount functions to attract middle and lower class consumers. 4. Promotion- Make customers remember the items, aware of the items and love it! For specific date, store may create welfare games to make everyone happy smile. Prize may be the free coupons of McDonald’s famous meals such as happy meal, combo meal, family meal etc. to attract and promote customers to come again. Global Marketing: Adapt to diversity culture, concentrate entirely to customer’s favorable taste, lifestyle, value system, perception and languages.

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Business Model: 1. Franchise style: customer can chose what to create for their meals. 2. Product consistency: since “McDonald’s” is the world’s largest fast food chain should create an online survey to achieve consistent product taste and quality worldwide. 3. The brand: To establish everlasting brand reputation. Appearance to show like a retailer store, fantastic indoor playground design for kids, happy every moment.

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8. PAYMENT ARRANGEMENTS To analyze this point it is first required to identify the eventual money transactions directly or indirectly caused as consequence of our proposal. Our idea, "Create a Burger" can be considered both a product and a service. The customer will receive a new product: his own burger. But to him, “McDonald’s” is providing a new experience in the form a new service. On one hand we will have to face the payment of the customer to the restaurant and on the other hand the different payments made by “McDonald’s” to be able to provide the new service. As far the customer is concerned there are no changes to the actual system as he will pay the same way than for any other product he buys at the “McDonald’s” restaurant (cash, credit and debit cards, ticket restaurant, coupons, etc). In fact the new burger in another item that will be added to the ticket and paid together with other items. About payments made by the restaurants, there are minor changes as “McDonald’s” will incur in costs at several levels (see Capital). We do not foresee any change in the payment arrangements to suppliers even if the restaurants will need new products or services in order to successfully implement the "Create a Burger" project. “McDonald’s”, as a highly integrated franchise system has clearly negotiated payment arrangements with the main suppliers and with the corresponding subsidiary. The new goods and equipment will be paid under the umbrella of these pre-negotiated and contractual conditions (that will be different in different countries according to local practices and negotiations). Finally about payments made by the main “McDonald’s” office (world-wide) and even the subsidiaries, “McDonald’s” will not be faced to take an special payments arrangement as the work will be done either by a consultancy company (like our own team) or internally by the 19


marketing and new products division and will not represent a figure needed to be financed. The most viable way will be a payment taken directly from the bank account without any need of financing.

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9. CAPITAL To estimate the capital needed in order to successfully implement the project we need to focus on several areas that will incur in cost: 

main office or headquarters (definition and world-wide launch of the project).

local operations (by country or geographical area subsidiary).

local operations (each individual restaurant)

At world-wide level, “McDonald’s” Corp. the project definition cost will be supported by the main organization. We estimate a relative low budget requirement for the project definition phase (in the rank of sub 1.000,000USD). Different costs that will contribute to this amount will be: the analysis of all the options the customer will have in order to "Create a Burger" (considering all the local markets), design of new packaging, marketing corporate materials for the restaurants, preparation of training material and corporate documentation (only in general terms and in English as each subsidiary will care of translation and perform local adaptations) and finally modification of software in the reordering system, at point of sale, self ordering kiosk, PDA order taking, and the new internet web "Create a Burger". In this figure we do not consider any cost in advertisement (neither the creative support material -spots, ads, etc- nor the direct cost of the TV time, banners, magazines or press presence). The reason is that these costs will not be additional to the budget “McDonald’s” already has related to marketing, promotion and publicity. Due to the size of the company and the different projects they are used to be involved in (ex. McCafé or the new POS system) this one, even if notorious from the market perspective will not have an important impact on cost as will not require big investments on each individual 21


restaurant. Hence, the needed capital will be provided with its own resources without the need of financing. We can't forget that “McDonald’s” is a great cash generating machine and they have been increasing dividends during the last years. Al mid-level (subsidiary and geographic area), the cost will comprehend different points: the specific marketing campaign launching the new product, the localization of the marketing and training corporate materials. In some cases, new arrangements with food and other suppliers will be needed (actual ones or even new ones for some condiments, packaging or some items not present in the inventory). This will affect the reordering system too. The cost will be covered with the royalties paid by the franchisees (and the corresponding amount from the “McDonald’s” owned stores). Again, this amount will not need external financing and in the end will be covered 100% by the franchisees and owned restaurants. Finally at the low-level (individual restaurant) the cost will be high enough to be seriously considered by some franchisees as it will represent an atypical cost once the restaurant is in operation. For new openings the cost will be added to the initial investment (equipment and initial inventory). As in the past with some "unexpected" investments (i.e. McCafé) some franchisees could be reluctant but as a feature not "compulsory" for each restaurant this will not be a problem: as far as the initial launching is big enough the restaurants could adhere to the system at its own pace. Even more, this project could help some of the restaurants to implement the kiosks for customer self-ordering and in fact will be another reason to take a step forward. The cost for each restaurant will be due to the following reasons: 

Electronic Point Of Sale Sw changes to incorporate the new "create a burger" feature in the tilling system. Although this cost will be shared by all the restaurants due that the

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tilling system is homogeneous and hence the cost per unit will be negligible it is important to notice that costs for installation and verification and training will arise. 

In the case of restaurants without the "order yourself kiosks" we consider that its installation should be compulsory as this service is mainly focus at people who wants take his own time defining their lovely burger and perhaps ordering at the desk directly with an operator could be tedious and inconvenient in some cases. The self service kiosks used to take the order are a key element in the project and will avoid all the problems related to people queuing at the order taking counters. These IT systems will allow naming the new creations and in the next visit to the store the customer could "recover" their creations without the need to reenter all the instructions/ingredients. They simple could order again the same item or take it as a base for some new variation. As a natural extension of the system Internet will be the other way to "create a burger": the customer defines at home or from any place with internet his burger, names it, introduced even some comments for other people to know and later they can order it on the restaurants using this reference. The restaurant tilling system will recover all the instructions from the web server and deliver them to the kitchen. No doubt that a new social media could emerge as “McDonald’s” could have an open space in internet with all the "inventions" of their customers. Other customers could try the inventions of someone else, put comments, etc. In the end “McDonald’s” could also institutionalize some kind of price at national level for the creation "more demanded".

Training to employees.

Marketing and promotional material: leaflets, displays, etc.

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New tools to process the food. No "big" machinery is foreseen as the idea is not to change the core product but the ingredients and the composition of some raw materials (bread, meat, etc). Then new small tools will be needed and some new arrangement and store space in the kitchen/fridge and preparation area.

All these cost will not be negligible and will be, depending of the size of the restaurant, number of tills and number of employees from a minimum of $3,000 to more than $20,000 in the case of stores not already equipped with the self service kiosks. The financing of this amount will be done by each individual franchisee as “McDonald’s” Corp. does not offer financing arrangements. We believe that most of them (the ones with the small investment) no need of external financing will be needed and the cost will be supported by the franchisee own resources coming from the day to day cash generation or his own assets. For all the restaurants with investment above 20,000USD (or local currency equivalent) we advise to ask for financing preferably on a leasing basis. Each country should be considered independently as taxes and local regulations can play an important role in the decision in order to optimize the cash resources and tax advantages.

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10. LIKELY CHALLENGES The possibility to „Create a burger“ sounds very attractive but it doesn‘t guarantee the success to the company. On the one hand choosing the favorite ingredients makes customer satisfied, and makes them feeling important, taking a part in creating the product. However, on the other hand this idea can cause several problems. Further we will try to analyze the likely challenges that „McDonald‘s“ can meet realizing our idea. One of the ways to identify possible challenges is to use the method „What if?“. It‘s necessary to think about every situation connected to our idea. Using „What if“ method all these situations are analyzed and the solutions are found. Forward are described several such possible challenges ant the ways to solve them. Firstly, the possibility to choose all the ingredients for the burger can make the customer confused. There are many variations and choices to complete the meal that client can get lost, forget what he wants actually. It can be too difficult for the client to combine ingredients that fit each other. Finally, the customer can be unsatisfied by the taste of burger, because not everyone can be good cooker. In this situation could help very attentive and supportive cashier who could give the best advices and offers in every situation. Firstly the cashier should clear, in what type of the burger the client is interested (healthy, spicy, piquant and so on). Then he could offer several the most popular selections among all the customers. This should help the client to make „Creating a burger“ process not complicated, very easy and simple. Secondly, „McDonald‘s“ is the fast food restaurant and the customers must be served through several minutes. It‘s very important not to break this rule in order not to contradict the philosophy of the fast food restaurant. Choosing all the ingredients of the burger in detail can take much time, cause long lanes, and make other clients unsatisfied if they are hurrying 25


anywhere. In this situation could help the additional cashier who could serve only clients choosing their meal in detail. There should be the different lanes in the restaurants for those who are ordering regular, already completed meals, and for those who would like to create their burgers for themselves. Besides that there might be some customers who are so used to ordering their burger using the 'Drive Through‘ way. This idea would be inapplicable for “Drive though“ because the customer could not chose their own ingredients. Also, the marketing is very important for the success of idea. The advertising is the critical aspect for the fortune of the business. It‘s not easy to make the attractive posters with such a big amount of detailed information. The advertisement should be aesthetic in order to impress the customers. So the main task for the marketing manager would be to create the simple and easily understandable poster, advertising possibility to take a part in process of making the burger. This problem could be solved making the different menus for those who prefer healthy food, spicy food or usual meals. Choosing this decision would distribute all the information into several different posters, making them not too much laden with the huge amount of information. Moreover, the costs of different food making ways could be too big for the company. For example, several ways of preparing the meat require different equipment. It‘s expensive to buy all this equipment and even more expensive to repair it very often in case of the breakdown. The problem could be solved buying the equipment with competitive prices and with manufacturer guarantee. Also, in order to use a place in the kitchen as economically as possible, the equipment could be multifunctional. Most of the machines used in the cooking process need much space. If the restaurants are laden with much new equipment, much free space will be required. So the managers should think about sensible layout of the kitchen, which avoids the rent of new bigger accommodation.

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The innovations in the menu of „McDonald‘s“ can be unattractive for the conservative people. They can be frightened by such big freedom to create their own meal without any restrictions. They would feel is such a hassle to actually create their own burger. This kind of customers can be saved by leaving the old usual menu. The creation of a burger would be inserted in the menu as the additional service, not as the new menu. Another challenge that would be face is the different culture in the different countries. Some customers may want to have pork as their patty but for Muslim countries such as Malaysia, the ingredients have to be halal. Therefore, while choosing the ingredients for certain countries, McDonald has to be do research what is accepted in certain countries and what are the food preference. If they assume that every country has the same preference, it could be a disaster. Therefore, a very through research should be done for each country before the realizing idea. Another challenge is the pricing of the burger. Since it is a free and easy, customers can chose to put in any ingredients they want. However, there will be a difficulty on how much the burger should actually be charged. For example, customer A may put five types of ingredients and Customer B may also put five of the same different ingredient but in a much more quantity and both customers are charged for the same price. It would be very unfair for a customer who put lesser quantity. Therefore, to solve this problem there has to be certain limit of quantity for each ingredient that is allowed to be used in the burger. Maybe „McDonald's“ can use a weighing system. For those customers that exceed the limited weight, they will be charged more.

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SUMMARY The idea developed in this business proposal is the possibility for every “McDonald’s” client to create a burger of as many various ingredients as he likes. This possibility isn’t very popular in most restaurants, especially in the fast food restaurants. So the new service would make “McDonald’s” more exclusive and popular. Our developed idea would attract many new customers to the fast food restaurants: those who are on a diet, who propagate the healthy way of living, which are very pernickety and kids who would understood this service as a game. Certainly the old clients would be saved leaving the old regular menu. This new service wouldn’t cancel the old meals. It would be just the additional possibility to upgrade the regular burgers or to create the new tastes. Also this idea should be successful because the fast food could approach to countries national food attracting new customers who are conservative and prefer the national meals. To sum up, idea “Create a burger” is easily adjustable and really profitable. It would improve the restaurant’s image making it suitable for all the tastes all around the world.

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X- Culture Project Product and Service VF Corporation opens up endless opportunities for clients looking to invest and introduce new products to well known successfully global brands. With an established brand, it makes transition when introducing new products easier to reach the target market. According to the VF Corp. home web site, they are the worlds largest apparel company, they have over 30 brands generating over $9 billion in annual revenues that reach a wide range of target markets based off wear-ability versus lifestyle and values. They have a global presence in over 150 countries, which means that there is much opportunity when investing in any one of these brands. All of the brands are divided in to collations based upon their target market. North Face already has an established brand image that is known as the ultimate outdoor brand. They offer an array of products to aid any outdoor lover to have a successful and enjoyable experience whether its attire to protect from whether conditions, or equipment to take on these adventures. This is why we suggest our investors to help North Face expand their equipment product offerings. Since North Face offers all of the necessary tools to achieve a healthy active lifestyle, it would be beneficial too offer high quality and user-friendly bicycles. â&#x20AC;&#x153;Bicycle is a convenient form of transportation and provides three distinct advantages that include price, performance and environment protection (GIA).â&#x20AC;? North Face already has a strong brand image, and is known for quality of products. Expanding the equipment will definitely tap into a market of consumers that already live an active lifestyle and could already be familiar with the quality and assurance North Face offers. Reports have shown the increase in bicycling; proving an opportunity that


North Face needs to take advantage of while it is still growing. “GIA (Global Industry Analysts Inc.) announces the release of a comprehensive global report on Bicycles markets. The global market for Bicycles is forecast to exceed US$77.7 billion by the year 2015. Key factors driving market growth include growing popularity of cycling as a preferred leisure activity, increasing environmental concerns over greenhouse gas emissions, rising fuel/energy prices, and increasing emphasis on health.” This forecasting for the bicycling industry is an obvious representation of the potential market at hand. North Face should be a key driver for this because they offer all the tools, but lack the necessary equipment. “As recently as 1965, world production of cars and bikes was essentially the same, with each at nearly 20 million, but as of 2003 bike production had climbed to over 100 million per year compared with 42 million cars. Bicycle production was 105 million units globally in 2004, a 1.5% increase over 2003 (WorldWatch Institute).” These numbers continue to grow as people look for cheaper and more environmental friendly avenues of transportation. Target Market As previously discussed, North Face already is a very targeted brand. It is offered globally, and targets an active consumer who wants quality and assurance that they can achieve a healthy and free spirit lifestyle. The new product should be offered globally because bicycling is an activity that crosses boarders and offers all North Face consumers the opportunity to be mobile regardless of what part of the world you reside. World meters reports that there “is estimated that more than a billion bicycles are present in the world, with nearly half of them in China.” Clearly bicycling is part of the global market


place. North Face already offers such a variety of products; they have something that crosses gender and age. These bicycles would do the same because North Face needs to take advantage of this growing market in these segments so they can maximize their presence as premier bicycles. According to the league of bicyclists, Americans alone accounted for “more than 20 million new bikes were sold in 2000, a record high. Throughout the 1990s, sales averaged more than 16 million bikes per year, including more than 11 million “adult” bicycles. “ With the downturn of the economy, there is even more room for growth because more people are bicycling as a means of transportation, not just leisure. The following examples will illustrate how different bicycle qualities for a couple different consumer profiles to fit the needs of different segments but still follow North Face overall company objectives. The Hiker: This bicycle is lightweight, but offers a variety of controls for a consumer to have ultimate control over their experience with the bike. Whether it is over miles of mountainous terrain or riding on mile long flat ground trails, the rider has the flexibility to change gears to a safe and comfortable control. The versatility of this bike will be its strongest competitive advantage because it is the “go to bicycle” for an adventurous consumer who likes a challenge but does not want to be overwhelmed with a heavy and hard to transport piece of equipment. The commuter: This bike will be comfortable, but smaller in size so that it is easy to move and transport. The ideal target market for this bike would be a consumer who lives in an urban area and either likes the exercise of bicycling as


main means of transportation OR needs to move around a large city utilizing the mobility of the bike and accessibility to transfer to public transportation with the bicycle. The challenger: This bike will be more of a medium to large in size, that is more durable but also a little heavier then the previous bikes. These ones are for bicycle enthusiast, but those who are more of an advanced level rider that can handle a stronger challenge. This type of bike is primarily used for training for marathons, or for any consumer who needs a bicycle to handle all their needs. They can use this for transportation, or a heavy workout. Because of the way this bicycle would be made, the consumer would have to be well aware of his/her capabilities to handle what the bike offers. These are only three representations of potential target markets that North Face could partner to customize design of bicycles to fit any profile bicyclist. Other markets that would be considered are women and children. Obviously size and weight of bikes are a huge factor, especially for the standard size of women and children to be able to ride comfortably. Also, to interact stronger with a younger consumer offering more personalized options will give younger riders more opportunity to almost â&#x20AC;&#x153;build their own bike.â&#x20AC;? This could include a child being able to work with their parent, and a bike designer to see what qualities, controls, and size of the bike is appropriate for the end user.

Consumer Segment There are many consumer segments that North Face can take advantage off to offer


premier bicycling to each individual rider. The most important strategy in for this proposal is differentiation. Previously we discussed only a few consumer profiles and how the bicycle types would fit these users based on their needs. Differentiation is the key, because although worldwide billions of bicycles are sold, there are many bicycle providers that already have a piece of this market, or want to enter the market. North Face can gain competitive advantage through differentiation in two distinct ways. First by utilizing their already established brand, these new products are already reaching a large consumer base globally. We already established the importance of offering North Face bicycles globally because of the need. Since the brand and symbol are already so well known, they should use this to their advantage. By partnering up with possible endorsers to promote high quality and extensive biking, it will support and only solidify the brand to the product. This method will not take too much work or monetary investment (only in the case of establishing an endorsement) because the name has been established and speaks for itself. This is primarily why we chose North Face to be the brand introducing new premier bicycles into this market. Second, North Face should offer a more customized option. Initially this is going to target a younger group because of the style and exciting factor. But it also can be expanded to any type of adult bike. Especially an active consumer who takes much pride in their biking abilities and is used as a form of expression. Consumers love options. When they are assured of quality, the more options to customization will allow them to become more interactive with the brand itself. Todays generation of buying power is all about consumer based response and very customer centric ideals. Similarly to options to customize your car from the ground up, one can do that with the new North


Face bicycles. Differentiation can be established from a type of exclusivity. One may think that if we want to reach all these markets that North Face has already tapped into in this industry, how can such a brand be considered “exclusive”? Exclusivity is all about consumer perception on what they have and wanting to be the one and only, or one of few with the product. In this case, North Face bicycles lines can offer limited edition collection of bikes and customized bikes to meet all consumer needs. Entry mode for international business, should be considered from various aspects, there are several decisions to be taken and should be considered, including : which market to enter, when to enter the market and on what scale. To find out what the market potential, we can consider several factors, such as market size, purchasing power of consumers, and competitors. The following entry mode appropriate for vf’s new product ( in case is a bicycle ) : Establishment of new subsidary A way to be able to expand abroad is to establish direct branches of the company that will directly target country. In this way, companies will be able to approach potential consumer market. This method is a way tis used by vf on previous products ( such as creating an outlet and create a branch that is different for production ). Internet Internet, introduction of product can be quickly worldwide, with little cost and no need to hire many new employees. For entry mode, vf should have a new subsidiary which is wholly owned. This subsidiary is established in the area of manufacturing, America, which is important for


vf. Vf just need for put the bike in any made in vf, vf outlets in various countries around the world. Vf also have to make an exhibition for introduce the newest of vf outdoor products. In the exhibtion bikes made in vf can be seen directly, and the visitors can see first the quality of vf made in bicycle. Vf also have to make something interesting, such as making posters in vf’s outlets that hot item today is bikes. Vf bike for reduce global warming. Vf also need for create ads and bilboard in the streets, especially in the Americas region where vf came. These things can provide information and draw attention to what and how the bike vf was. Staffing is one of the form of preparation of personnel management functions in an organization since the recruitment, development through effort in order to every staff to give maximum efficiency to organization. Staffing and organizine was closely related. Organizing is preparation of legal container to accomodate a variety of activities to be implemented in an organization, while the staffing associated with the implementation of the people who will assume their respective position within the organization. The steps of staffing : ● Identify the employment needs ● Registering of existing of labor ● Recruitment and selection ● Train and reward In this case, creating a new innovation and new product from vf, would require those killed in the art. For the problem of production and design of bicycle and all things associated with it, vf have to recriut new ones ( external recriutment ).


External recruitment, the use of employees who came from America, and outside the United States. Employees are placed according to their respective areas. As a first step in order to it becomes more efficient. For use of employees who came from America and then distributed to each branch is too keep competitiveness by standardizing structural and operational control in order to the production quality and operational performance of the unit maintained according to the wiil of the board of directors as a manufacturing strategy. Recruitment speacialize in this system in the recruitment designers, creative teams, who must have sufficient expertise. In making the branches ( the company or outlet ) require employees or workers. These branches will be placed in various countries. In order to save costs and make wage suppression, vf can use employees from the area where the branch is located. The policy also shows that the company is also concerned with the welfare of local residents ( where the branchs is located ) to provide employment oppurtunities and not only exploit local natural resources .

Payment Options VF will sell the line of bikes through The North Face Company. The North Face has an outstanding reputation and record with many vendors. For our payment options with those larger vendors we would suggest something like a 2/10 n/30. This means the buyer has the option of getting a 2% discount if they pay within 10 days of receiving the invoice from The North Face. If the buyer chooses to not pay within 10 days, the net amount is due in full within 30 days of receiving the invoice. This is a suggestion and the


current situation from The North Face to buyers may be similar. Most likely the buyer and seller would keep the same terms they currently have while just adding a new product to be delivered. Example of these buyers would be the large chains such as Dicks Sporting Goods, Sun and Ski, and Academy Sports & Outdoors. Other large global companies may have a long standing with The North Face too. Those companies would receive similar treatment. For smaller local bicycle shops around the globe, we would suggest a longer period for which a payment could be made. This would be appropriate if the small buyer could show a letter of credit or a good payment history with another company. The idea would be to let them have more time to sell the bicycles without the stress of having to pay soon. For those buyers that qualify, they would get 90 days after the invoice date to pay. We feel to adequately grow the bike line; the smaller companies could do wonders with the more specific bicycling enthusiasts. If the small buyer cannot provide the letter of credit or payment history, they would have 30 days from invoice date to pay. We would also give the smaller companies the benefit of the 2/10 n/30 discount. If they have the ability to make the payment early, they deserve the same discount. Lastly, the point of sale over the internet would be just like any other purchase online. The company could run sales online just like their normal website does and pay with a credit card. This would be a viable option for consumers to use and have the product delivered to their place of choice. This is the most basic of options and the easiest for collecting payment. Capital Working capital for a new line of bicycles should not be a problem for VF


Corporation. The company has more than enough working capital to support up to a five hundred million dollar proposal and still have plenty of leftover room. They currently have $1,521,912,000 in working capital. VF also has $1,081,371 worth of cash currently on hand according to the company’s 2011 annual 10-k report. The company is in a very sound position to allow for more products. The company is well diversified in within its current clothing and apparel market. The outdoor clothing and activity line is the fastest growing sector of their line. The star of the outdoor gear and apparel is without a doubt The North Face. We believe that The North Face would be a great product line for bikes. The company is already at the top of mountain biking gear and apparel. A bike line within one of VF Corps companies is an excellent addition and shouldn’t take up a very large percentage of the company’s current 1.5 billion dollars of working capital. VF Corporation should use their own source of funds already available to them and not seek additional funds for this project. We see no current challenges for this line from a capital standpoint. The company recently took on a significant amount of debt from 2010 to 2011. VF Corp appears to have expanded some areas and chose to take on new debt to accomplish this. The company information suggests they feel better about not using up there working capital. If the company currently prefers taking on more debt to finance the purchasing of more assets and expansion, it may not be a bad idea. The amount of the expansion we are suggesting wouldn’t deem that necessary, but it is always and option. We still feel the company should use internal funds for the bike line suggested. Additional Thoughts We do feel that entering into this market may be difficult. The bicycle industry


doesnâ&#x20AC;&#x2122;t really have a main company dominating the sales, but we will have to gain market share through product differentiation. The brand name of The North Face once again should help in this area. Pricing may also be an issue. The North Face company is a higher end apparel company and due to the current economy, this could be an issue. The North Face Company is such a recognizable name in the outdoor apparel and gear world, that we feel a bike line will be a great addition to the companyâ&#x20AC;&#x2122;s already stellar reputation. We do think the global economy could play a major part in the selling of this product line. The global economy is a recovering state and funds for recreation, such as mountain biking, may be a little low. The inability of some to spend their discretionary income on our products could hurt the initial growth of the product. As the economy grows, the ability of consumers to spend excess funds on hobbies, will fuel the growth along with the reputation of The North Face brand. The same economic recovery may also help our more traditional bicycle sales. The rising fuel costs and general expensiveness of purchasing and maintaining a vehicle make the bicycle a viable option for consumers to save money. This occurrence, coupled with the ever importance of staying healthy could help the growth of the product line. In the United States and other developed countries, obesity and general health issues are on the rise. The bicycle is an excellent option for fitness and exercise. Overall, we feel very good that in the next five to ten years, that The North Face bicycle line will be very well established in the sports and outdoors industry.

http://www.prweb.com/releases/bicycles_adult/mountain_electric_bikes/


prweb4515734.htm http://www.bikeleague.org/media/facts/#americans http://www.about-bicycles.com/Bike-Articles/most-popular-bike-brands.html http://www.worldometers.info/bicycles/ www.marketingteachers.com www.scribd.com


Team # 101 Client: Walt Disney Company (Disney) Product/Service: We are recommending that Disney create a new business line of Art Academies. This business line would not only provide a new revenue stream but also provide a new customer base for its established businesses. In areas where its established businesses are not present, the new business line provides additional opportunities for Disney branding and image recognition. Number of pages, including title page: 22 Team members:

Name

Country

Robert Salerno C.

USA-IL

Rick Jackson

USA-OK

Karen Natalia Forero Colombia Ruiz

Linas Bernatonis

Lithuania

Mathew Forris

USA-NC

Nurul Azni Febianti

Indonesia

Did Not Participate


Table of Contents

1

Business Proposal Summary

2

Art Academy(Product/Service)

3

Target Market

4

Production Site

5

Consumer Segment

6

Entry Mode(s)

7

Staffing

10

Marketing

12

Payment Arrangements

13

Capital & Financing

15

Likely Challenges

14

Appendices â&#x20AC;&#x201C; A (Walt Disney Information)

17

References

21


Summary We are recommending that Disney develop a line of Art Academies targeted at 3 to 10 year old children. We believe that this new business line fits into Disney’s existing portfolio of businesses. In addition it enhances the customer base of established business while also providing branding and image recognition in areas where existing businesses may not yet exist. The Art Academies would rely heavily on Disney’s existing visual arts professionals and closely mirror Disney’s long established animated graphics. The new business line may be utilized in a number of ways to provide synergies to the existing businesses such as focus groups and marketing test groups.

2


OUR BUSINESS IDEA (Product/Service) General concept: A Disney-based Art Academy for 3 to 10 year-old kids. Development of the idea The early years of education are of great importance, because it gives the tools to facilitate the approach to the analysis of reality and introduces the child to have a rational, like the formation of habits, skills and attitudes Disney is a company focused on broadcast entertainment, they ensure that imagination goes hand in hand with learning, animated characters and stories are a tool to enter a different learning style, where the child enjoys going to school, for so the idea is the physical construction of an academy with an artistic approach, for children ages 3 to 10 years, where the child can learn while they enjoy. Curriculum Disney art academy offer: 1.

Drawing

2.

Painting

3.

Cartoon

4.

Design

5.

Music

6.

Theatre

7.

Dance

Turn strengthens the learning areas that currently manages the company through junior Disney, which are important in the development of children, these are: Social area, area of thought, imagination and area of expression, ethics area , area of daily living, motor area.

3


It is important to know that the child can attend the academy with a daily intensity, or have the option to assist in holidays. We believe that given Disneyâ&#x20AC;&#x2122;s solid reputation for quality, visual arts, focus on children and family entertainment that this new business line will be in high demand. Target Market and Segmentation of the Market Having regard to existing level of acceptance of the Disney concept, we choose the primary target regions of South America, North America, Europe and Asia. The consumer segment is used to determine how Disney will provide their services of child art education, in varying countries, which all have different customs and cultural boundaries. It will be best for Disney to choose the multinational strategy for adapting to the set boundaries of these different customs and cultures. On a more corporate level, using the differentiation strategy, will be the task of designing a Art Academy that is overall globally structured the same, but perceived as unique to the individuals in different countries. Disney already has done this with their clothing and accessories department. America may buy clothing from Disney, but in China, there are more restrictions on how one can market towards children and how these goods and services can culturally affect and influence them (The Disney Company, 2012). Another boundary that must be met is building the trust between the parents and Disney being involved in periodically taking care of their children. On the department level, building the trust will be most important to establish. When it comes to trust, the customers have assumptions towards any company that they demand goods and services from (Asherman & Bing & Laroche, 2012). Disney has the assumption of having a high standard in child care and interest, with Disney first being a family oriented entertainment company. It will be easier for Disney to establish a reputation for offering

4


education, because they have relative experience with appealing to children and making the parents feel comfortable with a company marketing towards their children (The Disney Company, 2012). Production Site and Personnel Location When proposing to the Disney Corporation for opening a chain of children’s Art Academies, the production site and personnel location is an important aspect to take into consider. There are many steps to take, when considering the production site, and they are identifying the basic appeal, access the national business environment, measuring the marker or site potential, and select the site. The first step is to determine the basic appeal of the service that will be offered from Disney. Art instruction is a specialty service for families that normally have children of the ages of 3 - 15, and after school daycare services provided by elementary school facilities. These services are normally marketed towards families of middle class wealth, because it is typically a private service provided by private companies. Childcare in America will cost on average of $8,800 a year, and range from $4,460 to $13,185 a year, based on location from low to high income living areas (“How Much Will You Spend On Childcare,” 2011). For Disney to locate their proposed art instruction centers, the wealth of the proposed areas will need to have disposable income of at least $5,000 to make a profit (“How Much Will You Spend On Childcare,” 2011). In America many art academies are privately owned business, so locating to the suburbs of cities, with high standard of education and safety will be most appealing to locate a Disney Art Academy (The Disney Company, 2012). In many other countries, it would be most logical to place art academies where many are already located and the people are familiar with the Disney corporation. Europe, Canada, Japan, America, Australia, and developed regions of

5


China are all profitable regions that would host customers that have disposable income to spend on their children (“Intergenerational Income Mobility,” 2011). These regions are developed with cultural and political stability, have high speed internet and media access, and high income employment. Consumer Segment The second step is to be able to access the national business environment of these different countries. From cultural forces to political forces of the difference countries will cause various differences in the practices of the academies. For example, in European counties, many government agencies are babysitters, instead of instructional facilities. To open a art academy in Europe, Disney will have to make a partnership with the local government, because most of the citizens that live in Europe countries will have trust in the socialist government being involved in their personal life. Another aspect to consider if these countries are developed enough to support a multi-national conglomerate. These developing countries have abundant resources for the logistics of supplying instructional facilities. America has the resources to supply Disney’s amusement parks that require large quantities of supply, from natural resources to the supplying of production of Disney brand goods. Now that we have selected the possible locations for opening these art academies, now it's time to measure the market and site potential of the consumers. The income elasticity of the country will determine how the selected countries will react to the change in the quantity and quality of the service provided. For example, Denmark will not be affected by the change in prices of the child instructional services, compared to the high income level of Denmark. Denmark has a 0.15 percent income-elasticity, where the U.K. has a 0.50 percent income-elasticity (“Intergenerational Income

6


Mobility,” 2011). The U.K. would not be as profitable for placing private instructional facilities sponsored by Disney. The last step to determining the best locations for placing the art academies would include actual trips to the countries and regions. With Disney corporate located in California, America will be ideal for locating chains of art academies. Europe also has as park and resort, meaning Disney already has idea of expansion and financial interest in Europe. It is also been said the Disney may consider opening a new resort in Shanghai, China. This means, China will have even more familiarity with the Disney name and its services (Epstein, 2009). The Florida resort brings in 45 million annual visitors, and opening a resort in China is expected to generate 50 percents of Disney’s international annual profits. As of right now, international sales represent 25 percent of Disney's annual revenue (Epstein, 2009). Overall these developing nations show prospects for placing Disney Art Academies, because of their growing populations, purchasing power index, familiarity with the Disney Company, and ability to stain high wealth income distribution. How is that to be done? We believe, that the idea can be successful by a combination of either Wholly Owned Subsidiaries or if handled under a Franchise/License model. Further discussion of franchising and wholly owned subsidiaries is covered in the “Entry Mode” section. Entry Mode – Three Phased Approach The consulting team recommends a three phase approach to entry modes for the new business line. 1.

Phase I – Wholly Owned Subsidiaries generally of a Greenfield

approach and/or options for Franchises/Licenses. Location adjacent to existing facilities.

7


2.

Phase II - Wholly Owned Subsidiaries generally of a Greenfield

approach and/or options for Franchises/Licenses. Location in areas of highest target-market results but not necessarily in regions of existing assets. 3.

Phase III â&#x20AC;&#x201C; Primarily Options for Joint Ventures, Franchising

and/or Licensing. Location in areas of high target-market results. Due to the results of our market analysis, it is the recommendation of the Team that Disneyâ&#x20AC;&#x2122;s initial entry mode for Phase I and Phase II be either wholly owned subsidiaries of a greenfield mode or options for Franchises/Licenses. We recommend that Disney establish Phase 1 businesses in locations adjacent, or as close as practical, to its existing locations that achieve the highest results from the target market analysis. We believe that the increased costs and risk associated with wholly owned subsidiaries will be offset by the fact that Disney already has extensive knowledge and capabilities available to the Phase 1 start-up locations. Once successful in Phase I, this strategic knowledge and capability can be tapped to staff the Phase II start-ups. Additionally wholly owned subsidiaries will allow Disney to exert full oversight and control throughout the business start-up and early operations period. We believe this strategy will allow for synergies to exist between the Disney business lines and provide advantages to the start-up that would not otherwise be available. Franchising provides benefits for both seller and buyer. For franchisors, the primary benefit is the ability to use other people's money to expand the brand more rapidly than they could either on their own or through investors or lenders. The initial franchise fee and ongoing royalties they collect allow franchisors to build their brand without sacrificing control to outsiders or the pressure of repaying lenders. The fees and royalties are used to fund operations at corporate headquarters, train and support

8


franchisees, market and advertise the brand, improve the quality of goods or services, and build the brand in the marketplace. For franchisees, benefits include: a higher chance of success than in a sole proprietorship; shorter time to opening; initial training and ongoing support; assistance in finding an optimal site; the selling power of a known brand; lower costs through group purchasing; use of an established business model; national and regional advertising campaigns; customer lead generation through websites and centralized call centers; and a network of peers (fellow franchisees) to provide advice and moral support through a company intranet, annual conferences, and franchisee associations; and, increasingly, assistance with securing funding. (Goldberg, 2012) Once the Phase 1 business line is successful in its own right, the second phase of start-ups will focus more on locations that are driven solely on target-market analysis results that may not necessarily be in close proximity to existing business lines. Although the greenfield mode is recommended, in cases where Disney may have existing assets that fit the requirements of the new business line, it is certainly understood that brownfield may be the method of choice in those situations. Focusing first on market regions where Disney already has a substantial presence allows for Disney to utilize the existing human resources and infrastructure. It is anticipated that the knowledge and expertise necessary for initial staffing of Phase II businesses will come from successful Phase I businesses (see recommendations in â&#x20AC;&#x153;Staffingâ&#x20AC;?). Phase 3 start-ups, if initiated, would provide Disney with the option of utilizing joint ventures, franchising or licensing to interested partners or entrepreneurs. The brand would be well established in Phase 1 & II allowing some flexibility relative to operating control. In addition franchising and/or licensing would reduce parent costs and entry risk involved with less than the highest target market regions. Contractual conditions

9


would be necessary to assure certain Disney requirements were maintained by the entrepreneur or partner. If necessary these contractual obligations may be utilized to provide entrepreneurs or partners access to certain Disney trademarks, patents and/or intellectual property required to market and operate the business. We also recommend that Phase 3 agreements include non-compete clauses that extend for a reasonable period beyond the termination of the agreement. We believe this three phased approach to market entry provides Disney and its stakeholders with the greatest opportunity for success, while at the same time minimizing risks associated with a new business line. This strategy permits the initial start-ups to have the greatest level of success, as well as developing the foundation and fundamentals to drive the success of the follow-on businesses. Staffing Developing the right management team and support staff for the new artacademy business line will be instrumental in the success of the venture. We recommend that Disney immediately begin a talent search with the objective of employing an initial start-up team comprised of a core group of experts in the fields necessary to oversee the initial development and commissioning of all Phase 1 & II businesses. This team would consist of individuals with proven backgrounds in the fields of new business development, marketing, human resources, IT and visual arts. In addition the core team should include educational administrators with management experience in successful related businesses. This start-up team would work closely with Disneyâ&#x20AC;&#x2122;s existing management team and other professionals to develop the initial business plan. The start-up team would also be responsible for developing the organizational structure and staffing at the facilities. Existing Disney employees will be capable of

10


staffing numerous positions within the Phase 1 businesses. The final level of resource blending between existing businesses and the new venture in Phase 1 business will be determined by the start-up team. Utilizing existing resources for staffing should play a significant role in establishing Disney’s work cultures into the new business line. It is expected that Disney’s existing visual arts professionals will contribute to the training and development of the art-academies instructors and curriculum. It is suggested that key positions be identified within the organizational structure where utilizing existing Disney personnel would be the most beneficial and in some cases even a requirement to do so. It is also important to identify the critical staffing functions and to have these positions filled as early in the process as possible to avoid impacting the success of the business. The start-up team should also be mindful that it will be necessary for these initial businesses to provide expatriate staffing support to Phase II business for positions critical to the organization. The processes and requirements for staffing Phase II businesses are somewhat different from Phase 1 largely due to the unavailability of existing Disney resources in those regions. Phase II staffing may require the use of home-country nationals (expats) in key positions should the location be such that no Disney facility exists within the selected country. The success of the business is the primary goal of utilizing expats. We believe expats accomplish this by providing the foundation structure from their experience within the Phase 1 businesses in addition to their knowledge of the Disney “brand” as well as establishing the necessary Disney work “culture” to the new business. Depending on the cultural/political environment, Disney may elect to transition from expats to host-country nationals at some point after the business has accomplished successful operations.

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As part of the agreements associated with the Phase III business, we recommend that contractual terms dictate key requirements of how the entrepreneur or partner organizes the business. Disney should establish minimum staffing levels and/or that key positions be appropriately staffed. Disney may want to provide options to maintain some level of oversight in the development stage of Phase III business. This could be for a short period of time and possibly by utilizing the initial start-up team to assist. We believe that staffing the business is one of the most important decisions that Disney will make. Although overall staffing levels will to some degree be impacted by financial considerations, we want to again mention the importance of utilizing available and/or existing Disney talent for key positions as this is crucial to the success of many aspects of the new business line. In addition there are numerous consulting and talent search entities available that Disney may want to utilize with respect to staffing the new businesses. It is also important to note that the human resources capabilities for each business will need to be cognizant of the cultural and labor requirements of the respective region prior to staffing. Marketing First thing first we should analyze the external and internal environments. The internal analysis indicate all the resources needed such as the human resources, capital investment, tools needed, technology development and all the things that we should consider inside of the company. And the external analysis indicates all the factors outside Disney like politic and regulation, economic, social and technology. Marketing our product will be different in every region. We have to consider what are the regulations that we should obey, what are the economic condition in that country that will absolutely effect us into setting our price. And the development of technology that will affect how we communicate and deliver our product to the

12


customers. Also we have to be careful in evaluating the social and culture condition, because different countries consist of different religion and different values. So in promoting our product the communication strategy will be different in each country. Then after we analyze the external and internal environments we will develop the marketing strategy which is first setting the product and services that we would offer. After the analysis is completed we would be capable of setting a proper price. The pricing for our service depends to a large degree on what the client wants, as we will provide a range of possible services from part time to full time. And then evaluate on how we will distribute it. Since our product would be an art academy program by Disney, we would be able to distribute our promotional and services information, how to apply for it and what enrollment requirements needed to all Disneyland in order to deploy the art academy program. Which are at Disneyland Anaheim, Anaheim (California), Disneyland Florida, Lake Buena Vista (Florida), Disneyland Resort Paris, Paris (France), Hong Kong Disneyland, Hong Kong (China) and Tokyo Disney Resort, Japan. And then the final strategy is promotion. Since our product would be child oriented, the creative and fun learning for kids, we would promote our product with flyers and poster spreading in the Disney park and then commercials, billboards, internet ads, and privately promote it to the potential kindergarten and elementary schools around the Disneyland and/or new business area. Payment Arrangements We do not anticipate that Disney would need to make any significant changes to how they currently handle payment terms with local retailers, distributors or other providers. Disney has enough business established to manage those payments issues

13


without making changes there for the new business line. We do contemplate that the primary customers for the art academy services may require differing payment terms than Disneyâ&#x20AC;&#x2122;s typical customers of its existing entertainment businesses. Customers that prefer long term arrangements for their children may want to have some type of financing available to them. Disney may also want to consider establishing a service that explores available financial assistance for customers. Depending on the location there may be any number of governmental programs available for educational assistance to program of this nature.

Likely Challenges As we know the most famous and most visited theme parks in the world belong to the Disney family. Disneyland is a well known theme park all over the world and already expanding in various countries like Japan, Cina and France. The biggest difficulties are the competitors. We think that our biggest competitor is Universal Studios, Six Flags and Cedar Point. For example in California, the competition in California is tight because in California besides Disneyland, there are also other theme parks like Universal Studios, Knotts Berry Farm and Magic Mountain Six Flags. Therefore to overcome this competition we should set an integrated marketing strategy to maintain the competitive advantage. The competitive advantage is first differentiation, so we have to analyze what is our product/service superiority that the competitors donâ&#x20AC;&#x2122;t have. Then we set the low cost leadership, what can we do to set the lower price than the competitor in order to be the market preference in the price category.

14


Capital In this part we will discuss if Disney should invest in art-academy from its own cash or if they should use some kind of external funding sources. Also we will talk of possible investment sources if the art-academy will need more funding for expansion. There are few places where companies can get funding for this type of business start up. Disney may choose to put together a project Performa for the new art academies as a whole or on a individual business by business perspective. With this Performa they can explore the debt markets where banks and financial companies are lending. Disney may prefer to present the Performa to specific investors or venture capitalist they have previously used or identified. We recommend that regardless of whether the new business line is bundled as one project, or financed as many individual new businesses, Disney should utilize non-recourse debt so as to not jeopardize the parent company should the new venture endure financial difficulties. Financing that is non-recourse to the parent company would serve to mitigate the inherent risk involved with a new business line such as this. As Disney is a company which has huge capital, another way of potential financing is to use its own funds from past earnings. For starting a new project like an art-academy, Disney wouldnâ&#x20AC;&#x2122;t necessarily need funding from external sources. In the first steps of the project Disney may opt to fund it from its own cash. Once the new business line is established, Disney may then utilize a portion of that investment as the equity to attract more favorable financing for the remaining venture. Should Disney get money from external sources (e.g., loan from bank) and this project will fail, for company it will cost more without non-recourse terms. In addition, as Disney is a publicly owned company, problems from a new business line that negatively impact Disneyâ&#x20AC;&#x2122;s financials or image will impact all Disney stakeholders.

15


Nevertheless if this new business line succeeds and if it will need more capital for expansion, Disney should seek external funding. Since this project involves the education of children, Disney can write project and try to get money from local government. We have to admit that getting money from government is typically very hard and it has very small opportunity to succeed. If government won't give money, Disney should try to attract investors or even consider issuing additional stock. Of course it can be that investors won't give such amount of money which is needed for expansion. In this case the most realistic option for getting funds is to take loan from bank. In this way money is not for project start-up but for expansion, so bank should see that giving money is not that risky and interest rate should be smaller. Since this company has very strong points like well known brand name and good financial results it should be easy to attract capital from investors.

16


Appendix A â&#x20AC;&#x201C; Walt Disney World

WALT DISNEY WORLD Disney is a company based on innovation and constant growth, its objective is to transmit happiness through amusement and entertainment. This company has a creative business model which is appealing to children, adolescents and adults on the other hand, its unrivalled customer service and its concerns in relation to staff training positions Disney as the leader in the entertainment industry.

ABOUT DISNEY Since its founding in 1923, The Walt Disney Company and its affiliated companies have remained faithful to their commitment to produce unparalleled entrainment experiences based on the rich legacy of quality creative content and exceptional storytelling. The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products. (World, 2011) . The Walt Disney Company incorporates best-in-class business standards as a key pillar of its business practices. Business Standards and Ethics Training Compliance training, including the Company's Standards of Business Conduct and ethics, is provided to employees and Cast Members worldwide through the Company's learning management system known as Disney Development Connection. It is the Company's intent,

17


through its compliance training, to ensure that all of its employees and Cast Members have the knowledge and training to act ethically and legally, in compliance with the Company's Standards of Business Conduct. Hiring Practices It is the policy of The Walt Disney Company to provide equal opportunity for all employees and applicants for employment without regard to race, religion, color, sex, sexual orientation, national origin, age, marital status, covered veteran status, mental or physical disability, pregnancy, or any other basis prohibited by state or federal law. Human Resources The Walt Disney Company's employees and cast members are essential to fulfilling our business goals. Our mission is to drive the people dimension of our business, consistent with Disney's culture and values. Click here for more information. Harassment Prevention and Discrimination Policies The Walt Disney Company's policy prohibits employees from harassing any other employee, guest or other person in the course of the company's business for any reason prohibited by law, including, but not limited to, race, religion, color, sex, sexual orientation, national origin, age, marital status, covered veteran status, mental or physical disability, pregnancy, or any other basis prohibited by state or federal law. (World, 2011). Principal Objective The Walt Disney Company's objective is to be one of the world's leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products. The company's primary financial goals are to maximize

18


earnings and cash flow, and to allocate capital toward growth initiatives that will drive long-term shareholder value. (World, 2011). Disney Businesses The Walt Disney Studios: For more than 85 years, The Walt Disney Studios has redefined the boundaries of creative excellence with world-class entertainment. Today, through movies, music and stage plays. Disney Parks: containing some of the world's most recognized and popular vacation destinations, Walt Disney Parks and Resorts is a global family of theme parks, resorts, restaurants, hotels, cruise ships and water parks. Consumer products: Disney Consumer Products is the world's largest licensor of intellectual property and the world's largest publisher of children's books and magazines. Disney Interactive media group: Disney Interactive Media Group brings the best Disney content to fans, whenever and wherever they want it, through numerous interactive media platforms. Disney ABC television group: The Disney / ABC Television Group is one of today's premier media entertainment companies; combining high-quality content with the strategic use of technology to deliver compelling news and entertainment viewing experiences to hundreds of millions of people around the world. ESPN: Some 30 years ago, ESPN launched the first sports network, televising complete sports coverage. Today, actually Disney is a leader in multimedia sports entertainment with over 50 business assets, televising 65 sports in 16 languages in more than 200 countries. MARVEL: Marvel has engaged imaginations worldwide with iconic innovative characters, groundbreaking storytelling and successful business ventures for more than 70 years.

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Today, Disney is the #1 comic publishers in the world, as well as a leader in the movie, consumer products, digital and television industries. (World D. , 2011).

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References Goldberg, E. (2012). Franchising.com. Recuperado el 15 de 04 de 2012, de Franchising.com: http://www.franchising.com/howtofranchiseguide/benefits_of_the_franchise_model.html World, D. (2011). Disney World. Recuperado el 08 de 04 de 2012, de http://disneycareers.com/en/career-areas/corporate/administrative/ World, W. D. (2011). Walt Disney World. Recuperado el 08 de 04 de 2012, de Walt Disney World: http://corporate.disney.go.com/corporate/overview.html The BabyCenter. (2011). How Much Youâ&#x20AC;&#x2122;ll Spend On Childcare. Retrieved on April 15, 2013, http://www.babycenter.com/0_how-much-youll-spend-on-childcare_1199776.bc The Conference Board of Canada Insight You Can Count On. (2012). International Income Mobility. Retrieved on April 15, 2012, http://www.conferenceboard.ca/hcp/

details/

society/intergenerational-income-mobility.aspx Lita Esptein. (2009). Disney Looks to China foe International Growth. American On Line: DailyFinance. Retrieved from http://www.dailyfinance.com Ira Asherman, John W. Bing, Ed.D., and Lionel Laroche, Ph.D. (2012). Building Trust Across Cultural Boundaries. ITAP International: Building Human Capability - Globally. Retrieved from http://www.itapintl.com

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The Disney Corporation is a site that presents the full text of many essential works in the literature of Disney daycare business proposal (http://corporate.disney.go.com/) HubPages. How Companies Can Increase Share Capital and Equity? Retrieved on April 23, 2012, http://techmost.hubpages.com/hub/companies-increase-share-capital MyBusiness. Seven ways to raise capital (2011). Retrieved on April 23, 2012, http://www.mybusiness.com.au/finance/seven-ways-to-raise-capital Capital market Alerts. What now? Where can I get capital? (2011). Retrieved on April 23, 2012, http://capitalmarketalerts.com/what-now-where-can-i-get-capital/ Caribbean Community (CARICOM) Secretariat. How does a company raise capital? Retrieved on April 23, 2012, http://www.caricom.org/jsp/community/regional_issues/company_raise_v2.jsp?menu=communit y

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Team # __214__ Client (Company): McDonald's Corporation Product/Service (a brief description, 3-10 lines): Introducing McCuisine, an international variety of food to be offered to the highest grossing McDonald’s outlet in the United States. The purpose aligns with the goal of McDonald’s itself to promote better quality of food that impacts less negativity on the health of consumers and at the same time celebrating McDonald’s as a successful global fast food outlet.

Number of pages, including title page:

Name

Country

Shahrukh Khan

UAE

Yeow Yee Lin

Malaysia

Mikel Binnix

USA- NC

Salazar Muñoz Marcela

Colombia

Gisela Alejandra Freire Demera Aditio Nurahmat

Spain Indonesia

0

Did Not Participate (Please make a note if this teammate did not contribute during the project, has not replied to emails, etc.).


Table of Contents Page Number Executive Summary

2

Introduction

3

New Product Description

4

Target Market

6

Consumer Segment

9

Production site or service personnel location

10

Entry Mode

11

Staffing

12

Marketing

13

Payment Arrangements

17

Likely Challenges

19

Conclusion

20

References

21

1


Executive Summary This report is a business proposal to McDonald’s from our team to enter a new market. The idea is to provide the existing McDonald’s customers with a fine-dining experience; moving away from the existing fast-food culture that McDonald’s possesses. The menu of this Cuisine (named McCuisine), will have a broader menu of items – and will have food from different parts of the worl

2


Introduction McDonald’s is one of the world’s largest fast-food chains, which currently operates in 119 countries. It is mainly known for its ‘fast-food’ nature (i.e. for Burgers, Fries, Cola etc.), and more-or-less, everyone has loved it over the years. As the times have progressed, McDonald’s has touched more and more lives every day. Along with offering quality food, McDonald’s has also created history along its successful journey to-date. It was in 1940, when two brothers – Dick and Mac McDonald started a ‘hot-dog stand’ in California. Later, after establishing a proper restaurant, they started to serve around 24 items – mostly barbequed. This relatively small restaurant became a popular hangout spot for many young teenagers, and also many adults. Later, in 1948, Dick and Mac McDonald introduced “McDonald’s” in San Bernardino, California (also known as the oldest McDonald’s currently) - and since then it has only grown and never looked back. Initially, McDonald’s only served hamburgers, milk-shakes and their popular French Fries. Soon after their introduction in the market, McDonald’s started to change the culture of ‘fast-food’ products. In 1949, McDonald’s replaced potato chips with ‘French Fries’ and the consumers liked and accepted this new and fresh idea. Moreover, in 1968, McDonald’s gave us products like ‘Big Mac’ and ‘Hot Apple Pie’ which are still popular among the consumers. While in 1988, “Fortune Magazine named McDonald’s hamburgers among the 100 products America best makes” (McDonalds, 2012). However, over the years the fast-food chain has faced a lot of criticism for the products it offers. It was said that the burgers that the company produces are not ‘healthy’. Of course, with a customer base of 68 million in 119 countries, it’s hard to keep everyone happy. It was alleged that the use of popular toys encourages children to eat more McDonald's food,

3


therefore contributing to rise in obesity of children (Katz, 2010). However, offering toys with a ‘Kids Meal’ is one part of a fun, family experience at McDonald’s. Additionally, McDonald’s has added more healthy choices in its menu (like Salads, sandwiches etc.) and in 2008, switched to using cooking oil that contains no trans-fat, in order to make their food healthier and more accepting by its consumers. New Product Description McDonald’s has tackled every obstacle in an appropriate manner. Now, it’s time to take the brand to the next level. McDonald’s should now diversify its operations and enter the ‘cuisine’ sector too. The food chain has done well in the international market and has created a good brand image. So, why not create a McDonald’s cuisine? This can be the next “big” idea that would help the food chain to enter into a whole new market. Along with serving its traditional burgers, the line that comes under “McCuisine” would include AsianMc, EuropeanMc and SouthAmericanMc thus, attracting more foodies to McDonald’s. Refer to the tables below for the menu under each cuisine. herbal soup (China)

Boiled lotus root soup with chicken

spiced fried chicken (India)

Chicken marinated in Indian spices, and curry powder before frying Peking duck served with oyster sauce

peking duck (Hong Kong)

Table 1: AsianMc Cupcakes (Germany) French Sandwich (France) Meatball Delight (Italian)

Mini cupcakes with 3 different flavours (Strawberry, French Vanilla and Chocolate) Bacon, crème fraiche, blue cheese, and onions stuffed in a roll Pasta with meatballs, tossed with parmesan cheese Table 2: EuropeanMc

4


Whopper Criollo (Argentina) Fajita Burito (Mexico)

Flame grilled beef patty topped with salsa sause, provolone cheese, lectuce, and onions Chimichurri sauce, beans and rice, lamb pieces and jalapeno all wrapped in a grilled tortilla Table 3: SouthAmericanMc

McDonald’s, as a brand, has a good image in the market. Consequently, it won’t take much time for them to penetrate into the ‘cuisine’ market, where it will have to compete with others. Over the years, McDonald’s has marketed itself in an ethical and appropriate manner. People are well aware about the menu of McDonald’s and usually order the same thing whenever they visit. It’s time to bring a little change in how people look at McDonald’s. By introducing “McCusine”, not only the regular customers of McDonald’s, but other foodies will have more options to choose from. Many people like to try to new dishes and know the taste of it. But with the McDonald’s name on the table, people will have a certain element of confidence in regard to quality food/service, cleanliness, and value for money in their mind – they would surely want to try it out. McDonald’s has always taken pride in serving its customers with quality, service, cleanliness and value (QSCV) each and every time, so the goal of the company will remain the same.

5


Target Market The first step to target marketing is market segmentation. With the introduction of the new product in McDonald’s, the market will be geographically segmented. A new product in McDonald’s is not easily introduced to the consumer market because pioneer products such as Big Macs and Chicken McNuggets will always be synonymous with McDonald’s. Most often many new products introduced by McDonald’s would stay in the shadows of these pioneer products and might also be discontinued due to the lack of favourability. Therefore to withstand the unpredictable consumer market, McDonald’s Oak Brook, Illinois would be the best geographical segment and target market since they are the number one McDonald’s chain in the United States, grossing US$ 32.4 billion (The Daily Meal, 2012). In fact, the headquarters of the US McDonald’s is located in Oak Brook. They can afford to test the consumer market with the new products proposed and to test the likeability of the food before they expand it to other McDonald’s chains. To prove that the segmentation is effective, the segment itself must be measureable and substantial so that the size and growth segment of the chosen state is large enough to contribute to the purchasing power in turn, increasing the sales and profitability. The population in Illinois as of the year ending 2011 was 12,869,257 people according to the US census (2012). As Illinois is a well-developed state in terms of transportation, economy, science and technology and many more, this segment is easily accessible to the locals and also to those who are living in other states. Therefore, anyone living in Illinois or any other areas nearby would have no problem in accessing the targeted McDonald’s chain. Even if the segment is structurally attractive and has a substantial growth size, the objectives of McDonald’s must also be aligned with the products they come up with. One of McDonald’s reputation objectives is to not only be perceived as a healthy restaurant, but to

6


also offer alternative meals to their consumers (Ucallit, 2011). The proposed product of McCuisine hits right on their company objectives. Impact from the change in focus will generate positive relationship between existing customers as well as attracting potential customers who once turned away from unhealthy fast food. It is reported that Illinois is ranked 4th for the childhood obesity in the whole of the United States (Food Revolution, n. d). The number of fast food competitors in Oak Brook is quite low and by offering some difference in the product McDonald’s would offer, there is much more of the competitive edge. Direct competitors such as Subway, Church’s Chicken, Wendy’s and Burger King are often one dimensional in the products they are offering to the consumers for example; Subway and sandwiches, Church’s Chicken and chicken burgers and fried chicken, Burger King and all kinds of burgers. Through this strategy of product differentiation and the effective segmentation, McCuisine is predicted to deliver well in the eyes of consumers. By introducing McCuisine, McDonald’s would still remain serving in the undifferentiated marketing; selling to the general public without differentiating one with another such as gender, age, and income level. Assuming that the market is homogenous, the advantages would be the decrease in cost of planning different marketing strategies for different target markets. So, since everyone is the same and everyone is a potential consumer, McDonald’s do not have to worry about customer relationship management because if they lose one customer, they can easily gain another. After establishing the right location, McDonald’s would then have to position the new product in the minds of consumers. This is done by ‘selling’ McCuisine promoting the differences and competitive edges. Product and image differentiation applies to the new products proposed. As mentioned, McCuisine is very different from other products that the competitors of McDonald’s are offering. In terms of the image differentiation, McDonald’s

7


would be elevated to a higher standard in the fast food industry as promoting healthy food is now the main concern. Another way to differentiate the image of fast food restaurants is to redecorate the McDonaldâ&#x20AC;&#x2122;s outlets by sectioning it and giving a continental theme to each section to coordinate with the introduction of McCuisine. By doing this also, McDonaldâ&#x20AC;&#x2122;s can celebrate on being the generic name for fast food all over the world.

8


Consumer Segment McDonald's is one of the largest fast food company in the world, It is more than 31,000 restaurant worldwide now serve 47 million customer each day, racking up sales of more than $50 billion annually. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion. The main consumer segment is people in Oak Brook, Illinois where consumers from all demographics, family background and culture can dine at McDonaldâ&#x20AC;&#x2122;s. U.S. is chosen as the consumer segment because maybe America is the country's largest fast food lovers in the world. Accordingly, creating a new product extension for McDonald's which is McCuisine fits right into the segment. McCuisine can provide the company with a view of difference like no other fast food chain has ever ventured. McCuisine is expected to fulfil the wants of Americans who craves fast food but also wants to be healthy at the same time. As fast food and health goes against one another, McDonaldâ&#x20AC;&#x2122;s would prove that it is not just a vision but a reality coming to spread for the better.

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Production site or service personnel location This new product/service should be offered at new restaurant locations designed specifically for this type of dining environment and target market. It should be offered at restaurants dedicated only to serving this particular kind of cuisine as it is different from the typical items that are offered at current McDonald's restaurants. The first restaurants offering this new type of cuisine should be located in the United States because the United States is where McDonalds originated and is also the target market that McDonald's has the most knowledge about thus making it easiest to succeed. After the restaurants in these locations are successful then branching out into other countries should be considered and pursued. McDonald’s has a long history of serving food with the highest quality ingredients that they can find. They have recently advertised this in their “what we are made of” ad campaign. This campaign was made up of advertisements putting emphasis on the type of ingredients that McDonald’s uses and where they get them from. They put a lot of emphasis on how fresh the ingredients are and the fact that all the beef used is USDA grade A 100% beef. McDonald’s currently gets their food from distributors such as Golden State Foods who make deliveries twice a week to most restaurants. For the McCuisine restaurants the truck will make deliveries three to four times per week to ensure that the quality of the food is even higher and fresher than the ingredients and food that is currently offered at traditional McDonald’s restaurants. This will help establish the new McCuisine restaurants as one of the top of the line restaurants in this type of food market as it has done so well in the fast food industry.

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Entry Mode McDonald’s around the globe is a franchise and in Oak Brook itself, lies the headquarters of McDonald’s and a few more franchises. Therefore the entry mode to penetrate the market has already started long ago. The challenge is to bring in Mc Cuisine to all McDonalds in Oak Brook. McDonald’s could succeed with the help of Chef Jamie Oliver from the UK because he knows his food palette very well. Also, he has been involved with the Food Revolution program all around the US, creating awareness on healthy eating and obesity. As quoted from Jamie Oliver himself (2012), “My charity aims to inspire people to reconnect with food. It's all about raising awareness and individual responsibility, resuscitating dying food culture around the world and, ultimately, keeping cooking skills alive”. Since his effort, Jamie Oliver has been supported by almost all of the Americans. This opportunity should be taken as McDonald’s can collaborate with Jamie to formulate a outstanding menu based on his simple cooking skills and experience. This is an advantage for McDonald’s as they are one of the largest food chain in US and also globally and with Jamie Oliver’s name as part of the corporation, customers are aware that they are in for a treat, getting good food for a portion of a price than what usual fine dining restaurants would charge. As the benefit for Jamie Oliver himself, he would be able to reach to a wider range of consumers, since McDonald’s already has their own loyal consumers who keeps coming back to eating at McDonald’s.

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Staffing To begin with, the hiring process should be the same as the current process that McDonaldâ&#x20AC;&#x2122;s uses. This process begins with an application. Then all applicants that are chosen go through an interview. The interview typically decides whether the applicant is hired. The next important thing becomes training. McDonaldâ&#x20AC;&#x2122;s currently has an extensive training program for all positions and also has training lessons for each task that is performed in each position. This approach will also be used in the McCuisine restaurants. A training program will be researched and developed that follows the same guidelines that McDonaldâ&#x20AC;&#x2122;s has used successfully for so many years. All hiring will be done locally, although transfers of current employees may take place under the right conditions. Each restaurant will consist of one general manager, one or two assistant managers depending on size and volume, multiple service and grill managers, and finally a crew. The crew will fill the positions of kitchen and service staff. The kitchen staff will consist of cooks, prep people, and dish washers who will also clean the tables. The service staff will consist of host staff to greet the customers and seat them, and a wait staff to take care of the customers while they are at the restaurant. The restaurant will also need to cross train at least two employees on how to take care of the delivery truck as far as stocking the restaurant and taking inventory when the truck is delivered. The size of the crew will depend on the size of the restaurant and the sales volume.

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Marketing The market research data will allow us to record information about customers, markets, suppliers and consumers. It can also help us to create a strategic plan in our company to prepare for the launch of a product or facilitate the development of previously released products, which are in various stages of its life cycle. Market research is the process that will allow McDonald to identify this key information, yet indispensable. Our market research will be essential to achieve a just and correct mix that allows us to achieve maximum customer loyalty both present and future. McDonaldâ&#x20AC;&#x2122;s faces a competition from other companies in all sectors. To this, we must add the possible economic variables involving economic, social, legal, technological, environmental and other factors and variables that can affect the potential success of McDonalds in the introduction of our new products. Our market research will allow us to identify all these factors and so we can anticipate how these factors affect the willingness of people to buy. As economic variables are modified, there is a changing in social attitudes and purchasing patterns. McDonaldâ&#x20AC;&#x2122;s need to identify if the number of target customers is growing or shrinking and whether their buying habits will change in the future, thus affecting the entry of new products. Psychological aspects are also important, for example, what gives the product a nice picture or how the consumer feels when purchasing our items in their order. These psychological factors are important additions to the customer and for us. We can even say that they are more important and can help us get the benefits of physical products. Through the process of marketing, McDonaldâ&#x20AC;&#x2122;s is established as a leader in the minds of customers. Using the detailed information we have on our customers, McDonald's marketing department can determine: What products are well received? What restaurants are visited

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frequently? What prices consumers are willing to pay? What TV shows, magazines, daily newspapers, advertisements are what consumers see? Another thing that we should take into account when introducing and offering a new item or option on our menu is that our customers should always have ‘choice’. By introducing new products of McDonalds, we should be very careful not to disadvantage the other products - we are introducing an option, not to harm the other. When introducing our product we should invest depending on the stage of product life cycle. Also keep in mind that what is fashionable today may not be so tomorrow we must make the product as attractive as possible for our customers. When introducing our product we invest more or less money depending on the stage of product life cycle. Also keep in mind that what is fashionable today may not be so tomorrow. Consequently, we must establish a continuous monitoring to the needs and preferences of our customers. We also know that our benefits will vary according to variety also the popularity of our product. Depending on the stage of product marketing and how we use will have to vary the amount invested. We will have our product portfolio in which we have information on all our products and their status in each of the variations of its life cycle. As for pricing, we have to consider that the value of this will be decisive in the customer's perception of the product. Usually customers tend to draw their own conclusions on whether a product really worth it or not. We must not forget that a more than just a physical element, there are also psychological connotations for the client when making judgments. We can use a strategy of low prices but with that, we run the risk that most customers associate the variable value for what they consider a “low-cost product is of poor quality”.

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When setting a price for our product we must be aware of the importance of our brand in the market and fair view and integrates that shows the company. When promoting our product we will use all possible marketing tools and available. The methods will include advertising will take place on television, radio, film, and in the press (newspapers, magazines, etc). Other methods of promotion will be placed promotional sales promotions, direct mail, telemarketing, demonstrations, etc... The way we develop our campaign opener results lead us to more or less effective. The television advertising that we use will make people more or less aware of what will be our product and the advertising and written information offer more or less detail of our product. The aim of our methods of marketing communication is to engage the public in our product and produce in them any reaction can be for example, visiting one of our stores, or simply share our product to meet him. It can also happen that these people who know our product is touted as an option for a family member or friend. The key purpose of publicity will raise awareness of the novelty that we introduce and build on this in them an attitude either positive or negative. All messages that are trying to convey should get the attention of customers and keep alive their interest in the product thereby achieving customers want what you are offering. All messages must use correct language and address each market segment respectively. For example, to reach children can use and advertising during children's programs or movies from Disney, to reach adults may use more traditional methods such as newspapers. We may as well make use of our own restaurants to promote our products giving our customers a closer and more direct information. We may as well make use of our own

15


restaurants to promote our products giving our customers a closer and more direct information. Depending on the success of our Marketing management can measure our results in the short or long term.

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Payment Arrangements Clients As we are proposing a different concept of food as well as experience customers will have on the restaurant, the payment will be done after clients end it up their food. In order to give a better service we can offer the following methods of payment: 1. Cash 2. Credit card Since the company offers a product that is consumed immediately after serving, other types of payment such as loans, do not fit with the type of business we are proposing. However as a way to promote the demand for the new products and to boost the business, other unconventional types of payment could be use such as: 1. Mc Donald´s credit card: this will work as a conventional credit card, with the difference that the credit will be offer by Mc Donald´s. (To use this method it is necessary to make a research in order to determine the possible risks the company will face and how it can overcome them). Suppliers To make payments to supplier, the company can use a policy of payment to 30 days or a longer period depending on the supplier and the power of negotiation Mc Donald´s has over it. To make the payments the company can use the following means. 1. Check 2. Bank transfer The cash payment would not be a viable option due to the amount of money involved in this type of transactions, since the company will buy big quantities of merchandise.

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Possible Risks Regarding the methods of payment in relation with customers, the company will only face a risk by using Mc Donald´s credit card, because customers could not pay and the costs involved in resorting legal means to force the client to pay, would be high, in comparison with the money imply in this type of transaction of buying-selling food. The company can overcome this risk by making an adequate research of the customers that requesting to use this type of payment. In relation with methods of payments use to pay suppliers, the risks the company will face will be minimal due to the size of the company and its high bargaining power, as well as its policy of building lasting relationships with its supplier using backward integration strategies.

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Challenges Of course, entering new markets is always a big challenge – whether it’s a small business, or a multi-national firm. Similarly, McDonald’s will also face some challenges not only before entering the ‘cuisine’ market, but also after they have started to operate. Since they will be entering a whole new food market, they will need to plan everything quite smartly and efficiently. Before implementing the big idea of opening a Cuisine, McDonald’s will need to revise its marketing strategy. McDonald’s will be targeting a whole new set of customers, primarily the ones who have the time to sit and enjoy their meals. Consequently, the advertisements will be based on people who enjoy a ‘fine-dining experience’; for instance families who enjoy a nice dinner with their loved ones in evenings. Moreover, deciding an appropriate location (an area) can become an obstacle in regard to this business plan. For instance, opening a cuisine in an area where there are a lot offices might not be a good idea; as people working in offices tend to prefer fast-food rather than steaks, spaghettis etc. for lunch. They tend to prefer food that can be consumed quickly, on regular basis and something that does not make them feel heavy and lazy. McDonald’s will need to search for a place that is suitable and in-reach for its targeted customers. The most challenging part for McDonald’s will be to decide what to include in its ‘Menu’. Of course, at the end of the day, people come to McDonald’s for the food that it offers (along with good service). It is really important for McDonald’s to have a good menu of items to offer at its McCuisine. Having a small and limited menu will not be a good idea, since people will first visit McCuisine to look for different options (in comparison to other cuisines). So, it is important to have a lot of creativity and invention of new tastes and recipes

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in its menu. For example: McSteak will be a steak, which will be served with a newly developed sauce from the kitchens of McDonald’s. Once the cuisine has started to operate, it would be essential for the McDonalds and Co. to keep its customers interested. It would also be important to keep making people in different states and cities aware of this new idea. Moreover, another issue can arise in regard to its service at the McCuisine. If the service of the waiters is not good at the McCuisine, customers will tend to lose confidence in McDonald’s as a whole (that includes McDonald’s fast-food chain as well). Therefore, quality of service/food and maintaining a good relation with its customers should be the prime goal of McDonald’s.

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Conclusion  The company has all the elements to achieve the success of this new business idea, as its long history, good reputation for quality products and services, experience and financial strength, give it the tools to break into a new market segment through new products.

 This new business idea would allow the company to continue consolidating as a leader in the national and international market, by taking advantage of new opportunities to meet a larger segment of consumers who are having more demanding expectations regarding what the company should offer them.

 Diversification of products and services and market segments it serves, will enable the company address potential risks that may affect its business, such as changes in consumer tastes, economic instability that can decrease the demand, among others.

 If the company manages to approach the right way this business idea, it can significantly increase its incomes and its ability to continue to compete effectively in the global market.

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References

Food Revolution. (n.d). Illinois. Retrieved April 19, 2012, from http://www.facebook.com/FoodRevolutionCommunity?sk=app_189556737742638&a pp_data=IL Katz, N. (2010). McDonald's and Toy Lawsuit: Are "Happy Meals" Tricking Kids? Retrieved April 20, 2012, from CBS News: http://www.cbsnews.com/8301504763_162-20008571-10391704.html McDonald’s. (2012). McDonald's History. Retrieved April 19, 2012, from McDonald's:http://www.aboutmcdonalds.com/mcd/our_company/mcdonalds_history _timeline.html Oliver, J. (2012). Jamie Oliver Foundation. Retrieved April 20, 2012, from http://www.jamieoliver.com/foundation/ The Daily Meal. (2012). America’s highest grossing fast food chains. Retrieved April 17, 2012, from http://www.foxnews.com/leisure/2012/03/13/americas-highestgrossing-fast-food-chains/ Ucallit. (2011). Goals and objectives for McDonald´s. Retrieved April 18, 2012, from http://ucallit.wordpress.com/2011/03/18/goals-and-objectives-formcdonald%C2%B4s/ U. S Census Bureau. (2012). State and country quickfacts- Illinois. Retrieved April 19, 2012, from http://quickfacts.census.gov/qfd/states/17000.html

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Team # 216 Client (Company): Mc Donald

Product/Service (a brief description, 3-10 lines): McDonald’s gourmet with a new range of products of high quality.

Number of pages, including title page: 29

Team members: Aldy Alexander

Indonesia

Adriana Solana Martín

Spain

Suaza Posada Estefanía

Colombia

Nasser Alkhunaizi

USA-NC

Khalifa S., Al Qamzi

UAE

Brandon Lee

Malaysia


Contents

Summary

3

Product/Service

4

Target Market

8

Consumer segment

10

Production site or service personnel location

11

Entry mode

13

Staffing

16

Marketing

18

Payment arrangements

24

Capital

26

Likely challenges

27

2


Summary McDonald's is a chain of fast food restaurants. Now is one of the leading companies worldwide. Today this restaurant has not changed its strategy. People still do not consider a restaurant where quality prevails. We want to create a line of products that are designed as quality products, where your health is not affected. The name of the new line is V.I.PMac. V.I.PMac will be divided into two parts Happy Food and Diary Food. V.I.P Macâ&#x20AC;&#x2122;s can be targeted to the whole world as Mcdonald is an international franchise. The Diary Food can be cater for the customer that wanted to take Mcdonalds for a more appropriate meal. As for facilities we will be using the current facilities with a few upgrades at outlets to accommodate the new V.I.PMac. Mc Donalds need to redefine the staffâ&#x20AC;&#x2122;s profile. Mc Donalds will hold training for the expected result in serving food. In the marketing strategy there are two main variables to consider: controlled and Independent variable. McDonalds will accept several payment methods for its products. Mcdonalds is able to launch the new menu without an additional outside fund.

3


McDonald's Product/Service. McDonald's is a chain of fast food restaurants. The first restaurant was opened in San Bernardino, California in 1940. Now is one of the leading companies worldwide. First, the menu consisted of only twenty articles. Almost all had barbecue flavor. During the next years McDonald introduced several articles and news. For example, McAuto, where you can pick up your food with your car or different recreational parks for children. All these innovations have made McDonald is positioned in one of the first places in the fast food market. Today this restaurant has not changed its strategy. They are cooking their main products, such as: hamburgers (one of the world's most famous hamburger factory McDonald, Big Mac), chips, soft drinks etc. However, it has greatly increased its product portfolio, now they cook chicken burgers, salads, smoothies, fruit, coffeeâ&#x20AC;Ś Although MacDonald managed to cover much of the market, people still do not consider a restaurant where quality prevails. More and more people think that eating healthy is very important to your health. Macdonald is a very good place for eating once a week at most, but when we find a place to eat several days a week we want a place where we have a variety of food and good quality. We with our idea want to fill that space in McDonald.

4


Our product line will be a totally new that has never been served in McDonald. This is a new way of understanding the concept McDonald. We want to create a line of products that are designed as quality products, where your health is not affected. Where people can go four or five days a week, with their children, grandchildren, grandparents, parents ... where they can find products for the whole family of high quality. The name of the new line is V.I.PMac. The idea is not to change McDonald, but instead is to open a path more toward market leadership. V.I.PMac will be divided into two parts: the first aimed at a completely oriented sector to healthy food, your name will be Happy Food and the other line will be directed to more elaborate meal, your name will be Diary Food. Below we will explain each separate proposal:

HAPPY FOOD: It is a type of food that stands out as having fewer calories. Is indicated especially for people who care especially your diet. One of the problems that McDonaldâ&#x20AC;&#x2122;s is the amount of calories, fat ... and the few vegetables they sell are usually not fresh and are not a good temperature. Happy Food intended to fill that area. The menu in their majority shall consist of:

5


-

Fruit. Intends to sell prepared dishes based on fruits, such as fruit salads. So you can always have two or three pieces of different fruits typical of the season where we are. This is a healthy way to eat desserts that are not based on pastry or ice cream industry.

-

Vegetables: prepared dishes made with spinach, carrots, potatoes (not fried), lettuce, tomatoes etc. The idea of this type of food is not only to create dishes with fruits or

vegetables; the idea is that the basis of this meal is healthy and fresh vegetables. For example: a menu that we could find is a hamburger Happy food spinach in salted and accompanied by seasonal fruit pole. It is simply a new way to open up to an ever more demanding and conscious with their health and physique. DIARY FOOD: This type of line is more geared to people who want to eat every day at McDonalds and they will not because of the food is not very healthy to eat every day, and not much variety to choose from. The objective is to create three types of menu: -

The first menu will be based on a first hot meal (soup, mashed ...) and a main course to choose all between meat and fish.

-

A second menu which focuses on rice, meat and eggs.

-

The last menu would be based on the pasta (macaroni, spaghettiâ&#x20AC;Ś)

6


This is a quality food, low price, and fast, as McDonald is recognized as a fast food restaurant. The meals are precooked, will be served in comfortable trays to take home or elsewhere, and the maximum time of delivery will be as if asking for a standard menu (at most 5 minutes of waiting) With this idea we donâ&#x20AC;&#x2122;t want to change Macdonald, we want this restaurant directed to a greater number of clients In order to achieve a competitive advantage with other fast food restaurants.

7


Target Market The target market for the V.I.P Macâ&#x20AC;&#x2122;s Happy Food and Diary Food can be target to the whole world as Mcdonald is an international franchise. Acording to the New York Times Mcdonald forecast there is increase in the sales of the Mcdonald but it is lower than the forecasted amount and one of the reasons is because of how unhealthy the Mcdonalds meal is. More and more customers are getting more health conscious and this is a bad situation for Mcdonald to compete with Subway which is way healthier. So the Happy Food will be able to play an important role to support these health conscious customers. The Diary Food can be cater for the customer that wanted to take Mcdonalds for a more appropriate meal. Mcdonald have always been serve for people on the move; businessman, students and salesman. So the food have always been easy to carry like burger however they donâ&#x20AC;&#x2122;t serve a complete meal that can be dedicated to business dinner or a romantic meal for anniversaries. Also by focusing on the Diary Food 3 menu Mcdonald can also target families that wanted to eat out for dinner as parents will always choose the best food for their child as dinner is meant to eat at a slower pace from lunch and a family bonding time. So with the new menu which need >5 minutes to cook can be used for families members to chat and ask about each otherâ&#x20AC;&#x2122;s day and event that happen.

8


http://www.nytimes.com/2011/09/10/business/mcdonalds-sales-rise-but-fall-short-offorecasts.html http://www.mcspotlight.org/case/pretrial/factsheet.html

9


Consumer Segment V.I.P Mac is meant to attract more costumers to McDonald. This happens by adopting the strategy of extending the menu so it includes different and healthy food. We suggested two menus: Happy Menu and Diary Menu. These two menus will target those who care that they only eat healthy food. We also can say it is targeted at healthy people. This is formed in several aspects. The menus clearly state that food in this menu has low calories. This attracts people who care about their diet. They will consider eating from McDonald at anytime since this menu is available for them. Diet specialists may suggest this menu to their people because it is now no longer a high calories and fat restaurant. It is like a message to the public that McDonald also provides a low calories menu. Moreover, The new menus will target athletics. The new menus provide food with great nutrient values. Thus, customers will not only go McDonald for being hungry but to benefit from the nutrient values. In addition, having a healthy menu with low calories give costumers more options in what to eat instead of sticking on certain meals. Also, it is going to make sense when McDonald make advertisements about its new line using famous athletics who care about keeping they body healthy. Athletics eating from the new line of McDonald is acceptable, unlike if they are eating from the current food menu.

10


By adopting these strategies, McDonald can open branches in places such as gyms, sport stadiums, colleges, and almost anywhere because it now satisfies all segments of society. Production Site/Service Personnel location Launching our new line the V.I.PMac at McDonalds outlets worldwide will need some adjustments. Our V.I.PMac line is divided into two parts, Happy Food, and Diary Food. The V.I.PMac line will not require hiring low skilled staff since the staff available at McDonalds is sufficient. McDonalds has over 1.5million staff worldwide. However, we will need to find suppliers of fresh fruit for Happy food and we will need to hire chefs to plan several dishes that will be served in the Diary food. Also, the suppliers of vegetables are already available since McDonalds buys vegetables for use in its hamburgers. Some vegetables will be grown at McDonalds owned farms. McDonalds already has potato farms for its well-known French fries. Furthermore, there is a need for staff to be trained to prepare the new dishes of the V.I.PMac line. The cost of training staff is borne by the franchisee as per the franchising agreement. Since the new V.I.PMac line is mainly for health conscience people and people that wish to regularly eat at McDonalds outlets. As for facilities we will be using the current facilities with a few upgrades at outlets to accommodate the new V.I.PMac. We will have ovens installed at outlets so certain dishes can be made in a high quality and quick way. The nutrition information would be available to customers on the paper bags for take away meals or on pamphlets for people who eat-in. Meals will be ready to cook and will take no longer than 5 minutes to be prepared and served to customers, that way customers are more satisfied since they get a quick meal thatâ&#x20AC;&#x2122;s healthy. Quality control officers will be hired to ensure that the food served is of the highest standard, consistent across different outlets and satisfy customers. It is very important for us to have a good first 11


impression with the new V.I.PMac line and this is why quality is our top priority. To ensure freshness of the vegetables McDonalds will be getting itâ&#x20AC;&#x2122;s some of its vegetables from local producers and the rest from its own farms. McDonalds is known for using the freshest ingredients. In Australia McDonalds tomatoes are never frozen to maintain freshness. The chicken and beef are from Australian suppliers. ()http://mcdonalds.com.au/our-food/whats-in-it ).

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Entry Mode Mc Donald’s has been running in Franchise mode so far. According to wikinvest.com “Franchising is a business model in which many different owners share a single brand name. A parent company allows entrepreneurs to use the company's strategies and trademarks; in exchange, the franchisee pays an initial fee and royalties based on revenues. The parent company also provides the franchisee with support, including advertising and training, as part of the franchising agreement. Franchising is a faster, cheaper form of expansion than adding company-owned stores, because it costs the parent company much less when new stores are owned and operated by a third party. On the flip side, potential for revenue growth is more limited because the parent company will only earn a percentage of the earnings from each new store. 70 different industries use the franchising business model, and according to the International Franchising Association the sector earns more than $1.5 trillion in revenues each year.”1 “Weakened Economy Hurts Sales and Slows Franchise Expansion Franchising becomes a much less desirable business model during rough economic times. First, franchisees must pay royalty fees based upon their revenue, regardless of whether or not they are earning profits, which adds to the franchisee's financial struggles in an economic downturn. Furthermore, slower sales cause parent companies to reduce expansion plans”.

1

Taken from http://www.wikinvest.com/concept/Franchising

13


Even though this has been the way how Mc Donald’s has done all its expansion, with this new line we will suggest to create a different kind of cooperation between local restaurants and Mc Donald’s As we all well know, McDonalds has restaurants all over the world, in our proposal we intend to create a new line, for which we think is recommendable to open new classy restaurants, which will serve only the new suggested VIPline, in this way, the new refined customers will feel differentiated from the rest McDonalds consumers, this new restaurants should have a stylish, elegant, contemporary decoration and quite environments; will be located only in exclusive spots of important cities, this will give the new segment of customers the feeling that they are enjoying a new posh experience with this brand, in each city where the new restaurants will be set up the company will search a partnership with the best restaurants in the specific place, this will help the new line to be linked to the excellence and quality of the food and not to the low price and quickness as it is nowadays with the current menus; the partner will contribute with some specific recipes, customers database and some training for the new personnel, and this also will help the new line to have a better idea of the culture of the each of the regions they are approaching, the government of the partnership will be taken by McDonalds when possible, and for both partners when the local restaurant so decides, for all the markets where the line will be launched, there will be own MacDonald’s VIP restaurants which name will be taking the local restaurants names: e.g. McDonalds by – partner name-, this is going to depend on each market for what McDonalds will have to buy rights for using the name, and also for registering on the different cities in the market. The line will start with 3 restaurants-only in the whole world, located in centers of extreme cultural and gastronomic influence, this is to create a feeling of expectation 14


in the client, and when the restaurant starts expanding, they will have the customer already wanting to know the concept of the place, this for the first 3 months, starting the expansion from there, MacVIP will have 50 brand-new restaurants in the first year, starting with the next cities:

2

This strategy is going to help the acceptation of the product in other countries not mentioned above, because those are the ones culturally accepted as influential, although there are so many other important economies emerging that will be taken into consideration for the rest 40 restaurants, the first 3 are going to be placed in: New York, London and Paris, this because they are important markets gastronomically talking, and also culturally, they accept American culture reasonably easy and the elegance is evident to anyone who visits the restaurant.

2

Image taken from http://starizona.com/acb/basics/using_latitude.aspx

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Staffing As we recommend a change of the targeted customer and menus the staff will have to be consequent with the image, quality, and elegance of serving, the new segment we what to get in is hugely different from the Mc Donald’s classic; therefore Mc Donalds need to redefine the staff’s profile, Mc Donalds will held a training for the expected result in serving food. For the purpose of the excellence and refinement feeling for the new target market the organization have to hire new personnel, which is going to have to pass certain tests of knowledge about etiquette and VIP customer service, it is indispensable for each employee to know perfectly the menus, this way the waiter/waitress can give suggestions to the customers based on wide knowledge of fine food. For the assessment criteria of the training we won’t take the selection standards that already exist in the Mc Donalds company, Mc Donalds have to design additional desired profiles such as the restriction point of good presentation in preparing and and serving the public we want to target, and give and extensive kind of training that help Mc Donald’s to achieve a completely new presentation to the public. It is also suggested to hire personnel depending on the demographic situations of locations, e.g. hiring French people in a French-concept-like restaurants, this to help the customer to rely on the specific advice given by the employee, the profile has to be well-defined, specifying all the requirements of the position of all charges, prevailing in this specifications the real knowledge and experience in serving in a high class environment, not only the floor staff has to be well presented, also the managers who have to include attention to detail and capacity of work under pressure, have to be well known about the food served on the restaurants, there will be an special way to attend

16


the customer in this new restaurant, not to over-attend but to treat well, the personnel have to be able to create a friendly environment in which the customer doesn’t forget the comfortableness of the experience when buying at MacDonald’s traditional. Mc Donald’s must improve in the high quality product and ingredients, as well as the recipes. It is indispensable for Mc Donalds’s inspections conducts to be done to every single order before actually getting to the customer. Surely to do this Mc Donald has to hire a team of researchers to do the selecting and classifying ingredients for existing products. However, we emphasize here is the intensity or schedule should be more intensive inspection. Thus achieving the target for a High quality product can be achieved by Mc Donald’s

To create an policy of organic ingredients Mc Donalds can search a cooperation with local farmers so that Mc Donalds could negotiate directly and to establish good relations with surrounding communities. Mc donalds won’t need to spend more money to import raw materials.

From the above points can be concluded that existing staff does not need to be replaced, on the classic line that Mc Donald’s already has, but for our new proposed line and chain of elegant restaurants Mc Donald’s has to hire new personnel with high qualifications to serve the target market, and they will undergo training frequently. What if an inadequate number of workers Mc Donalds will hold the opening of direct jobs and carry out testing in accordance with valuation standards Mc Donalds to add some points above.

With the addition of performance assessment, intense research on the quality of ingredients, the excellence of food presentation and good service Mc Donalds will be recognized as one of the most important high class restaurants around the world. 17


Marketing Strategy In the marketing strategy there are two main variables to consider, namely; 1. Controlled variable 2. Independent variables Variables that can be controlled by an entrepreneur of them; 1) Market segmentation A company carrying out market segmentation due to differences in desire, purchasing power, location, attitudes, and habits of buyers. (Philip Kotler, 1997:250) * How to develop market segmentation; •

Based on Geographic (Mc Donalds will adjust its marketing system based on

location eg company subsidiaries in Asia such as Indonesia to Mc Donalds typical menu could include Indonesia, or a variety of foods typical of a country at any location Mc Donalds and a special menu that only exist in every country, soalso in other countries. •

Demographic, variables: gender, age, income, occupation, education, religion,

ethnicity, (Mc Donalds alone can give any waivers or special packages according to specific criteria, such as for example in Indonesia alone saving package already exists, to create a specification the price and type of the more we can add a menu ordering menu for a special day •

Psychographic, focusing on attention to the symptoms of activity (behavior),

interests, and opinions of consumers or the class / status in society. (Mc Donalds on this topic can add a navigation menu that is more by way of surveys or adjust the existing traditional food in Mc Donalds area) •

Conduct / consumer responses to products; events demand for goods, benefits,

user status (first user), the level of usage, loyalty. (This must be on notice of the sale

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and every day we can deduce what the menu is more salable. And Mc Donalds can improve the quality of the menu) Planning a marketing strategy: a. Current marketing situation carefully current conditions are very popular among the public is the franchise. So Mc Donald will maintain and keep it interesting in a way that there costumer b. External environment analysis. External environment plays an important role in terms of marketing strategy in this regard Mc Donalds have a few important points that exist in this field rivals for example, that Mc Donalds did not fall and lose competitiveness of their product Mc Donalds will create new innovations as well as innovation we give the food and the Healthy Food High quality. c. Analysis of opportunities and navigate to reach opportunities (opportunities). That we want to achieve in this innovation is the opportunity to bring in more customers, increase the quality of each menu, and improve classroom Mc Donalds in a high class food not low again.

In achieving the above we need a reliable and fast worker. How the presentation and ordering is very influential in maintaining customer trust and interest. This is supported also by an increase in the quality of materials; Mc Donalds can directly lead to a different flavor by using quality values to achieve the high class fast food 2) Market budget What is the large amount of marketing budget is highly dependent on the goods sold, and also in line with the experiences of entrepreneurs. Mc Donalds alone can sustain all the way to shop or produce, but will do penseleksian mc Donald back in

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terms of quality so that it will lead to changes in spending that has been in the company Mc Donalds. So no wonder that to change or make a Mc Donalds Fast Food High class requires a bit of a big budget in the achievement process. After that process is a process of regular and stable as the previous process. 3) Timing Employers must keep the time, when he had to start launching marketing their goods, or when a store or restaurant to be opened. In terms of timing mc Donald was very good and the right to open 24 hours. But for the timing menu maybe it is a very valuable example for breakfast from 05.00 am - 10.00 pm.Traditional food at lunch time, regular food available for 24 hour.

Variables (independent) can not be controlled by the entrepreneur is; 1) The existence of competition To respond to this competition Mc Donalds will not stop making innovations in each year and maintain a level of quality that has been built in the process of improvement that we suggest. 2) Development of technology Mc Donalds alone can continue to filter information from the public and of course Mc Donald will continue to realize that there are changes in technology 3) Demographic changes (changes in the composition of the population) Mc Donalds hfarus really ready to change the population. In Mc Donalds, take consumers pay attention to all the conditions of the existing conditions in the population changes. The help of marketing research to marketing; 1. Identify who your customers

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2. Identify what your customers needs 3. Evaluation of potential base you have 4. Select or specify the appropriate distribution channels 5. Select the appropriate promotional techniques If monitoring continues to maintain the level Mc Donalds consumen that already exist in each year may even increase. 4) Political and economic policies of government It cannot be avoided anymore. In a state government's decision is the fact that will be burdensome or would benefit the company itself 5) Natural resources In terms of natural resource use Mc Donald needs to pay attention to how the regulation of natural resources can continue to use the Mc Donalds and maintained there. How to assist in the rehabilitation, replanting, and maintenance.

Turbo Marketing Is the latest development of the marketing phenomenon that requires the fastest service for consumers. (Philip Kotler, The Journal of Business Strategy - 1991)

Marketing Mix: Maximizing 7 P; ĂŽ Product Product quality and sound classy and elegant ĂŽ Price ď&#x201A;ˇ

Influence the manufacturer;

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For pricing can be adjusted with the existing practice in every day production of Mc Donalds 

Effect wholesale;

Previously there has been any bonus or saving packages are created by Mc Donalds own. and Mc Donald can add a variety of other packages that quality efficiency. î Place (distribution channels) In terms of its own sales locations Mc Donalds is very capable to spread and invade franchise world market. For the deployment location doubt. î Promotion 

Advertising (sponsor / ad) Mc Donalds Think Global Act Local

Sales promotion (offer), Traditional and Elegant High Class Fast Food .. Combinations our taste!

Public relations (good imagery to the public). Mc Donalds Never forget the original identity for the country

î People Mc Donalds will try to fill Its menu with Point Of people Satisfaction î Physical Evidence (physical evidence in the fields of service) Delivery. It’s the real time to serf any time. î Process Mc Donalds do process Its actually but more accurate and fast, every employee must be prepared to do Their work better than before.

Market intelligent

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Market intelligence system is a set of procedures and sources used by managers to obtain information about the marketing environment. (Philip Kotler, 1997:112) Steps taken to improve the quality and quantity of marketing intelligence; 1. Train and encourage sales staff to find and report new developments in the market. 2. Sending specialists to gather information about the service system somewhere. 3. Purchase information from outside parties

Product Development The product is anything that can be offered to the market to meet consumer needs and wants. (Philip Kotler, 1997:430)

The product is a set of attributes of both tangible and intangible, including the problems of color, price, manufacturer reputation, good name stores that sell and service factory and service retailers, received by the buyer in order to satisfy his desire. (WJ Stanton, 1981:192 )

Held goal of product development; 1. Meet customer needs 2. Winning the competition 3. Increase the number of sales 4. Exploiting the resources of production 5. Prevent boredom consumers

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Payment Arrangement

Mc Donalds accepts several payment methods for its products. Mc Donalds Payment Methods: Cash the most common and preferred method for McDonalds since it is the most liquid form of payment as it can be stored or used for other purposes easily and does not involve using a third party such as banks during the transaction. Another method that customers prefer are credit & debit cards since many customers prefer to not carry cash with them, instead they use cards to pay for anything they would like to purchase. It is more convenient for customers since they can make payments of the exact amount needed through the use of credit or debit cards. In August 18th 2004 McDonalds US announced a new way to pay at their outlets through the use of the MasterCard PayPass. Basically the PayPass works through Radio Frequency Identification Technology (RFID), which allows the customer to just wave the card in front of a sensor to pay for their meals. This is a great way for McDonalds to enhance the customers experience at McDonalds by making payment quick easy and simple. (http://www.qsrweb.com/article/110782/McDonald-s-expands-cashlesspayment-options-with-MasterCard-PayPass) McDonalds Payment to suppliers: McDonalds can pay suppliers using cheque is mainly used for items that cost very high amounts for example; fryers. The cheque is cleared after the equipment is delivered.

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Another method is the use of cash, which is paid to suppliers once the goods are delivered at the desired location and passes the necessary inspection carried out by quality control staff. The above-mentioned payment methods are used by McDonalds and are sufficient enough to be used for the new VIPMac line.

Capital Mcdonalds is able to launch the new menu for the Happy Food and also the Diary Food without an additional outside fund as they earn $1.27 billion for the 1st quarter of 2012. This is a total of 7% increase from last years. The additional increase in the profit of Mcdonalds will be able to increase Mcdonalds promoting budget for Happy Food and Diary Food. As Mcdonalds is financially stable they would be able to get additional funds from the World Bank or the local financial institution. Mcdonald would not face many challenges in order to raise their capital for the new product concept. Mcdonalds also have their own loans system, where they can provide loans to their individual smaller franchisers to apply loans from Mcdonald main Headquarter to help increase their funds. This method can help both the franchise and Main HQ as the HQ collect interest as funds and the franchise can have a lower interest to help with their business.

http://www.investorplace.com/2012/04/mcdonalds-q1-earnings-meet-expectations/ http://popularmcdonaldsloans.com/

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Likely Challenges: Summarize other challenges the newly formed company is likely to encounter and offer your solutions.

Begging from the premise that Mc Donalds is already a huge brand in the food market, and is in the top of mind when asking about fast food, the biggest challenge that could face could be the change of the sector that the new line is going to be directed, because Mc Donalds has have a very long trajectory in the business and its known for the quick service and low prices, but for our new line we like to be directed to a more exclusive kind of public, so we can imagine that at the beginning in the introductory period our target market could present some skepticism towards the quality and the elegance of it, but this can be contra rested being linked with the most prestigious restaurants in the cities that we are going to incur. Another likely challenge is the contracts that will held around the world for this new line will have different specifications, this can cause management confusions and also for the way how is going to be treated the partnership in the different cultures, could be a challenge due to Mc Donalds has a very strong organizational culture, being the leader on the fast food market, and this new line will permit the organization to get itself into a completely new environment of quality and customer service, a possible solution is to design a type of flexible contract to which the restaurants that Mc Donalds will cooperate with, will have to accept and adapt to each of the cultures and demographical characteristics. As itâ&#x20AC;&#x2122;s a big change for the staff that is going to be hired to work on the new restaurants, Mc Donalds have to make researches about profiles and wonâ&#x20AC;&#x2122;t be able to consider old C.Vâ&#x20AC;&#x2122;s that are on Mc Donalds database because they are not properly selected, the best

26


solution for this is to create a new position to select the best services providers as staff, could be sharing the staff from the restaurants that Mc Donalds is going to work with other powerful entities, therefore some disagreements during the serving style or changes that Mc Donalds will propose could be rejected by the management of the recognized restaurant, to solve this challenge they could sign an agreement about important decisions such as decoration, and general looks of the restaurant. Having had some problems related to some ingredients used in burgers in previous years, Mc Donalds must assure to the new customers that the quality of the product is the best on the market as well as the presentation and service, also because the prestigious local restaurant in partnership with Mc Donalds is actually giving the new restaurants a huge change on the perception of the client, this challenge can be faced with a scrupulous supervision on the cooking process, this because the new line itâ&#x20AC;&#x2122;s not focused on speed of price, but in comfort and refinement. Furthermore, as it is so recognized the brand, can possibly mix its experience on the market and apply it for the new line, but at some stage this could represent a mistake, even though Mc Donalds is set up around the world, the organizational culture to which is directed the organization is not the same to which we want to approach with the new proposal of the VIP line is completely different so much of the experience that Mc Donalds has wonâ&#x20AC;&#x2122;t be so useful to apply on this new sector, the solution we suggest is to deeply talk to the partnerships owners about the culture they are used to focus on, and also to train all its employees with etiquette and good presentation. The revenues that Mc Donalds will have to give the partner will be extremely high as they are well known restaurants so this can be solved proposing an interchange this way: on the classic fast food restaurants revenues a percentage will be also given to the contract of the new partner, and the rest is going to be paid with the revenues of the new

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line directly to the partner, this if the partner accepts it, otherwise, in the introductory stage this cost will be taken to approach the market and then will be payable with shares on the revenues on the new line in around the world, this is seen as an opportunity to go global and be known in another markets, where McDonalds has been and the local restaurant hasnâ&#x20AC;&#x2122;t. Those are the more critical challenges that we think our purpose will face in the introductory stage, from then and on the line will get in the top of heart too when talking about fine food, this way Mc Donalds will be in different markets with high revenues in both of them, will be the leader on this new style of partnering around the world.

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Team # 218 Client (Company): ALDIE inkauf GmbH & Co. oHG

Product/Service (a brief description, 3-10 lines): We are expanding ALDIâ&#x20AC;&#x2122;s operations into new Asian markets. Our first target market is Indonesia. Our report will focus mainly on this market, its opportunities, challenges, and likely outcomes.

Number of pages, including title page:

Team members:

Name

Country

Alima Shofia

Indonesia

Alvaro Pieto Amaya

Spain

Urrego Morales Yadi Carolina

Colombia

Nicole Byrd

United States

Solomon Njiraini

United States

Joshua Pong Kah Heng

Malaysia

Did Not Participate

Did Not Participate

1


Table of Contents Executive Summary ................................................................................................................................... 3 I

Our Company .................................................................................................................................... 4

II)

Product/Service ................................................................................................................................. 5

III)

Target Market ............................................................................................................................... 7

VI)

Consumer Segment ....................................................................................................................... 9

VII)

Production site or service personnel location ............................................................................. 10

VIII)

Entry Mode .................................................................................................................................. 11

IX)

Staffing ........................................................................................................................................ 13

X)

Marketing........................................................................................................................................ 14

XI)

Payment Arrangement ................................................................................................................ 15

XII)

Capital ......................................................................................................................................... 16

XIII)

Possible Challenges ..................................................................................................................... 17

2


Executive Summary This projects requires us to represent a consulting company that specializes in dinding business opportunities and developing initial business plans for prospective ventures. The primary focus of our project is to expand ALDI into Asian markets. ALDI is a We have decided to choose Indonesia as the specific place for the market. Currently, there is not an ALDI in any part of Asia. Expanding this company into Asian markets will help increase the growth of the company as a whole as well as have a major impact on the amount of revenue the company obtains per year. In this portfolio, we will discuss the companyâ&#x20AC;&#x2122;s background, product/service, target market, consumer segment, production site, entry mode, staffing, marketing, payment arrangement, capital, and possible challenges. For this particular company, we have decided to use the wholly-owned subsidiary as the entry mode for this market.

3


I

Our Company ALDI is a discount grocery chain that is based in Germany. Its first store opened in

Southeastern Iowa in 1976. When the first stores were built, ALDI only carried 500 select brand products. Today, ALDI has about three times as many products in stock than when it first started. It operates in 31 states and has over 1,000 stores in the United States. Worldwide, ALDI has over 7,500 stores. ALDI is a high quality and low priced chain that sells mostly everyday items. The products sold there are only sold at ALDI stores and are “no name products”. ALDI’s core concept is “honest to goodness savings”. To keep their prices low, they keep a small staff, displaying items on pallets and not on shelves. When ALDI customers shop, they need to bring their own reusable bags because ALDI does not supply plastic bags like other grocery retailers. Instead, ALDI customers can purchase their own plastics bags from any ALDI location or bring in reusable bags. Customers also have to bring in a quarter to get a shopping cart. This eliminates the need for baggers and people having to go get carts because when the cart is returned so is the quarter. ALDI has several ways to keep prices low for their customers.

4


These are just a few to name.

II)

Product/Service ALDI sells primary goods, such as food, beverages, and many households items with

inexpensive price. Besides, ALDI has its own-brand labelled which is competitive enough compared to other popular brand that ALDI sells. Moreover, now ALDI sells electronics items, such as computers.

5


ALDI as retailer provides: 1. fresh meat ALDi’s meats are inspected and solda in air-tight, and leak-proof packages. We can guarantee that those meats are hygienic and in high quality. 2. fresh produce customers do not need to worry, because ALDI sells the results of fruits and vegetables in peak of ripeness. 3. breads and sandwiches All of bakery products are made in ALDI’s own recipe. 4. Dairys Customers can find the dairy case at ALDI. Milk, butter, yoghurt , and more. Besides, customers not only can find breakfast items like eggs, hash browns, and orange juice, but also puddings, gellatins, string cheese and yoghurt. 5. Refrigerated meats In ALDI customers can feel how delicious the special sausages-smoked in every size and shape and the richness of Appleton Farms fully cooked spiral sliced ham. 6. frozen foods Based on the cuustomer’s convenience, ALDI provide a frozen components, such as chicken, fish, vegetables, and side dishes. 7. Pantry Item ALDI will kep customers supplied with canned vegetables, tuna to pasta and sauce 8. Snacks and sweers Customers can find yummy yoghurt and some tortilla chips. 9. Beverages ALDI sells may drinks, like green tea, coffee, and some soda that will supply the customers some “liquid”. 10. Wine and beer Customers can find the variety of beers in ALDI which come from Holland, Germany, and Latin America which have good quality and also in low prices. 11. Lacura Skincare and Beauty

Lacura which already famous in Europe now avalaible in ALDI stores. 12. Households You-Must-Have ALDI has so many households that customers need, such as, toilet papers, air freshener, trash bags, and much more in ALDI’s own brand that already approved in Its own laboratories that prove whether ALDI’s products have same quality compared to another expensive brand.

6


13. Computers and electronic stuffs Now, ALDI sells variety of computers and electronics. Eventhough not much as another elctronic stores, but still, ALDI tries to serve the best for the customer. And all of the products surely has low price and high quality.

III)

Target Market Target Market can be define as a specific group of consumers at which a company

aims its products and services according to (Entrepreneur Media, 2012). The target market that we are targeting to penetrate into is the Indonesian market that is up and rising and modernizing that can be seen as a potential country that ALDI can future expand.

With the advancement and outlets ALDI stores has across 17 countries, the Asia market could be their next expansion as Indonesia is vastly developing in their retail market as their consumptions for goods are ever increasing to satisfy the needs of the citizens. Indonesia is in fact the fourth highest populated country with a staggering amount of 245,613,043 as of July 2011 which is expected to grow to 248,216,193 by July 2012 (Miniwatts Marketing Group, 2012) and the 14th largest country in the land mass listing amounting to 1,919,440 km2 (740,904 mi2) (The New York Times Company, 2012). Besides that, Indonesia is situated in the south east

7


of the worldâ&#x20AC;&#x2122;s map and has 17,508 islands of which 6000 are inhabited. With a proximate of 58% of Indonesiaâ&#x20AC;&#x2122;s population live on the Island of Java and the statistics involved here make it the most populous island in the whole world. ALDI should take this opportunity to target the Island of Java as its venture market.

Moving on, with the increasing population of the younger generation with the age of 1529 years old which amounts to 29% of the whole population of Indonesia and the rapid urbanizing in the country, that age range of 15-29 years old could be the potential target market for ALDI as they provide convenience and a whole range of goods priced at affordable prices. In addition, the target market can primarily be focus on the female gender as female has a higher likelihood to be purchasing goods from ALDI to sustain households. Besides, ALDI as a huge retailer will allow consumers to be exposed to international taste and trends. Besides that, the purchasing power has been recovering in recent years as solid economic growth has been restored after the massive natural disaster that took place on 26th December 2004 which is also known as the 2004 Indian Ocean earthquake. Indonesiaâ&#x20AC;&#x2122;s population can be divided into two categories, the lower income citizens and the higher income citizens. The typical diets for lower

8


incomes citizens include rice with some modest garnishing and vegetables whereas at the other extreme of moderately higher income citizens, permit a more varied diet with significantly higher share of spending on fish, meat, eggs, dairy and fruits. Hence, allowing spending on prepared food to rise rapidly as with the rise in income. Therefore, ALDI can focus on the averagely higher income populations as their target market for their sales of goods.

Consumer Segment

VI)

By seeing the chart above, we can see that middle low customer have high number in Indonesia. In this case, we can take this segment to our target market. The reasons why choose middle low customers: ď&#x201A;ˇ

Because, Indonesia has unstabilized economics condition. This condition sometimes makes some primary needs have higher price and it really makes the middle low customers get difficulties during fulfil their daily needs. On ALDIâ&#x20AC;&#x2122;s cheap price and good quality, we believe that middle low customer can fulfil their daily needs easily and also they can save their money.

9


VII)

Production site or service personnel location ALDI promises its customers quality products for the best price. Their understanding of

product quality includes consumer safety, health and well-being and product sustainability. ALDI wants to enable consumers to make informed choices as they strive to reduce or avoid any negative impacts of their products and operations and maximise their positive attributes and benefits, (ALDI.co.uk). I believe that manufactured products and service personnel must be originated from the main ALDI branch which is located in Germany as a start-off point when ALDI is introduced in Java Island, Indonesia. This will bring about the originality, value, culture and standardize way how ALDI is run and managed with reference to their core purpose that they stand firm on of providing value and quality to their customers by being fair and efficient . Vis a vis, internationally in all 17 countries that ALDI is established in. With the vast increase of demand for goods by the Indonesian consumers to meet their daily needs, the introduction of ALDI in Java, the most populous Island in Indonesia will be expected to gain a wide acceptance as a whole new level of an advanced retail concept is introduced. It is important that the basic standard and concept of how ADLI works as a retailer that emphasize on value for money deals and convenience purchase is introduced right since the beginning to the Indonesian society. According to (Wikimedia Foundation, 2012), foreign supermarkets that are operating in Indonesia are Carrefour (France), Giant (Malaysia), Marks & Spencer (England), 99 Ranch Mart (Taiwan), Lotte Mart (Japan) and Hypermart (USA). Therefore, I do foresee ALDI as a well established retailer that covers a wide range of goods be able to get an overwhelming response from the society at large.

In the long-term point of view, I would strongly encourage ALDI to start engaging themselves to countries that is able to manufacture their goods at a lower price with the ability to

10


be in full compliance with all applicable national laws and regulations, industry minimum standards, International Labour Organisation (ILO) and United Nation Conventions where they are consistent with national law, and/or any other relevant statutory requirements set by ALDI (ALDI.co.uk). In this case, China, Hong Kong, Malaysia or India will be the best countries that ALDI in Indonesia can outsource their manufacturing of goods as it can be seen as a more practical and higher profitable prospect due to factors such as lower prices, shorter distance to travel, cheaper labour and being in the ASIA continent.

Moving on, service personnel who are heading ALDI in Indonesia should be run by more experienced and established directors who are more well verse will the operation of ALDI and be supported by several right hand men from their home country. This style of management should be cultivated because of the originality of ALDI from its origin, therefore, working hand in hand to building and making ALDI a successful retailer in Indonesia. Good relationship and network between both parties is the fundamental step in the progress and advancement of ALDI in Indonesia being their 18 international outlets. In addition, the service personnel will be better off when working alongside time physically in Indonesia so that guidance, support and instructions can be delivered in a more effective and efficient manner.

VIII) Entry Mode Indonesia is the largest economy in Southeast Asia and also a member of G-20. Is the target market for ALDI. And dispensed to where you can achieve great results that will benefit the company. Given the policy of ALDI, high quality-low prices, Indonesia is a large market for the expansion of ALDI. The most appropriate method to reach this market is investment entry by wholly owned subsidiary.

11


ALDI has two options, on one hand, the creation of ALDI Indonesia from scratch (Greenfield project), which would need more capital investment and risk, high-investment brand positioning, achieve market acceptance and compete against with large companies without knowledge of local market, because everything must go it alone without the help of a partner. On the other hand, the option to purchase at least 51% of a local retail, which is well established in the market, with extensive knowledge of local market, acceptance and brand recognition there and can help the company to be competitive and to face competitors such as Carrefour. Given the high costs and risks that is entering a new market; find a partner that will allow better acceptance is a good choice. So in pursuit of this partner and taking into account the market leaders and similarities with ALDI, Hero can be a good partnering in this process. Hero is one of the largest retail in Indonesia and was founded on August 23, 1971. Currently, Hero has grown and is able to meet the medium-high market, delivering the best fresh foods and the best quality grocery products, not only through products manufactured or harvested locally, but also those which have been imported from the manufacturers worldwide.

ALDI being one of worldâ&#x20AC;&#x2122;s largest

12


retailers, has the ability to make an excellent proposal to Hero, reaching a large percentage of the market when ALDI enters to compete, minimizing costs to position a brand that is unknown in Asia. Although the brand Hero tends to disappear to give greater importance and strength to ALDI, this would be the engine to achieve a good market position in Indonesia and to cope against with his great rival Carrefour. The advantages of this mode should be greater knowledge of local market, can better apply specialized skills, minimizes knowledge spillover and can be viewed as an insider. But the disadvantages are higher risk than other modes such Franchising, requires more resources and commitment and may be difficult to manage the local resources. This mode should give ALDI control of the whole business, preserving its way of operating in international markets. Also the Conditions favoring on this mode are assets cannot be fairly priced, high sales potential and low political risk in Indonesia. Also the market size is big, production and shipping costs are cheaper there than import and ALDI has a good international experience to do it.

IX)

Staffing All operational staff will be hired in Indonesia, in order to create market linkages. On the

other hand if it comes to negotiations with Hero, ALDI will keep all staff who works with them. In developing the project, ALDI will use all personnel required to operate as the same way as it does in the international market in Indonesia. Therefore, it will generate employment opportunities for some people. The caliber of the people in the company will be the only source of sustainable competitive advantage available to ALDI. On the administrative side, ALDI will use ethnocentric or global staff from headquarter, in order to keep the culture of the company in Indonesia. Ethnocentric stall will be familiar with

13


company goals, products, technologies, policies and procedures of the company. They know how to get things done in the headquarters and could apply and teach those things in Indonesia market. Also they can use Global manager because they should be more cultural flexibility solving specifies problems and to management all compromises between locals and headquarters. This policy of using expatriates as administrative staff will not be for long, because of two important aspects. First, the lack of opportunities to reach senior positions for local employees and second, Expatriates could have a poor adaptation in Indonesia due to cultural differences. The selection of personnel for overseas assignments is a complex process. Therefore, ALDI will hire staff as needed and with highly qualified and good values in order to provide a good services with the right people in the right job. Once candidate pass the selection process will be given excellent training to develop the best work that the employee can do and being with constant support from all staff.

X)

Marketing The company should hire new personnel and use current employees. When opening up a

company in a new location, it is a good idea to keep the personnel that was originally there. That way there will be personnel there that already knows how the company operates. These individuals will be able to give insight on how the business should operate. It is also important to hire new personnel as well. This will bring in new ideas for the company. It will also help because it is always better when someone from the outside comes in and looks at something on the inside. The company should hire people from any denomination or geographic location. It will help if they bring in international people because diversity is always good in helping to develop a company in a new location. When the company starts to hire new personnel

14


XI)

Payment Arrangement ALDI, like virtually every other grocery retailers, operates on a cash basis. Customer

payment is due at the time of purchase of goods. Keeping track of accounts receivable (as would be necessary if goods were sold on credit) would be an impossible task if hundreds of new accounts were to open every day. This is the best way to operate given the nature and volume of sales made by ALDI. In fact, it is only recently- within the last 8 years- that ALDI accepted anything other than cash as a form of payment. However, ALDI only accepts credit cards in Australia; in other countries a debit check card is required. Because this model has proved successful for ALDI in other markets as well as the grocery industry, this is the model which will continue to be followed in the new Indonesian markets. This can still be seen as an area for growth however. The practice of accepting credit cards is one which can expand your customer base as well as may encourage existing customers to spend more. ALDI can realize this by accepting credit cards in the newly opened Indonesian markets. The credit card market in Indonesia is growing according to the Indonesian Central Bank. As recently as January of 2011, the Central Bureau of Statistics estimated there would be 104 million new Indonesian credit card holders with 13.4 million new cards. The growth numbers for credit are astonishing and continue to grow. With the worldâ&#x20AC;&#x2122;s fourth largest population and many new credit cards in circulation every year, ALDI could seriously benefit by accepting credit cards in the new Indonesian markets. A challenge which ALDI will have to deal with the different currencies of Indonesia compared to the existing markets. This will require working closely with experts and individual familiar with the Indonesian Rupiah. In depth knowledge of the currency and its exchange rates will play a big role in price setting and business decisions which involve costing. This is challenge

15


that will be important to handle however is manageable by working with experts and people with experience in Indonesian Rupiah.

XII)

Capital Raising capital for the expansion of ALDI will prove to be a tall task, but one that is

certainly viable with many options. Entering a new market is undoubtedly an expensive and risky proposition which requires funding from several sources. We propose that this funding come from internal sources as well as external sources. The diversification of sources of funding is ALDI’s best alternative as it reduces risk of loss. According to Deloitte, ALDI’s revenues exceed $58 billion. ALDI can use some of the funds from their revenues and invest long-term into the expansion. This form of funding is attractive because it requires no approval from creditors, is easier to obtain, and will pay off in the long-term in the form of additional revenue while not accumulating debt. Although investing from within is a great option, ALDI cannot ignore the benefits and opportunities of borrowing from Indonesian banks. While this may bring about some risks, we believe the opportunities outweigh the risks. Recently, Indonesia credit rating saw quite an improvement according to its Fitch Ratings. Low government debt, stellar economic policy and growth all contributed to Indonesia being upgraded to what the firm refers to as “investment grade”. Indonesia is Southeast Asia’s largest economy and this type of growth is very attractive for a company looking to expand its operations. "An upgrade amid deteriorating global economic conditions shows declining investment risk, which will make [Indonesia] more attractive for capital inflows," states Hartadi Sarwono, a deputy governor at Indonesia's central bank. Indonesia suffered a setback in 1997 when most Asian countries saw a downfall in their economies. The

16


workforce in Indonesia is also very strong. As stated above, Indonesia boasts the fourth largest population in the world. Indonesia offers a great combination of financial capital as well as human capital. Anytime a large investment is made abroad, tremendous risk is involved. The risks, of course, come with great opportunity. Some challenges are overcoming barriers such as resistance to foreign companies taking away from the “home” companies, volatility of international markets, and uncertainty of international economies. Research would indicate that ALDI’s concerns should be quelled by the growing strength in Indonesian markets, strong economy, large workforce as well as ALDI’s own extensive history in the industry

XIII) Possible Challenges As previously discussed, ALDI will be entering a market where they currently do no occupy. There will be many challenges in taking on such an endeavor. All of these challenges must be addressed and met head-on. Among the obstacles which ALDI will have to navigate are unfavorable responses from consumers who are skeptical of a new grocery store, managing risk associated with uncertainty, volatility of an unstable economy, and increased competition in the form of wider array of competitors. The most important thing to remember is that these are simply challenges, not game-stoppers. ALDI offers top notch products are very competitive prices. ALDI’s low-cost, low-price business model has stood the test of time and in many companies. Continuing their well-established place in the grocery industry will prove to be a feasible task if they stick to what has worked for over 50 years. Regardless of the challenges they will encounter, ALDI will continue to be strong.

17


Bibliography http://www.sea-eu.net/asia/info/4/indonesia.html http://www.g20.org/en/g20/what-is-the-g-20 http://hero.co.id/en/homepage http://www.aldi.us/us/html/company/5561_ENU_HTML.htm?WT.z_src=main

http://www.thejakartapost.com/news/2009/11/10/retailers-expect-recovery-next-year.html http://en.wikipedia.org/wiki/ALDI

http://www.thejakartapost.com/news/2009/11/10/retailers-expect-recovery-next-year.html http://en.wikipedia.org/wiki/List_of_supermarket_chains_in_Asia (ALDI.co.uk)* http://www.aldi.co.uk/uk/html/company/14339.htm

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 Team # 221  Client (Company): Starbucks

 Product/Service : The service is a mini library inside Starbucks stores. The main purpose of this service is to provide the customer with unique and relaxing experience. In addition, it is a way to make customers spend more time and money at Starbucks stores.  Number of pages: 27  Team Members:

Name

Anood Alnuaimi

Country

University

UAE

American University of Sharjah Telkom Institute of Management University Rey Juan Carlos University of North Carolina at Greensboro Escola Superior de Propaganda e Marketing Taylor's University

Asri Ainindita

Indonesia

Beatriz Garcia Escribano COzge Duyul

Spain

o nDaniel S. Mayer Da tSilva e Siti Ruzila Binti Ahmad

USA-NC

Brazil

Malaysia

Did Not Participate (Please make a note if this teammate did not contribute during the project, has not replied to emails, etc.).

All members are active


Table of Contents Subject Executive Summary

Page 2 3

Introduction 1. PRODUCT/SERVICE

4

2. Target Market

5

3. Consumer Segmentation

6

2.1 Strategy: Differentiation

4. Production site or personnel location

7 8

5. Entry mode

9

6. Staffing

12

7. Marketing

12

7.1.1 PEST Analysis 7.1.2 Porterâ&#x20AC;&#x2122;s 5 Forces analysis 7.1.3 SWOT Analysis 7.1.4 Marketing matrix 7.1.5 Marketing mix 7.1.6 Competition 7.1.7 STARBUCKS PRODUCT LIFE CYCLE

8. Payment arrangements

14 15 15 16 17 17 18 18

9. Capital

29

10. Challenges

21

Conclusion

23

Recommendations

23

References

24 1


Executive Summary In creating this business plan, we first determined our specific service to be offered to an existing company. Here, the we choose a new library service in addition to the existing business for Starbucks Stores. Then we selected the target market, and choosed London as our first location before we develop the idea toward European market. In order to clearly focused on our target market, the we then divided them into several segments, and selected the age range of consumer segments between 18-27 years old. In order to better understand the external and industrial environment that may affected the business process, we used PEST, Porterâ&#x20AC;&#x2122;s 5 Forces and SWOT analysis to understand the strengths of Starbucks in the current market and find out the threat and opportunities in order to develop this marketing strategy. This SWOT analysis then resulted into marketing mix that influence the strategy that will be used to compete in the market. We also analyzed the financial sector which is clearly reviewed possible sources of external and additional funding that are capable to support business process, the payment arrangements.

2


Introduction Starbucks is a worldwide brand responsible for serving good quality coffee, known for their slogan "The best coffee in the world". In addition, they are also known for socially responsible and care about the environment. In 1971, first Starbucks store was opened in Seattle. Since then, the company enjoyed a positive growth and today it operates globally. Starbucks is not just a coffee company, they also offers other products such as snacks like; muffins, cakes, cookies and non-caffeine beverages too. Starbucks is a company that offers variety of products; their clientele are not just focusing on coffee lovers. Customers are very diverse from all ages. Main customers are ranges between 18-27 years old. This is a mixture of student, working adults and business people. Starbucks had been expanding rapidly and adapting to the tastes of worldwide customers. They are also sensitive toward demand, social and technological changes, an example; free in-store internet service (WIFI) which allows customer to work while enjoying the coffee. This makes Starbucks as one of a favourite choice for business meeting. Starbucks understand that their service has gone beyond just serving a good coffee. Customer satisfactions seem influence by the environment of the stores itself. We are looking at this situation as an opportunity and would like to enhanced experience for Starbucks customer by introducing a library in every stores. This will starts with European continent with London as our first focus. The proposal of this extended in-store library service will start in London. The idea is for customer to enjoy their coffee with an option to read a book and relaxing.

3


1. PRODUCT/SERVICE The idea of our project is to offer a library service at Starbucks stores in London, UK. The new service would offer the Starbucks costumers a new coffeehouse experience. While they consume the traditional Starbucks products, foods or drinks, they will have the opportunity of enjoying their time reading a book or studying with a great variety of used and second hand books, not forgetting the best sellers. If they want to continue reading their books at home or anywhere outside the store, we will offer a rental service for them. They would have to pay an extra fee for it and would have the right to keep it for 3 days and after that period they could return it to any Starbucks store with the library service. “Our stores are a welcoming third place for meeting friends and family, enjoying a quiet moment alone with a book or simply finding a familiar place in a new city.” (Starbucks UK Company Profile, 2011) This new service don’t seek profit with it, but to extend the time that the costumers spend in the coffee shop making them to consume more Starbucks products, making it all part of a new Starbucks Experience. The money earned on the book rentals would be an extra. The reason to choose London is that UK is ranked top-5 of the most active readers per country. The investment wouldn’t be high, because the costs of buying the books would be very low, since most of the acquired books would be used or second hands. Other costs would be bookshelves to place the books and a new staff. We would mostly offer used books, as they are cheaper to buy, and some of the most popular bestsellers. To decide what gender of books we could mostly offer, a survey with the costumers to see their favorite book genders could be helpful. The books would be displayed at bookshelves placed at the store walls for the costumers to have easy and total access to

4


them, similar to the ones in the images below:

2. TARGET MARKET Itâ&#x20AC;&#x2122;s meaningful distinguished marketing trend by Starbucks to deploy a mini library among their 50 London branches. Visualizing such unique service we can clearly see the utilization of each store library by the loyal coffee consumers. It's branded that London is the European hub of higher education. According to the official London University Guide, London has 46 universities structuring the prime attention of higher education in Europe. Not to forget that United Kingdom has an outstanding literacy 5


rate. According to the well known data base in the united States the â&#x20AC;&#x153;data 360â&#x20AC;?, 99% of English people can actually read and write which explains the strong habit of reading they have within them. Moreover, the Guardian newspaper approved that by stating the high ratio of library enthusiast and the passion of reading among the UK citizens. Therefore, we can conclude that London will be a great city to launch, this new mini library service within the store. Among other cities, London would be more open to the mini library.

3. CONSUMER SEGMENTATION We divide our market segments into 4 type ages segments. All of them are going to utilize the upcoming service of the Starbucks marketing differentiation campaign. First, the people below 18 years old (students and teenager), 18-27 years old (working adult), 28-37 years old (young entrepreneur), and >38 (moderate people). Nevertheless, we believe that people in between 18-27years old are the most promising customers, since they have more spare time and money to spend than students, young entrepreneur, and moderate people. In fact the mini library does not follow a specific standardized title index; each library is going to contain a different list of titles based on specific principles. For instance, Starbucks located close to university obviously would hold a list of recognizable academic titles alternatively to a store located at fashion district would hold the latest issues of fashion magazine and articles. The competitive advantage of Starbucks marketing advisor is tried to attract non- loyal coffee addicts. Increasing the current market share is going to be by satisfying the need of the current loyal customer and targeting a new segment. Dedicating a mini library at each Starbucks store can easily appeal to any customer while walking in a verification of commitment toward the community by Starbucks management. Young entrepreneurs are very inflexible to convince cluster due to their high 6


level of thinking and the complexity of meeting their expectation. For instance if an attorney whoâ&#x20AC;&#x2122;s loyal to Starbucks early morning black coffee he would expect the library to hold among its titles list a specialized law articles.

Strategy: Differentiation Dr. Hill C., and Jones G. stated in their book the Strategic management an Integrated approach that â&#x20AC;&#x153;Differentiation is a competitive business strategy whereby firms attempt to gain a competitive advantage by increasing the perceived value of their products and services relative to the perceived value of other firm's products and servicesâ&#x20AC;?. Starbucks has an outstanding position among its competitors, and its customer enjoy not only it coffee but the whole experience in its stores. (Bhaskar C., 2009) In our case deploying a service line parallel to a flourishing business relaying on an essential product will guarantee a win-win strategy. It's clearly alleged that the upcoming mini library service would result a great impact and impression among the current market share and would attract potential new customers due to their high interested in the upcoming service which is been provided by Starbucks . In addition, adding such service within 50 branches necessitates a feasible deliberate plan with a proper retrain over investment approach. Details on setting up a mini library at every store will require an exclusive layout, content, in-house location and fine selected titles index. What we are trying to explain is that it's going to be a challenging proposal toward being handled by the marketing and the operation department. Unless such service been outsourced to a specialized firm toward running the service under an international library standards which requires registration , inventory check up , members rental services along with the validation of the memberships and tracking the assets of the library . Starbucks mini library competitive service meets the term of ordering ease and delivery due to the lack of lead time which every service require being ready to be delivered 7


to the customer. At the library scenario the customer who's responsible for the lead time which eliminates this concept from being a drawback at the level of the library service at Starbucks store. More to mention delivery is another main aspect of the service differentiation list and yet again customer is responsible of making the service ready to be delivered. Customer consulting is a critical characteristic of the mini library service quality due to the subject of title in hold of each library out of the 50 stores all over London avenues and districts. Understanding the requirement of the customers is a main challenge which should be interpreted during primary stages of building up the mini library service characteristics. Additionally, the market demands Starbucks to maintain the quality of the place rather than focusing on the end product. An experience of the environment is the main attraction of Starbucks Stores, apart from the quality coffee itself. Starbucks offer freshly brewed coffee, espresso, cold lattĂŠs, frappuccino, whole beans, light snacks, and fine selected titles and articles.

4. PRODUCTION SITE or SERVICE PERSONNEL LOCATION As we have described, our idea of a new project or service is focused on providing library service in Starbucks. Our first location will be the Starbucks within London. London is a very important city in the world; it has many shops with high volume of sales. Londoner likes fast-food and Starbucks is one of the city favourite coffee stores. We selected this location because it is a very modern, fully developed with all facilities and amenities. We think this is a very attractive and well designed touristic city that will allow us to hear from other people in the world and according to their degree of satisfaction, and to decide later on either or not to implement it in other cities.

8


To offer this in-house library service, firstly, a modification of the space is required. This is to offer a library looking environment and this will create more space so you can display a wide variety and selection of the best books. Our staff will be changed as to maintain the library service and make the staffs to be more focus on their work. We will remain the same waiters we have in the establishment and hire only for London citizen, in order to reduce the high unemployment as the impact of high level inflation rate that occured in London. The difference is that now not only serve coffee, but any or all of them will be related to the library service and support to serve our customers. We will try Starbucks staffs become interested in the world of reading and to know or report on some of the books we have at this moment in the establishment and they are able to advice clients. For proper selection of books, would be necessary to hire someone to take care of going to the library and establish relationship with various suppliers in order to have those books and that the current bestsellers or interesting, both locally and globally.

5. ENTRY MODE Our library services will be an additional services provided to the Starbucks customer focusing in London. This service will enter into the market through wholly owned subsidiary under Starbucks Corporation. The control of daily management, physical assets, tacit expertise and knowledge, and control over codified assets will be under Starbucks. We would see this as an addition to the business and similarly, it would be indirectly affected by political, economical nor financial environment. Every library will be solely depending on the Starbucks stores as it will acquire some space from the store itself. Any unstable external environment that will affect the store operation, will be indirectly affecting the library service in this matter. Since the start of the first London stores in 1998, Starbucks had established 770 stores throughout UK and Ireland. 9


However, due to the major recession in 2009, Starbucks lost £47 millions in just one year (Prynn, Jonathan, 2009). Unstable economy conditions does affect business including coffee business and at the same year Starbucks had to closes more than 100 stores in UK alone (Starbucks bounces out of recession by trebling profits, 2010). However, Starbucks has experienced an increase of 3 times the profit in 2010, right after suffering the big recession (Starbucks bounces out of recession by trebling profits, 2010). Today, in 2012, Starbucks enjoys an increasing profit with a further planning of expansion (Wood, 2012). Therefore, we found that this would give us the best opportunity to enter the market, as the economy has rebounce from recession and started to stabilize. Furthermore, we oversee that Starbucks growth will keep increasing in the next 5 years and this would give us an ample time to establish our library concept in London and moving to other European country. This fresh new library-café concept would potentially boost the number of customers and increase Starbucks’ market share in UK. We see this as the perfect location to start, as it is part of our European market strategy. The reason is that, London would be the best suitable location due to the demographic advantage because of the multicultural mixes in the city. Additionally, Londoners are mostly well educated and many take up reading as their habit during free time. We look at this habit as the opportunity to penetrate into the European market. Our effort to enter Europe market through London goes well with the locals that had been working hard to promote reading within the community, this can be seen on; “3 borough in London (Westminster, Kensington and Chelsea and Hammersmith & Fulham) councils will commission a London Routemaster bus on the evening of Monday 23 April to showcase their wide range of libraries, all of which are to remain open, even in these tough economic times” (World Book Night aboard double decker bus, 2012), “a free event taking place at the 10


Watershed on World Book Night on 23 April, to celebrate reading and books; ticket holders will receive free books on the night which they are encouraged to read and pass on to spread the joy and love of reading” (Guide 2 Bristol, 2012) and “Some 20,000 passionate booklovers will today give away 500,000 specially printed copies of 25 superb books in their own communities” (Why i'm giving away million books, 2012). Located at more than 50 countries and operated at 17,244 stores worldwide (Harrer, 2012), Starbucks definitely has the competitive advantage in term of numbers of locations, with this numbers; it could be the starts of the new trend for other coffee shop. The additional Library service can be seen as a strategy for elevating customer’s experience with Starbucks. The library service could enjoy the existing of Starbucks Rewards Card. This will make our additional service introduction to the existing customer easier. The library service can be added into this reward system and work well with the arrangement of the library book borrowing. The rewards card can be use to borrow every book. (My Starbucks Rewards). Subsequently, Starbucks has a strong market capitalization, this is another advantage that we will take as our opportunity using the internet. The brand itself brings a very high traffic which can be useful to us as a leveraging tool to compete with alternative formats and independents. We look at this as another mode of entry to the market (International).

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6. STAFFING Library Manager Technical service manager

Library assistant

Purchasing assistant

Administrative coordinator

Information Resource coordinator

Back up and restore data (data storage)

Library Loan records

Billin g

We are suggesting to hire new employees for managing the new library service. Our preference is to hire local and other nationalities candidates. We will have an opening of full time for managerial positions and part-time for the library assistant. This will separate the operations of the coffee shop and the library itself, this way staffs will be more focus on their individual task. Parts of the reason why we choose a local employee is to reduce the unemployment level that occured in London

7. MARKETING We offer a new additional library service for every Starbucks store within London with a wonderful architecture concept and the various types of book stocked, ready to be read and lend. We believe that by providing new library service for UK Starbucks (London) , it will automatically increase the number of visitors to come to our stores. If we look at the 12


CIFFA survey, october 2011, it is stated that books are read in 90 per cent of UK households. Reading as a free time activity engages 66% of the population, making it more popular than gardening (48%), going to the cinema (49%) theatre and concerts (42%) and visiting museums and galleries (32.6%). In addition, the latest library status from UK government survey shows that public use of libraries has held relatively steady since 2008, with around 40% of the population using their local library. An astonishing 76.4% of 5 to 10 year olds use the library. Compared to other cultural facilities, libraries are used by a high percentage of people from deprived areas (39.8%). Those surveys as above, clearly described on how important reading is in UK citizen's lives. Around 65.8% of adults cite it as their main free time activity compared to going to the cinema or gardening - highlighting a big opportunity for libraries to introduce readers to the new look library reading service. Library also have the image of gathers the community together, by creating a comfortable seating, internet access, coffee, a cookie and also friendly atmosphere of Starbucks staffs are including as our offerings to the customers.

Up until now Starbucks is still the market leader, but since 2007, Costa has more outlets 13


7.1 Macro Environmental Analysis 7.1.1 PEST Analysis stands for Political, Economic, Social, and Technological analysis. It is used to describe macro environmental factors that may affect the running business process in an organization/company.

Politic and Legal

 Coffee are highly discussed and being enjoyed in developed countries. Political issue affects the taxes and tariffs.

Economic

 London has a highly developed economy with a high standard of living

Socio-culture

 Increased population affects the people spending on more and more coffee, customers don’t only come to coffee shops to drink a coffee but also to relax and spend their leisure time.  The higher level of education of the citizen in London influences the reliance on internet access and book reference whether for studying, working or any activities to support their daily activity.

Technology

 Using the latest technology will affect to pricing which can be cheaper for coffee machine, and for the latest internet technology will help Starbucks to support their store with fast wirless network and fast speed of data transfer.

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7.1.2 Porter’s 5 Forces analysis

providing the latest technology machine, since there are less suppliers that produce

Low threat of new entry, as there’s less

NEW ENTRANTS

High bargaining power of supplier in

opportunity and big capital to compete with the coffee market leader

such equipments.

(Starbucks) and the most favorites coffee shops (Costa Coffee) in London.

SUPPLIERS -Hot coffee

Competitive Rivalry Many competitors with little differentiation. Ex: (Costa coffee, Caffe nero)

BUYERS

-Tea

High bargaining power of buyers,

-side-walk cafes

SUBSTITU TES

-“Quick-grab” drinks in supermarket

since currently there are so many new competitors sell in lower price.

7.1.3 SWOT Analysis For situation analysis we refer to SWOT analysis to see what the strength of the Starbucks in the market is and what are the threat and opportunities in order to develop marketing strategy.

SWOT ANALYSIS

Description  Convenience atmosphere

Strength

 Friendly Starbucks staffs  High class products always followed by the high quality  High price

Weakness  Have less amount of stores, compare to costa coffee

15


 Producing new products (Isntead ofwhat Starbucks already have)  Provide more and more sophisticated coffee machines Opportunity

 Provide a unique strategy in supporting new services that other may not have  Proivde better new technology, fast speed  Less perobability of the new company to exist in London.

Threats

 Competitor rapidly builds more coffee shops in one city

7.1.4 Marketing matrix

Based on analysis of SWOT above, it can be concluded that the combination of analysis of Strength and Threat of Starbucks. It is very important to rack in the context to meet potential market with apply innovation Strategy which is emphasize new product in new market.

16


In this strategy, we will consider the marketing mix, which are 4Ps (product, promotion, place, price). 7.1.5

Marketing mix

Product  brewed tea  chocolate, frapuccino, espresso beverages

Price “We don’t want to be price leader – We serve more for more“

 filter coffee  muffins, pastries and doughnut  fresh fruits, sandwich, cookies Place  Board which shows Starbucks suppliers

Promotion  Cross up selling

 Free internet access for customers

 New productsinnovation (beverages and foods)

 Great architecture and furniture

 Charity

 located in developing areas  Library room with various book stock 7.1.6 Competition

Starbucks

HIGH P R I C E

Costa Coffee Caffe Nero

LO W LO W

QUALI TY 17

HIGH


7.1.7 STARBUCKS PRODUCT LIFE CYCLE

Starbucks company in London has greatly performed in market. It is proven by the products which are all instantly become successful. The mature development of the latest technology of their coffee machine and the system support to increase the satisfaction of their customers and more profits will follow. The number of sales also increasing as the demand increases. This may lead the competition in the market even tighter. Therefore, in order to make difference, win the competition and enhance the customer comfort, we are planning to create unique startegy, that is library. 8. PAYMENT ARRANGEMENTS The payment arrangements for Starbucks coffee shops with the mini library service would vary from costumer to suppliers, partners or distributors. For the costumers, the payment arrangements would be through Starbucks Reward card, cash and credit card, since they would only need to pay for the service if they want to rent the book, and it is the same payment methods as they use for the usual Starbucks products. Another option to consumers is to use the Starbucks Card paying with the My Starbucks Rewards, this is an easy way for the registered consumer to use this service. The

18


other costumers have the option to use the Gift Cards, otherwise they will have to do advance payment to secure that they would return the books to Starbucks. For the suppliers and distributors, the book stores, the best payment arrangement for Starbucks would be credit card, open account deposit or even cash, as the books would be bought used or second hand books, their price per unit would vary from 1 to 20 pounds. This agreement would be done with the supplier because you can buy the products online, at the store or some other method the book stores would have. If they want to continue reading their books at home or anywhere outside the store, we will offer a rental service for them. They would have to pay an extra fee for it and would have the right to keep it for 3 days and after that period they could return it to any Starbucks store with the library service. 9. CAPITAL Starbucks is the largest coffeehouse company in the world, with 19,555 stores in 58 countries, including 12,811 in the United States, 1,248 in Canada, 965 in Japan, 766 in Great Britain, 580 in China and 420 in South Korea, for an increase in 0.4%, 0.6%, 0.7%, 0.3%, 2.1% and 4.2% since April 5, 2012, respectively. Starbuckâ&#x20AC;&#x2122;s second quarter results to the impact of innovation and the success of effort to dramatically transform the business over the past two years. Outside the U.S., Starbucks reported revenues of $534 in the period a 23% improvement. So, it is a brand which is operating all over the world. There are many strategies that Starbucks implemented in order to get high profits. One of strategies is selling more stores to franchisors. By adding new product value to starbucks in form of library service, it will attract more people and keep them more in the store. The more people come to the store, the more sales will increase. Since starbucks is powerful in financial, Therefore, it is best for starbucks to use its own cash as a capital to provide library service in the stores.

19


The powerful performance of starbucks’s financial makes starbucks doesn’t depend much on creadit. But starbucks might use bank loan, if the case, their capital is not sufficient. As for instance, the cost of providing library services will be around 1.000.000 dollars which will be spending for our new service as well. Therefore the best way would be using 70% of our cash and better hold the rest of them (30%) to be used to get credit form the bank. On the other hand, refers to the current U.K‘s inflation in real terms is around 3.5%. If we decide to put these amounts of money into government treasure bills it will lead to decrease the value of money. On the other hand, If Starbucks uses their own cash in hand, the bank is going to charge it over 2% interest rather than getting credit form the bank which is going to charge the company over than 4% interest. Therefore for this case, we will primarily use our own cash, which will lead to obtain benefit for us. As a Starbucks operator, we would have been used company’s equity if it goes sufficient, because our money would be less costly. Starbucks Corporation (SBUX) 59.16

Starbucks has a great market share. In terms of company policy it could export of its shares and stocks. Starbucks market share price has gained value. We are profitable company and have very profitable shares therefore we would rather spending our cash in our hands instead of selling company’s shares in the market. What if Starbucks was a not also non-

20


profitable but also a debtor company? We would definitely sell our shares in the market to get cash. Briefly, when the cash is required; using bank loan would be less expensive than the sale of fund or stock. As we already mentioned about how much Starbucks is profitable company and have ready cash to use it at any time. For this reason capital is not hard to create. Therefore we may not have any challenges of raising capital to develop our new service that we are proposing. Because if your financial position is good enough to afford you will not be in trouble in borrowing issues and also the company can find a joint venture, partner or shareholders easily. At the same time, banks provide low-interest credit. If it had the opposite, we would have to sell our shares at a lower price than it needs to be. We would be in trouble to get credit easily from the bank. Even if it happens they would charge us to pay high interest on credit. 10. LIKELY CHALLENGES This new additional services within Starbucks Stores may bring some possible challenges that will require attention and solution. Firstly, one of a problem that may occur is our ideas being stolen by other coffee competitors. If it occurs, cheaper coffee stores might be more successful as they provide not only cheaper products but also provide books, daily newspapers etc. for their customers to help them relax. The students may prefer to spend their money on cheaper products without considering the quality. To prevent this, we will have to ensure that Starbucks stores are having best environment for customers. As Starbucks are not in the market for a cheap coffee seller, pricing strategy from other competitor will not affecting us as much as long we are focusing on customer experiences during their visit to our stores. Secondly, other challenges might be the loss of offered books. Even though Starbucks takes precautions with the security system, we are expecting that some of the book might get

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lost due to the high number of daily customer. This could happen because of the act of intention or just by accident. In this situation, we decided to combine with Starbucks Reward card that already exist. The reward card system already has customer vital information includes the amount they has in the card itself. This would be the safest system as the customer who has the card is a loyalty based. This will reduce the chances for the books to get lost when borrowed by customer and if itâ&#x20AC;&#x2122;s so, some penalty will be deducted through the card itself. Thirdly, in the support of environmental friendly business environment, some of our books will be sourced from a recycle book stores. This is part of our solution to the challenges from environmental issues. Fourthly, London is one of the highest numbers on literacy level. Thatâ&#x20AC;&#x2122;s mean, people in London are used to reading environment and it is part of their habits. This situation will have impact of the demands for the types of books requested. To solve this consumer preference issues, we will distribute a survey form and to get the type of books that will be on the most requested list. This way, we will save our time to choose or buy books for the library.

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Conclusion: After looking back on all the project done it seems as though the business plan is fundamental to running a successful business. It is very helpful in getting the business started and helping to find the potential base of Starbucks customer. However, the marketing analysis of the project is still the most important factor in opening up any a business owner can implement the best strategy to compete in the market. According to the marketing analysis, we believe that this project idea will be successfully implented, as the data shows the high level London citizenâ&#x20AC;&#x2122;s behavior in reading activity will directly support to the existing of our new service library idea of Starbucks stores.

Recommendations After completing this project, we believe that provides new library service for Starbucks on this days and age would be a great business move for anyone interested, especially for the London citizen. However, it is not going to be an easy job as there are so many coffee shops spread in London with their special price and quality offerings. By creating a unique strategy, provide new products innovation and deliver excellent service to the customer, we sure that it will improve the satisfaction of customers and profits will follow. For anyone interested in knowing the depth look of market condition and the competition of coffee shops in London, we recommend you to see the marketing analysis. And detail look of financial condition within the company and external funding will be explained in financial of capital analysis.

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REFERENCES 1. Adam Godsey, J., (2010). Organic Restaurant Business plan. Retrieved April 23, 2010. From digitalcommons: http://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1035&context=agbsp 2. Bureau of European and Eurasian Affairs. (2012). From U.S Departmen of State: http://www.state.gov/r/pa/ei/bgn/3846.htm 3. Capital raises price target on Starbucks 3rd April 2012 Daily Political.com Retrieved from , http://www.dailypolitical.com/finance/stock-market/williams-capital-raises-pricetarget-on-starbucks-sbux.htm 4. Costumer Service. Retrieved April 24, 2012, from Starbucks: http://starbucks.co.uk/customer-service 5. Curtis, Rolly. (2007). England plunges in rankings for reading. From The guardian: http://www.guardian.co.uk/uk/2007/nov/29/schools.booksnews 6. Data 360. Literacy rate by country. Retrieved April 21, 2012. From data 360: http://www.data360.org/dsg.aspx?Data_Set_Group_Id=599 7. Diversity at Starbucks. Retrieved April 24, 2012, from Starbucks: http://starbucks.co.uk/about-us/company-information/diversity-at-starbucks 8. Guide 2 Bristol. (2012, April 23). Retrieved April 23, 2012. From Bristol Watershed World Book Night event offers free books: http://www.guide2bristol.com/news/2079/Bristol-Watershed-Book-Night-event-offersfree-books 9. Harrer, A. (2012, Jan 26). Starbucks Corporation. Retrieved April 23, 2012. From the New York Times: http://topics.nytimes.com/top/news/business/companes/starbucks_corporation/index.html 10. Higbee, Z., Liaw, C. Y., Ting, C., Tjho, K., Ton, M. (2008). The Future of Starbucks. Retrieved April 23, 2012. From McAfee. http://www.mcafee.cc/Classes/BEM106/Papers/2008/Starbucks.pdf 11. International, E. (n.d). Cofee Shops in the UK. Retrieved April 23, 2012, from Market Research World: http://www.marketresearchworld.net/index.php?option=com_content&task=view&id=1 18&Itemid=77 12. London and Partners. Universities and Colleges in London. Retrieved April 21, 2012. From LondonTM: http://www.studylondon.ac.uk/universities 13. Manson, Emily. (2007). UK coffee market set to double over the next 10 years. Retrieved April 22, 2012, From Caterer. 24


http://www.caterersearch.com/Articles/24/05/2007/313851/UK-coffee-market-set-todouble-over-the-next-10-years.htm 14. My Starbucks Rewards. (n.d). Retrieved April 23, 2012. From Starbucks: http://www.starbucks.com/card/rewards 15. Our Company. Retrieved April 24, 2012, from Starbucks: http://starbucks.co.uk/about-us/company-information 16. Prof. Marty Rochester, L., Lewis, Knicko.(2006). Starbucks-Campaign-Market-Analysis. Retrieved April 22, 2012. From scribd: http://www.scribd.com/doc/9683015/StarbucksCampaign-Market-Analysis 17. Prof. Rodenberg, J., Marda, I., Nikić, S., Baturan, S., (2011). Costa Coffee vs Starbucks. Retrieved April 22, 2012. From Rodenberg: http://www.rodenberg.nl/publications/publications/COSTA_COFFEE_vs_STARBUCKS .pdf 18. Prynn, Jonathan. (2009, September 25). Starbucks wakes up to £ 47m loss in a single year. Retrieved April 23, 2012. From the Evening standard: http://www.thisislondon.co.uk/news/starbucks-wakes-up-to-47m-loss-in-a-single-year6734389.html 19. Small Business Resources (2010) Business Mark.com. Retrieved from, http://franchises.businessmart.com/how-much-does-a-starbucks-franchise-cost.php 20. Starbucks bunces out of recession by trebling profits. (2010, Jan 21). Retrieved April 23, 2012. From DailyRecord.co.uk: http://www.dailyrecord.co.uk/news/businessnews/2010/01/21/starbucks-bounces-back-from-tough-couple-of-years-by-trebblingprofits-86908-21984622/ 21. Starbucks Company Profile (2011). Retrieved from: http://globalassets.starbucks.com/assets/aboutus-companyprofile-q1-2011-final-3-811.pdf 22. Starbucks Corporation (SBUX). 2012. Retrieved from, http://uk.finance.yahoo.com/q?s=SBUX 23. Strategic management as Intergrated approach (charles W. L. Hill, Gareth R. Jones 6 ed 24. United Kingdom Inflation Rate. (2012). Trading Economies. Retrieved from, http://www.tradingeconomics.com/united-kingdom/inflation-cpi 25. WhitbreadPLC. (2010). Retrieved April 22, 2012, from Whitbread: http://www.whitbread.co.uk/whitbread/media/marketresearch.html 26. Why i’m giving away million books. (2012, April 23). Retrieved April 23, 2012. From Express.co.uk: http://www.express.co.uk/features/view/316050

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27. Wood, Z., (2012, Jan 26). Starbucks reports success at christmass-thanks to eggnog lattes. RetrievedApril 23, 2012. From the Guardian: http://www.guardian.co.uk/business/2012/jan/26/starbucks-success-christmas-eggnoglattes 28. World Book night aboard double decker bus. (2012, April 23). Retrieved April 24, 2012. From Kenshington and chelsea today: http://www.kensingtonandchelseatoday.co.uk/news/local-news/uye7lijve6.html

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X-CULTURE INTERNATIONAL COLLABORATION PROJECT Team # 222

Client: The Walt Disney Company Product: Development and construction of a brand new Disneyland Theme Park located in Dubai, United Arab Emirates

Team Members:

Name Paul Marino Areen Al Sulieman Leonardo Barrea Ayla Danuwidjaja Bosco Gullon Von Hui So

Country USA-NC UAE Brazil Indonesia Spain Malaysia

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Table of Contents: Executive Summary………………………………………………….. 3 Product/Service………………………………………………………. 3 Target Market………………………………………………………… 5 Consumer Segmentation………………………………………………6 Production Site & Service Personnel Location………………………..7 Entry Modes…………………………………………………………...9 Staffing………………………………………………………………..10 Marketing……………………………………………………………..12 Payment Arrangements……………………………………………….14 Capital & Costs……………………………………………………….15 Likely Challenges…………………………………………………….17 References…………………………………………………………….21

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Executive Summary: The thought of a Disneyland theme park may bring similar images to thought; no matter where their current locations lie (such as Tokyo, Florida, or California to name a few), in terms of architecture, visual design, or use of trademarked household Disney characters. The fact remains; every Disneyland Park or resort offers its own unique touches relating to the locationâ&#x20AC;&#x2122;s culture, demographics, and economy. This concept will remain strong for the following plan of opening a brand new Disneyland theme park located in Dubai, United Arab Emirates. With the initial goal of creating the largest Disney theme park in the world, this plan outlines the tentative processes and strategies Disney should consider and implement upon starting the project, including: target markets and customer segmentation, entry modes and production site locations, payment arrangements and staffing, capital and cost estimates, marketing strategies, and finally likely challenges Disney would face once development and production begins.

Product/Service: The running visual theme of the entire park will comprise of an exotic desert oasis theme for designs in architecture, decorative dĂŠcor, costumes/uniforms, and entertainments offered; catering to Dubaiâ&#x20AC;&#x2122;s very hot climate. Water rides and attractions will take up a majority of the entertainment features of the park, taking the burden off visitors having to walk long distances through the park in the sweltering heat. Palm trees shall serve as a constant visual staple of the exotic theme associated with the park. The use of traditional Disney characters will pervade the park by use of costumed performers interacting with visitors, but to add a twist there shall be some favorite Disney characters 3


costumed in traditional Middle Eastern clothing; for example, picture the character Cinderella clothed in a traditional Middle Eastern abaya. This type of cultural integration is one of the central characteristics of the park, creating a positive environment that would attract locals as well as the large population of expatriates Dubai hosts. The advancement of technology will also serve as a concept-theme in terms of state of the art rides, attractions, transportation, and exhibits. Several traditional Disney rides shall be placed in the park, but with modern upgrades in technology and interactivity. For example, the classic Disney ‘dark ride’ ‘It’s a Small World’ will be designed with new high tech animatronics for the characters that interact with visitors. Transportation through the park will be accomplished by a state of the art monorail system that can circle the park, stopping at any of the six themed ‘lands’ the park will feature. The goal of this plan for ‘Disney in Dubai’ is to create the largest Disney park in the world, which also means this could be one of the biggest economic opportunities for the Walt Disney Parks and Resorts division of the Walt Disney Company. Dubai was chosen due to its booming tourism trade, which seeks to attract 15 million tourists by 2015. With the help of this new Disney Park, Dubai can realistically and easily attract that amount, since the yearly attendance at Disney Land in Anaheim, California is 15 million visitors.

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Target Market: United Arab Emirates is a member of the GCC (Gulf Cooperation Council), which makes it an Islamic country, which is more considered to be a family oriented place. On weekends, many places where lots of gatherings may occur, such as Global Village, which is a closer version of Disneyland, attract mostly families whereas on normal days of the week anyone would easily visit. Our target market will mainly be family groups, because when locals go out to theme parks they go together. Families also tend to have lots of gatherings on celebrations and would go out together, especially on Fridays. This is because Friday is an official holiday in the UAE so people take an advantage of it to spend the whole day together. Targeting families also means that people of different ages would enjoy the Disneyland experience unless theyâ&#x20AC;&#x2122;re too old or too young (under 3) to enjoy the rides. Families getting together and enjoying their time is what we are aiming for. The rides available at Disneyland provide entertainment for children, teenagers and even adults. We can also see that Disneylandâ&#x20AC;&#x2122;s advertising brings up different commercials that are sometimes aimed at children and others to adults. Disneyland is directed to both the middle and upper class. Looking at the entrance prices to Disney parks, they would be considered over priced compared to other theme parks in the UAE. For example going to a water park (Dreamland) in Ras Al Khaimah (one of the 7 emirates in the UAE) reaches Dhs 135 per ticket for adults and Dhs 80 for heights under 120cm. On the other hand Disneyland would have an average price that 5


would reach Dhs 700 per ticket and above depending on the packages received which can be used for a couple of days or more. Even though prices are considered to be high in Dubai, the middle class can afford visiting Disneyland because doing so would be a lifetime experience that many people living in Dubai or in any other emirates who havenâ&#x20AC;&#x2122;t had the chance to travel for a visit to Disneyland will finally get the chance to do so, and people in Dubai tend to make the best out of their weekends visiting fancy places where the average individual spending in 2010 was estimated about $21,577 which is considered to be very high indicating a high spending power per each individual.

Consumer Segmentation: The consumer segmentation for Disneyland in Dubai, United Arab Emirates has some variable segmentation including geographic, demographic, psychographic, and behavior. The geographic segmentation consists of several units, based on the targeted consumer countryâ&#x20AC;&#x2122;s GDP levels. These targeted countries include Asian countries (UAE, Japan, China, India, Qatar, etc.), European countries (Switzerland, Netherlands, Norway, Spain, France, UK, etc.), as well as the United States and Canada. By implementing this geographic segment, Disneyland can attract international tourists from around the world, because of internationally recognized entertainment quality. Direct licensing from Disneyland in California under Standard Operational Procedure (SOP) was in international standard. The demographic segmentation consists of several categories: age and gender, income, job, and education. For age and gender, there are no limits, meaning people of any age and gender are prospective consumers. According to regulations in Disneyland 6


Paris, children under three years old do not have to be charged admission. This feels reasonable because children aged less than three years cannot fully enjoy the bigger rides Disneyland offers. For income, the middle and upper class would be the main consumer segment due to pricey admissions, although a minimum price of US$ 80 may be offered (for one day tickets) coupled with package deals for restaurants and hotels. For jobs and education, there are no limits or exceptions. As long as admission is paid for, anyone in the world can enter. The psychographic segment deals with the consumer’s life style and social class. The lifestyle of a primary Disneyland in Dubai consumer may consist of people who like traveling, going on holidays, finding a new experience, and especially people who go abroad. Related to income, the middle and upper class would again be primary consumer segmentation. Finally, the behavior segment should include people who know about Disney and regularly purchase Disney products or are fans of The Walt Disney Company.

Production Site & Service Personnel Location: The production site of the new Disneyland Park will be in Dubai, (United Arab Emirates) in a place called ‘Dubailand’ which is a global village that is actually working. The place will be manufactured there because the space for the construction (being the biggest park ever made) and the location it has, is close to the Emirates road which is a very big and famous road that connects many places of Dubai and is a road where a lot of new projects have been proposed as the global village. It is also around the Al Ain Road which is a highway that connects Dubai and the Ai Ain city. Besides these two famous

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and local roads is the airport a few miles away, which means a good number of tourists for the park and good transportation from the airport to the park by taxi will be a benefit. We chose Dubai because it is a special city and it has many reasons that make it different at this time: first of all the economy. Currently with all the bad economic times for the United Arab Emirates, Dubai has probably one of the biggest high income salaries in all the world, besides this if you are from Dubai by born in there you have a better income salary , which it mean business are good by there. Another reason Dubai is special is because of how exotic the scenery is and the special culture that attracts a lot of tourists, their buildings can be compared with New York Cityâ&#x20AC;&#x2122;s buildings because of dimensions and architecture. Dubai also has a very big sea where spectacular yachts and boats sail, which means luxury. One big fact against Dubai could be their culture: they have to dress according to Islamic customs and you may think they are very rigid with it but the truth is that foreigners can dress their own way and thanks to all of the tennis tournaments they have, celebrities and expectation came to the city two times every year which means tourists and people with money visit, meaning they could probably go to the Disney Park as an alternative. Also there has never been created before a Disney Park in the United Arab Emirates. In a few words, Dubai has the best specific characteristics that a place could ever have to create a Disney Park. This will be a product because you could consume whenever you want. 8


Entry Modes: Choosing an entry mode to achieve the proposed object isnâ&#x20AC;&#x2122;t a simple task, its necessary to analyze some key points about Disney, such as its positioning, image and perception. Disney is the biggest media company around the world, known by people for its storytelling capacity, their characters, and movies. But for customers, Disney means more than amusement parks, television shows, or books; it means a complete magical and fun experience that has no substitutes, mainly to children. Keeping this image strong and alive isnâ&#x20AC;&#x2122;t a simple task because it requires Disney to develop experiencing points of contact with its clients, as in they need to live and feel Disney. The solution found for this problem was building an amusement park, with themes and all Walt Disney characters, making real all the stories and characters created by this company. This strategy was so successful that their park in Orlando attracts visitors from all over the world and they were able to take the same concept to Tokyo and Hong Kong. But building an amusement park isnâ&#x20AC;&#x2122;t a simple or cheap task; it requires money, technology, and management capability. The main issue to build a Disney amusement park is the technology required: to build a magic environment and experience, it is necessary to apply many concepts of architecture, engineering and marketing, besides investment and people management. The degree of control, management and investment by Disney determines the entry mode in Dubai. The Walt Disney Company has ownership in most of its businesses: Resorts and

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Parks in Florida, California, Hawaii, Disney Vacation Club, the Disney Cruise Line and Adventures by Disney are wholly owned businesses and the company operates all of them. However, this strategy isn’t applied to all locations Disney started operating. Outside the United States, the company embraces different entry strategies: for example, Disney’s businesses in Hong Kong, Shanghai and Paris aren’t wholly owned, they developed it in partnership with other investors; and in Japan they licensed the operation. The main reason to use partnership as entry mode is the high cost of building a project like this one. When it was built in the US, the area in Orlando was a sleepy area, occupied by cattle and vegetation, making the area cheap. Also, Walt Disney acquired all the areas slowly, buying small pieces. So there, using a wholly owned business wasn’t a problem. However, in Dubai it isn’t possible because that city is developing itself very quickly and there will be no time to slowly obtain construction lots. It would be necessary to obtain all terrain at once, needing free capital to do so. As we estimated the cost of this project being close to US$4.5 billion, Disney wouldn’t afford to develop this idea. So, the best entry mode is partnership, so the corporation can share risks and costs. The first partner to look for is the Dubai government, so it would be easier to get licenses and free lands. Also, hotels could be really good partners because they provide lodgings for visitors of the park, increasing its revenues.

Staffing: Disneyland is considered to be multinational corporations as it uses and presents the characters that have already been created at the home country. Multinational

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corporations tend to create a well-based research and development plan before starting in a new place, which is completely true and fits with Disney Land because opening a new Disneyland is extremely important to make sure that it would fit with peopleâ&#x20AC;&#x2122;s preferences. For example, having a Disneyland in Saudi Arabia can be extremely tough and difficult due to the extreme paper work and social problems with women and men not being able to mix or be at the same place alone, etc. Multinationals usually tend to be the ones that operate in more than two countries and this perfectly fits with Disneyland as it has branches in France, US, Japan and China. They also have full control of their branches but they recruit employees from the countries that theyâ&#x20AC;&#x2122;re locating in and must implement business strategies in production, marketing, finance, and staffing that transcend national boundaries. Choosing staff for recruitment will be a very easy process and a great opportunity for many. As for the UAE government they have been focusing mostly on providing their local citizens with the priority of getting jobs in both public and private sectors. Since UAE citizens are trying to be able to be a part of all different jobs no matter what they are, Disney Land will help into becoming one of the major projects in Dubai and the rest of UAE in creating jobs. Looking at the majority of immigrants in the UAE we notice immediately the huge number of Asians, which in 2010 the population in the UAE has reached 71 percent of the whole population. Coming second are the Indian nationality that has reached to almost 42 percent in 2010. Having these huge figures of just those two nationalities we can tell that the workforce is mainly from those two nationalities and especially for low labor cost jobs. 11


Marketing: When it comes to a companyâ&#x20AC;&#x2122;s goal of attracting customers to their products, the process of marketing is essential. The most important aspect of a successful marketing plan is creating value to what you are offering for your customers. Even though the Walt Disney Company is the largest and most well-known media entity, they must still follow the traditional steps to form a marketing plan, which are: 1) Define the business mission, 2) Conduct a situation analysis, 3) Identify and evaluate opportunities using STP (Segmentation, Targeting, and Positioning), 4) Implement the marketing mix and allocate resources, and 5) Evaluate performance (Grewal & Levy, 2011). Defining the business mission is as simple as coming up with an idea (in this case, the idea for Disney in Dubai) and set long term goals for the entire project, then communicate this information to the project developers, and investors. Conducting a situation analysis entails conducting extensive research on both the internal and external factors of the project that may result in SWOT (Strengths, Weaknesses, Opportunities, or Threats). Using STP requires conducting market research on your targeted market and identifying whether your consumers will react

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positively to your product. Disney would do this by hosting focus groups (residents of Dubai would make up a large majority of these groups) and analyzing the feedback for the proposed idea. The next step, implementing the marketing plan and allocating resources, should be done in separate stages in the development of the new park. Press releases and conferences should be used for the announcement of the project, which will undoubtedly cause a considerable media buzz and excitement about the project. In the mid-stages of the parkâ&#x20AC;&#x2122;s construction, it would be a good strategy to allow reporters representing the top news and media outlets exclusive access to behind-the-scenes developments of the project in order to relieve doubtful investors. Once the park is ready for completion and grand opening, Disney will then literally flood the market with promotions (commercials, press ads, Internet publicity, radio, etc.) in order to make sure everyone around the globe will know about Disney in Dubai, attracting the primary segment of tourists. If this step in the strategy is successful, then revenue will generate. If projected gross profits donâ&#x20AC;&#x2122;t amount to expectations, Disney will then evaluate their marketing plan and make necessary adjustments. Certain challenges may arise when implementing the marketing plan described above. Perhaps the most common challenge Disney will face is the language barrier. The official language in Dubai is Arabic so promotions and other marketing information must be translated in order to coincide with Arabic speech patterns. Hiring individuals fluent in both English and Arabic to translate and coordinate local promotions would help this problem. There may be certain cultural differences when a Western conglomerate like Disney penetrates the market in the Middle East, so by integrating Dubaiâ&#x20AC;&#x2122;s culture

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into the marketing mix and goals of the project, thus will foster well-being between both sides, for example, certain promotions can highlight the aspects of the park that embrace the local culture. The only legal issues that may arise are copyright and trademark laws. The government of UAE must adopt international copyright laws for its advertising industry in order for local media outlets to be able to promote Disneyâ&#x20AC;&#x2122;s copyrighted image.

Payment Arrangements: The payment arrangements for the Disney Park in Dubai will be in cash, credit card, or a mix between both, since every customer could pay in both ways. With the park entrance ticket, the company will give a free invitation to road in all the attractions and to see an incredible show about the Disney Park and a room to see the most incredible facts of Dubai history. There will be a pact in which Dubai will also get benefits of the park for letting the Disney Company produce the park under an agreement between both parts. The company will have to accept that probably in the months or year after the inauguration the amount of visitors it wonâ&#x20AC;&#x2122;t be as expected so they will have to account for that by saving money for that time or by investing money on the future project for new roads or better shows to entertain people. For the local customers and distributors it will be an open account where they will have to do an advance payment as a confidence test of the park.

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The documentary collection will be saved at the principal house of the park, which will have all the plans of the park, the structure and the estimated costs and benefits of the park, the whole organization and the games, attractions and shops of the park. The park will accept dollars and dirham (the official money of UAE), and will have machines for European change or any kind of change needed for the customers. The idea of this park is make a good investment in food: bringing to the park all types of different cuisine from around the world: from Europe, America, Asia, Oceania, and Africa. There will also be a huge investment on the high technologies of nowadays such as Disney movies in 3D and in a middle of the whole production maybe do as told by making a small investment on new designs of attractions, games or dolls.

Capital & Costs: In 2011, Disney Company achieved revenue of US$ 40.89 billion dollars. This total is composed by all segments of this company: Media Networks, Parks, Studios, Consumer products and Interactivity (Disney Annual Report, 2011). Only parks could bring R$ 9.3 billion to the company and an Operational Income of U$ 1.55 billion, as shown in table below.

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Building an amusement park isnâ&#x20AC;&#x2122;t a simple task, and making one for Disney is even harder. As they position themselves as a high-quality family company that creates magical experiences and tries to make peopleâ&#x20AC;&#x2122;s dreams come true in a memorable and innovative way, technology and large free space are extremely important pre-conditions. Dubai fulfills all of these points, as they have really good investments in engineering, technology and infrastructure. But, how much would it cost? The main costs consist principally of labor, depreciation, costs of merchandise, food and beverage sold, terrain, marketing and sales expense, repairs and maintenance and entertainment. However, this business plan involves only building the theme park, not managing, so the applicable costs here are: labor, terrain and technology. Building a theme park requires technology, space, and labor, which are the same requirements as an airport needs. Nowadays, Disney is investing in Shanghai with US$ 4 billion to build a 3000 acre park. In Dubai, to build Terminal 3 of Al Aktoum International airport, the newest and biggest one in Dubai were spent US$ 4.5 billion. Considering that 1 Yuan and 1 AED have almost the same exchange rate when converting to dollars, there will be no problem to estimate that the cost of building are the same in Dubai and Shanghai. Analyzing the data related before, we can conclude that the total cost for this project, 16


based on Disneyâ&#x20AC;&#x2122;s Chinese park, will be around U$ 4.5 billion.

Likely Challenges: The idea of establishing a Disneyland in Dubai is overwhelming; however, there are some challenges to overcome in order to have a successful and sustainable business. One of the biggest challenges is to achieve a high standard of entire guest experience. The guest experience can be broken down into factors such as weather and customer convenience. The factor of weather influences the guest experience because throughout the year, Dubai experiences a sub-tropical, high humidity climate. This is especially between April and September where the summer weather peaks are, and sandstorms do happen as well (aboutdubai, 2012). Most of the people could not bear the hot and dry weather for a long period of time and it may lead to sunburn or even heat stroke. Disneyland parks are divided into several themed zones and therefore customers have to walk around to explore the relatively big park. It definitely wears them out rapidly. Furthermore, it involves a lot of outdoor activities, such as their famous Flight of Fantasy Parade, whereby the characters of Disney parade on the Main Street USA, the adrenaline pumping U-shaped coaster, RC Racer and so on. Customers certainly would want to experience every show and ride available, but under such hot and humid weather, if the queuing line is lengthy, it will deteriorate the customerâ&#x20AC;&#x2122;s mood and impression for first comers. It even worsens the case if the queuing area is hot and stuffy. To overcome these problems, more seats provided with shade should be placed within a short distance, such as 500m along the pathway to different zones. Thus, customers can easily find a seat to 17


rest for recharging themselves. In order to allow customers to enjoy the fullest, the queuing time for every outdoor activity should be standardized to maximum of 30 minutes. In order to ensure the standardization to work efficiently, the monitoring of the entire activity and coordination of systems will be important. Employees should also be trained to have excellent crowd control with friendly attitude, which is seen to be vital by the management (Maanen, 1999). On top of that, the queuing area should be equipped with cooling fans and good ventilation systems, which could help the customers wait more patiently and being pleased. Customer convenience also influences the guest experience in terms of convenience of facilities, such as the accessibility to restrooms, because daily attendance to Disneyland is high. For example, the daily visitors in Californiaâ&#x20AC;&#x2122;s Disneyland are almost 40,000 (Disneylandvacationtips, 2012). By estimating the minimum amount of visitors that will visit the park in Dubai, it will probably lead to inadequate amounts of restrooms. The customers may need to queue for using restrooms or search for alternative restrooms, which will definitely dampen their experience if they have been queuing for rides. Furthermore, by expecting huge flows of customers, the cleanliness of restrooms is very important, too. Therefore, restrooms should be placed nearby to each entrance of zones and rides and also within an appropriate distance between restrooms to avoid unnecessary searching action. Clear indication of directions and attractive signboards should be put up, too. In order to ensure the cleanliness of restrooms, cleaners should be assigned to monitor the restroom from time to time and do the cleaning within 30 minutes once as the basis. They should also ensure the toiletries are adequate and available for

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use. In such way, the customers will feel satisfied with such comfortable and clean restroom available for them to take a break. Apart from that, another challenge for Disneyland in Dubai is competition. Dubai is so powerful in financial investment that it has built an indoor ski attraction called the â&#x20AC;&#x2DC;Ski Dubaiâ&#x20AC;&#x2122; located at the Emirates Mall. With this, people in Dubai can ski without going abroad and it offers a range of activities and snow school which can be a family entertainment. It is a unique attraction especially when it is located in a dry tropical climate country. Besides, there are also several water parks in Dubai such as Wild Wadi Water Park and Aquaventure. Both of these water parks offer amazing activities that are highly popular for people of all ages, mainly targeting for family entertainment (HQtravel, 2012). Moreover, they are located at strategic locations for tourism which are Jumeirah Beach and palm-tree shaped artificial islands respectively. There is also an attraction namely Global Village which consists of a fun fair, cultural performances and so on which is very suitable for whole family outings (globalvillage, 2012). Basically, Dubai is very competitive as every one of the attractions has their uniqueness and also targeting the family market. It is also because their culture is family-centered and enjoys entertainment with family such as visiting friends and relatives (stateuniversity, 2012). In order to overcome this, Disney should differentiate their shows and rides that are available in their existing parks. Disney can initiate shows on an ice-skating ring or an indoor snow world with attractive sculptures of Disney characters. Furthermore, they can also have an exclusive interactive session with all the Disney characters within a certain time such as having a chance to take the ride together with Mickey Mouse. This is a very interesting point for customers. There can also be zones with themes associated with 19


Dubaiâ&#x20AC;&#x2122;s culture such as the mysterious Egyptâ&#x20AC;&#x2122;s history and the well-known pyramid building, which will be a uniqueness available in this park only. In short, Disney should focus more on family-based entertainment activities, be different, and creative.

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References: The Walt Disney Company (2007). Company Fact Book. Retrieved April 2, 2012 from: http://corporate.disney.go.com/investors/fact_books/2007/book.html

Kirkman, C. (2009). Strategy Analysis of The Walt Disney Company. Retrieved April 3, 2012 from: http://faculty.haas.berkeley.edu/meghan/299/Case_analysis_Disney2.pdf

Dubaicity (n.d.). Foreign Investment in Dubai Property. Retrieved March 28, 2012 from: http://www.dubaicity.com/about_dubai/dubai-foreign-investment.htm

Moore, M. (2009). Chinese Peasants push up price of Shanghai Disney. Retireved April 3, 2012 from: http://www.telegraph.co.uk/news/worldnews/asia/china/6561419/Chinese-peasants-pushup-price-of-Shanghai-Disneyland.html

Stapley, C. (2012). UAE Construction Costs Set to fall in 2012. Retrieved April 4, 2012 from: http://www.zawya.com/story/ZAWYA20120202074615/UAE_construction_costs_set_to _fall_in_2012/

About Dubai. (2012). Family and Social Life. Retrieved April 16, 2012, from http://www.aboutdubai.org/Family_Social.php Disneylandvacationtips. (2012). Disneyland attendance tips. Retrieved April 16, 2012, from http://www.disneylandvacationtips.com/disneyland-attendance.html Globalvillage. (2012). Attractions. Retrieved April 18, 2012, from http://www.globalvillage.ae/index.php?option=com_content&view=article&id=9&Itemid =4&lang=en HQtravel. (2012). Dubai theme parks. Retrieved April 15, 2012, from http://www.hqtravel.net/middleeast/dubai/attractions/themeparks/ Maanen, J. V. (1999). The Smile Factory: Work at Disneyland. Learning Across Borders:

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Disneyland from California to Paris via Tokyo, p.12. Stateuniversity. (2012). United Arab Emirates. Retrieved April 19, 2012, from http://education.stateuniversity.com/pages/1605/United-Arab-Emirates-HISTORYBACKGROUND.html Disney (n.d.). Facts on Disneyland prices. Retrieved April 10, 2012 from: http://disneyparks.disney.go.com/blog/facts-on-disneyland-prices/ Kawach, N. (2012). UAE are top spenders in Mena. Retrieved April 11, 2012 from: http://www.emirates247.com/business/uae-are-top-spenders-in-mena-2012-02-081.441838 Dubai Dreams (2009). Race and nationality in Dubai. Retrieved April 10, 2012 from: http://www.dubaidreams.net/505/about/race-and-nationality-in-dubai/

http://www2.econ.iastate.edu/classes/econ355/choi/mul.htm

http://digilib.petra.ac.id/viewer.php?submit.x=0&submit.y=0&submit=prev&page=1&qu al=high&submitval=prev&fname=%2Fjiunkpe%2Fs1%2Fhotl%2F2007%2Fjiunkpe-nss1-2007-33403159-9730-merlyn_bakery-chapter2.pdf

http://javamilk.com/panduan-jalan-hemat-ke-hong-kong-macau/disneyland-hongkongday-3/ http://id.wikipedia.org/wiki/Uni_Emirat_Arab#Geografi http://disneyland.disney.go.com/disneyland/ http://ppramono.multiply.com/journal/item/199/199 http://javamilk.com/panduan-jalan-hemat-ke-eropa/jalan-jalan-di-paris-2/ http://ter-paling.blogspot.com/2012/04/10-negara-paling-kaya-di-dunia.html

Grewal, D. & Levy M. (2011). Marketing. New York, US. McGraw Hill/Irwin.

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Disney Palace Team Number: 224 Amanda Murr Angeline Yuen Lai Yee Basel H. Salman El Harakesh Clara Mu単oz Benticuaga Dahat Noor Hutami Rachel Anderson The happiest place on earth is now a part of Egypt! Egypt welcomes Disney Palace, a place for kids of all ages. This is a park unique to the others, but with all of the characters you have grown to love.


Table of Contents

Introduction ......................................................................................................................................1 Executive Summary .........................................................................................................................2 Product/Service ................................................................................................................................3 Target Market...................................................................................................................................4 Consumer Segment ..........................................................................................................................6 Production Site or Service Personnel Location .............................................................................14 Entry Mode ....................................................................................................................................16 Staffing ...........................................................................................................................................18 Marketing .......................................................................................................................................21 Payment Arrangements ..................................................................................................................23 Capital ............................................................................................................................................25 Likely Challenges ..........................................................................................................................29 Conclusion .....................................................................................................................................31 Acknowledgement .........................................................................................................................32 Works Cited ...................................................................................................................................33


Disney Palace Page 1

Introduction

We choose to open up a new Disney Park in Egypt known as Disney Palace. Knowing that the Middle East did not have an attraction quite like Disney, we felt this was the best place to invest. We also themed our park around the tale of Aladdin, creating new rides, attractions, adventures, and a whole new world in this Disney Park. We took into consideration most everything, from the target market to the challenges that lie ahead and payment arrangements, etc., and created a park we believe would be very successful. We focus on children and students as our target market and give them entertainment through the new adventures of Disney Palace in Egypt.


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Executive Summary

This business plan provides you a lot of information about open up new Disney Palace in Egypt. Consider that Disney Palace already opened in USA, Europe, and also East Asia, therefore we want to open in Egypt. Moreover, Aladdin that created by Disney also came from Egypt. Besides we provide entertainment, also we provide an education and experience background in the “packaging” of games that provides in this Disney Palace. Aladdin is our concern on Disney Palace in Egypt. Not only introducing the Aladdin story but also conserving Aladdin story. Since our customers’ focus are children and students, Become a Prince and Princess in One Day is our idea to give new service to the customer. Hopefully this service can grab more customers to come to Disney Palace in Egypt. We are not only addressed to the local visitors, but also outside Egypt. Description regarding product, customer segment, staffing, marketing, and until budgeting are provided completely in this plan and include the forecasting.


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Product/Service

Disney is one of the parks that is famous all over the world. Disney already opened up parks in Florida and Hong Kong, as well as other destinations. There, we can see a lot of Disney characters and also its castle. Disney also held carnivals that show the Disney characters such as Mickey Mouse, Snow White, Donald Duck and many others. Disney not only attracts the kids but also the teenagers willing to come to Disneyland. There are shops for souvenirs if the visitors want to buy it and bring it home. In this business plan, we want to offer new features in the Disney Park that will be opened in Egypt. Our consideration to open up a Disney Park in Egypt is there are no Disney Parks in the middle east and with parks already opened in Florida, Hong Kong, and also in Europe, we wanted something different. So we want to offer new service of Disney in the middle east that is different with the service which is already open in several places. In Egypt, we will make a new experience for the visitors. We called it “Become a Princess in One Day”. The visitors who want to join this new program will be made over by the Disney committee. The visitors use the costume, make up, and accessories like they want to be. There, will be built a new castile for each of Disney’s Princess and the visitors become the main role to play the story, however, the Palace as seen in Aladdin will be the main focus of the park as we are in the middle east and Aladdin was set in the middle east. The crew of Disney will record the role play and the video recording can be bought by the visitors.


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Our plan is attract more target market to come to Disney Palace to try the new experience. By the new experience offered, hopefully Disney Palace will not only attract the local visitors, but also the visitors from the other countries. Since providing games combine with the education is very important to attract the children and students attention, the purpose of provides new experiences to the visitors not only the entertainment side, but also education and conserve the culture of middle east, which is in this case, Aladdin as story from middle east that already provisioned by Disney. Thus, parents will not worry to bring their children to come to Disney Palace to spend their holiday time. After visited the Disney Palace in Egypt, we hope they visitors have unforgettable experience and share to the others. By that, indirectly they create word-of-mouth marketing to promote the Disney Palace. Word-of-mouth marketing is one of trustworthy marketing method that can grab and acquisition customers. Therefore, our expectation can increase the profit margin by using customer centric and enhance Quality of Experience (QoE) without neglect the Quality of Service (QoS). Target Market We chose to open up Disney Palace, a branch of the Disney Corporation, in the major city of Cairo, Egypt. Several factors came into play when considering where to open up our new park. First, we considered the fact that the majority of the Disney Parks are in the United States, and there is talk of opening up another park around the Kansas area known as Disney of the Ozarks. Second, we determined that the majority of parks are in warm climate areas, such as California, Florida, and the Disney Cruise line that visits the destinations of the Caribbean,


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Bahamas, Hawaii, Mexico, Bermuda, etc., therefore, we wanted a new destination outside of The U.S., and outside of the tropical climates. Although Cairo, Egypt is still a warm climate, we can agree that the climates differ from that of say, the Bahamas. We did consider opening a park in a colder climate, for example, in Canada or in Antarctica, but the more we thought about it, the more we realized this would not be a smart investment as when it gets cold people tend to not want to walk around an amusement park. Another thing that came into consideration was the dangers of rides freezing and breaking/causing a liability. With this in mind, we ruled out opening a park in a colder climate. We also considered the vacation destinations all around the world. One of the top choices outside of the United States happened to be Europe, but Europe already has a Disney Park called Euro-Disney. Other places featuring a Disney Park were Hong Kong and Tokyo, so we ruled out these areas as well. There were other countries that are wonderful for vacationing at, such as Ireland and Australia, but out of the choices, Egypt stuck out the most. The reason Egypt stuck out to us is mostly being because of the large number of Palaces Egypt is home to, the Arabic language spoken, and the fact that Egypt is in the middle east. With all of this in mind, we were left remembering one of the most beloved Disney tales of all times, Aladdin. We all know Mickey Mouse is the star of most Disney Parks, and little girls of all ages love to go to the Magic Kingdom to see Cinderella and all of the other Disney Princesses. With this park, little girls will still get to see a Princess with Jasmine, but now little boys will have an idol to see as well in Aladdin. Although the theme park will be based on the tale of Aladdin, the


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other Disney characters will still be around, just like they are in the other parks, but the story of Aladdin will be the main focus. We are not only chose a location in a country that desperately needs such an attraction, but we targeted all kinds of age ranges. Aladdin is a Disney film that came out in 1992 and is still popular today, so not only small children will enjoy this theme, but the big children up to age 30 grew up with this tale. Even the older generation will love this park with the focus on the rich Arabic cultures and beautiful palace that can be seen from all over the park. Tourism is one of the most important sectors in Egyptâ&#x20AC;&#x2122;s economy. When thinking of what to do in Egypt, viewing the stunning colossal monuments and pyramids of Ancient Egypt comes to mind, but what is there for kids to do? Sure, the history and cultures are great for kids to learn, but adding too much education on a vacation is sure to make your children not want to come back and not have a good time. With such an extravagant theme park in place, everyone is sure to have a wonderful vacation when visiting Cairo, Egypt. With everything considered, we believe Disney Palace will be a Disney Park that will truly prosper. We feel the location is in a great place and the target market is very large and, therefore, we will be very successful with this park. Consumer Segment

In this proposal, we had already decided for our business plan on the behalf of Disney company is to open up a new Disney Park so-called; Disney Palace in Egypt. Our target market


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in Egypt is because Disney is a countrywide of variation Entertainment Corporation which Egypt doesn’t have this kind of Entertainment Company throughout their country. Nowadays, market segmentation is immensely important for the company around the world is because which Disney is targeted the right customers it can generate them with the highest customer value and a greatest profit margin. Growing in the theme park industry is a contest in today’s market. For Disney to accomplish in today’s marketplace, first Disney should be more focused on winning customers from their competitors by distributing the bigger value. Consequently, Disney must divide its total market to select for the best division for accomplishing its own company objectives by designing profitable serving, selected segments better than their competitors do. Moreover, Disney must serve its customers and differentiate and position itself compare to their competitors in the marketplace. Furthermore, the type of consumer segment that targeted by Disney in Egypt are, the demographic, geographic, psychographic, and behavioral segmentation. For the term of demographic, Disney philosophy is to providing family entertainment which would target the gender of male and female. Disney also aims the group of people in the kind of children, youths and adult. There are three different range of age which is from, the children: 6 years – 12years old, youths: 13 years – 25 years, lastly is the adult: 26 years ++. Besides this, Disney would also target its customers depends on their family size, example; 1-2 members, 3-5 members in their family in Egypt. Additionally, Disney also target its consumers and also diving the market into different geographical units that based on their nationality, different people from different


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country; such as Australia, British, New Zealand, American, French, German, South Africa and so on. Other than that, Disney would similarly like to target its clients based on their income level. For example, Disney would promote or to target their customers in different entertainment package with their different level of income. Certain of the customer’s income are more likely groups under the range of $10,000 between $ 30,000. Therefore, Disney would target their consumer based on the different segmentation. In addition, Disney also practices the way of targeted their old customer which is so-called their “Loyalty Customers” which is usually play a visit to their entertainment park in Egypt. This group of customers will play an important role for Disney Palace in Egypt because there are the important loyalty customers for Disney this is because Disney is retaining its customers by building their customer relationships and also gain a greater customers value in the marketplace. Hence, Disney will give them the priority of holding their Disney Theme Park loyalty card, and these groups of people will sometime recommend their friends and relatives about this Disney Palace in Egypt. Segmentation Variables And Breakdowns For Disney Palace Visitors in Egypt Variable

Breakdowns

Region

Australia, British, New Zealand, USA, French,

Geographic Segmentation

Germany, South Africa, and so on Area Size

1000,000-4000,000 and over 400,000


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Density

urban, suburban, rural

Age

6 â&#x20AC;&#x201C; 12 years old (children) 13 â&#x20AC;&#x201C; 25 years old (youth)

Demographic segmentation

>26 years old (adult) Gender

Female and Male

Income

Under $10,000 Low social class ( $ 10,000 - $ 15,000 ) Middle social class ( $15,000 - $ 20,000 ) High social class ( $ 30,000 - $ 50,000 )

Occupation

Students, new graduate, and new worker, young professional

Psychographic

Personality

Segmentation

Brand conscious, modern, quick maturation with modern product. E.g.: Compulsive, gregarious, authoritarian, ambitious

Lifestyle

modern , traditional, conservative

Benefit Sought

Functional benefit Data access benefit Data transfer benefit Communication benefit

Behavioral

Perceptual benefit

segmentation

Quality/ affordable price/ economy/ service


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Usage Rate

Seasonal pick in (holiday and weekend)

Loyalty

Strong

This is the preference towards price and quality:

MODERN

H I

P

G

R

H

YOUNG PROFESSIONAL

STUDENTS

I

MIDDLE SOCIAL CLASS

C E

URBAN CHILDREN

YOUTH

L

CONCERVATIVE

O

LOW SOCIAL CLASS

W

RURAL AREA

SUBURBAN

TRADITIONAL

LOW

HIGH

QUALITY


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From the market profiling analysis and preference towards price and quality we get the result that we address the consumer with medium up to high price and also medium up to high quality. We have possibility to make special discount price for students in school holiday. It will helps to attract more visitors come to Disney. Segment of the markets: Demographic segmentation: - Gender - Age

- Occupation

: Male and Female : Children ( 6 - 12 years old) Youth (13 â&#x20AC;&#x201C; 25 years old) Adult (>26 years old) : Young Professional Students

Psychographic segmentation: - Lifestyle : Modern Geographic segmentation: - Density : Urban Disney Corporation has established a worldwide strategy that itâ&#x20AC;&#x2122;s trying to enter all its latent markets around the world globally. The enlargement to Egypt is falls within the perceptions of this strategy. Moreover, Disney Company would practice by using the strategy of differentiation compare with its competitors. For example, Disney could set their reasonable price or budgeted price only for student during the school holidays. Upgrade their theme park environment to be more attractive, more colorful for the children park compare to its competitors. Furthermore, Disney could also do some improvement of their service in terms of facility, build more express lane for the loyalty customers in order to serve them better that


Disney Palace Page 12 during the school holidays. Besides, Walt Disney places the copyright of defense on the “Mickey Mouse” and also of the others character that it’s extremely difficult for competitor’s to even get close to it product. Additionally, it will make its customers easy to access to its product in California. Likewise, apart from the differentiation, additional core factor should look upon is the focusing of Disney customers. The viewpoint of Disney is provided family entertainment which focused on the different group of people like: children, student, youths, and adults, this is because they have put Disney as per ahead of the competition. Disney will focus most on the children and the student group, because these two groups of customers are holding the most populations in the marketplace, which is why Disney targeted them. Other than that, people will have the mind-set of “If the children like this kind of entertainment they will pursue their parents bring them to have a stopover to the park while it is during their school holidays.” That is why Disney will try to upgrade their ever-best facility in the entertainment park to attract the children groups, because children and student groups gain the most profitable value in the marketplace for Disney in Egypt. Moreover, apart from the above strategy, another aspect that comes in together which are the relationship between the parents and the country, for example in this situation, of U.S country build a very strong relationship between U.S and Egypt. Both of them are not only building strong relationship but also a long lasting friendship as well as by authorized contracts and agreements.


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Lastly, Disney also practices pricing strategy which is the low-cost strategy. Disney could come out with the student package only available for student, family package, and also the holiday package for those the youths, and adults. Disney offers a moderately low price to encourage demand and as well as gain a higher market share in the marketplace. This is one of the strategies that can accept by the company and normally itâ&#x20AC;&#x2122;s engaged where the product does not have nor no competitive advantage or the scale of economic that is reachable with greater production volumes, this is also called as low price strategy. Thus, Disney would target its customer using different types of strategy. In conclusion, for further recommendation of Disney Palace in Egypt, (1) Disney should obtain more television networks which can increase it to the televisions viewers. Disney Corporation should acquire more television networks which can increase more televisions viewers and also increase the demand and market share in Egypt. (2) Build an entirely new Disneyland Resort in Egypt. Disney should build a resort in Egypt because this can provide accommodation for the international customers that wish to have an overnight in Egypt Disney Palace, and this also will gain a higher market share in the future market. Therefore, Disney should keep their customers satisfy all the time in term of their products or services that Disney provided because once their customers are satisfy with the services that Disney provided them, they will automatically return back to the Disney Palace. Additionally, Disney should practice the way of added value to its customers in order to serve


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them in the better ways and of course to gain a largest market value in the marketplace from this group of customers, as well as Disney can build a strong relationship with its customers and understand them well, that their customers will not easily switch to their competitors. Production Site or Service Personnel Location In this point we are going to explain the construction of this new Egypt Park: 

Building the stage for the park of Disney is providing people in Egypt unprecedented access to thousands of construction jobs, training and career opportunities.

We must determine a strategy to outline how it will create new jobs, increase sustainable skills among local people and improve links between employers.

Jobs in construction: There will be exciting job opportunities to help build the Disney Park. An international that has a wide range of management, administration, professional, technical and trades/operatives roles available on the Park. The Disney’s Jobs Skills Futures jobs brokerage will source hundreds of people for jobs on the Olympic Park alone. Our aim is for people who were previously unemployed before working on this project construction to make up 7% of the on-site workforce. We have highlighted the following points: We must work with all the main contractors on the Disney to identify vacancies and match people who are suitably trained for those opportunities.


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Training courses available NVQ level 2   

Health and Safety Construction Skills Certification Scheme (CSCS) Construction Plant Competence Scheme (CPCS)

 

Graduate training schemes Short courses

Plant Training       

General operatives/ground workers Concreting Formwork/shuttering Steel fixing Utilities Introduction to Construction Future short courses/apprenticeships

Dry-lining     

Electricians Scaffolding Working at heights Construction tools Pre-employment training

Employer-led training is regularly on offer and can be accessed through Relay London. This training includes courses on 'Waste and Environmental Management'. Jobs on offer from our contractors include:


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Operatives: Traffic Marshalls, Banks men, Industrial electricians and plumbers, General operatives/ground workers, Highways construction, Landscape laborers, Pipe Fitters, Plant Mechanics, Plant operators, Welders, Professional. Civil engineers: Graduate trainees, Quality Surveyor, Surveyors, Office. Administration: Catering and cleaning, Data entry, Document controllers, Finance Yard operatives, and security officers. Once they start work on the Park, we monitor the progress of each apprentice and give them additional support if needed. We work closely with the Park's contractors to ensure that each apprentice: 

Gains job-specific skills through being partnered with experienced construction staff;

Is registered for training with a relevant sector skills body such as construction skills; and:

Completes a vocational qualification and develops their key skills.

To sum it up, we will consider international and local manufactures to build this area. Entry Mode

By using a licensing entry mode to establish a Disneyland in Egypt we would be utilizing one of the most profitable modes for our company giving our situation. By obtaining the license to open the new park we as the licensees will only have to pay the licensor, Walt Disney Corporation, a part of our profits through royalties. Disney will receive returns on the food and


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merchandise sold, admissions, and other forms of sponsorship. By entering into a licensing agreement we will decrease the risks we may face if the business plans results in failure. We will also have to use a smaller amount of resources in the development of the new Disneyland location because previously established guidelines will be followed. There should not be an issue obtaining participation from the Walt Disney Corporation because this method also offers a minimal financial risk on their part. (Hasan, Xaheed, 07 Nov. 2009) The use of sales representatives should be implemented to handle the details of how the park will be established. The representatives will be responsible for staying in contact with the Walt Disney Corporation throughout the entire development process. Every detail of the parks physical attributes will be covered by the representatives from the equipment necessary for the rides and attractions, the merchandise that will be sold in the gift shops, even down to the food and types of beverages available in the food court areas. Administrative directors should work alongside the sales representatives to ensure that there is an adequate amount of employees hired and managed. This will guarantee that the park is assembled and maintained and that all operations will be fully functioning by the established finish date. Being that this is a licensed operation the sales representatives should be notified by the Walt Disney Corporation of all necessary supplies. Many of these resources will be ordered through private distributors whose relationships have been previously established by the Walt Disney Corporation. The resources that do not have established distributors should be sought after by the sales representatives. Only the most cost efficient and reliable products will be acceptable in our business practices.


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Staffing Working for Disney Egypt is your chance to share a moment of history â&#x20AC;&#x201C; not just in this country, but on a global stage. This new park is taking place in Egypt and across this area, and we need talented and dedicated people to be a part of them. With D.E. (Disney Egypt), there are all sorts of job opportunities for all sorts of people, including those currently out of work and students. More than 100,000 people will be paid to work on the thematic installations, all of them with different backgrounds, skills and experiences. From catering to IT, cleaning to ticketing, there are a wide range of paid roles available during whatâ&#x20AC;&#x2122;s known as time available. Recruitment is underway and if you are keen to get involved, you will find something you can apply for. The huge amount of work at Egypt Park means tens of thousands of vacancies are available with Contractor Organizations. World Contractors will be selected to deliver services for the new park. They will hire and pay workers to fill tens of thousands of roles. Because many of these jobs will be ideally suited to talented and motivated people looking for summer jobs, we have set up a dedicated site for students to register their interest in working for contractor organizations at the Games. Contractors are vital to the success of this area and there are four main areas detailed below where enthusiastic and hard-working people are needed. You can search for vacancies jobs in Internet. Contractors will also be hiring through their own recruitment channels.


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Catering and hospitality: Whatâ&#x20AC;&#x2122;s available? Catering and hospitality includes jobs such as: Chefs, Commis chefs, Sous chefs, Kitchen assistants/porters, Bar staff, Waiting staff, Food service assistants, Coffee shop assistants/baristas, and Customer service staff. (This is your chance to get involved in one of the most exciting catering opportunities) With 14 million meals, 40 locations and 24-hour availability, catering doesnâ&#x20AC;&#x2122;t get much bigger than this. The food of Disney Palace will be recognized as being the largest peacetime catering operation in the world and an operation on this scale is a unique challenge, requiring great people to help deliver it. People will work with a wide array of customers, including visitors, officials, broadcasters and athletes, and prepare and serve food made to exacting standards. The highs... Catering will be one of the most exciting areas of Disney Palace. Preparing and serving meals for a diverse array of people, including athletes, international visitors, spectators and officials is a massive and exciting challenge. Catering will create a great team atmosphere, with everyone relying on each other to make the operation work.


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...and possible lows As part of the team providing a critical service, you will need to work hard and you may experience long working hours. You may need to carry weight of up to 4.5kg (10 lbs). You will also need to be flexible: for example, if you are a food serving assistant you may be preparing food and serving diners one minute, and clearing tables and washing dishes the next. Cleaning and waste includes jobs such as: Cleaning operatives, cleaning supervisors, thousands of staff across the Cleaning and waste sector are needed for hire by Disney Palace. The people who work on the Games are a critical element in making Disney Park a success. Cleaning and waste staff play an important role in making sure venues are ready for spectators, and visitors have a positive experience. Retail includes jobs such as: Sales assistants, retail supervisors, retail managers, hundreds of staff across the Retail sector are needed. As a retail assistant at Disney, you will work in a fast-paced environment with a team of knowledgeable, passionate people. Security includes jobs such as: Venue security officers, screening and searching officers, CCTV operators, duty managers, security supervisors, etc. There are thousands of security officer and supervisor positions to fill with Disney Park. Working in a security position means youâ&#x20AC;&#x2122;ll play a vital role in ensuring everyone visiting, competing in or working at the park can safely join in and celebrate Disney


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Resort. People will be part of a large security workforce at Games time, where you will work with a team of security professionals and stewards in and around Egypt. Marketing

The marketing strategies for Disney Palace will be a large part of the success and income. After every ride or attraction, we will have a gift shop to enter to focus on the theme of that particular theme. We will have character greetings throughout the park, with professional photographers to take photographs as mementos. We will focus our restaurants all upon character themes and create unique food choices for all to enjoy, such as a restaurant that offers middle eastern food that will be Aladdin based, a breakfast buffet featuring Mickey Mouse pancakes, an afternoon brunch/tea party with the characters of Alice in Wonderland, etc. We will also place booths around the park in which Disney representatives will sell Disney Vacation packages for the future visits of guests. Being that our park is based on the tale of Aladdin, we will be adding a new magic carpet ride. We will also open an attraction where guests may take a turn at rubbing the Genieâ&#x20AC;&#x2122;s lamp. If the Genie appears, that guest will get a special pass to advance to the front of the lines at the park for the rest of the day with one guest to accompany. Another main focus will be the extravagant palace, much like the one featured in Aladdin. With the new changes, we will bring excitement with this new park for the new opportunities, yet keep an even balance of what everyone enjoys from all of the other parks.


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After research, we have learned that the country specific theme parks are actually doing quite well in Europe, Hong Kong and Tokyo. At the risk of repeating a park already in existence, we searched a new area of the map to decide Egypt was a good investment. Although Arabic is the most common language in Egypt and the customs differ than those in the United States, after research we have learned that of all the countries in the world, hardly any two are more closely related than the United States and Egypt, making this a prime location to add a Disney Park such as Disney Palace. Another marketing strategy will be to make sure we are always advertising, inside and outside of the park. We will have commercials airing, printed articles in the travel magazines, internet ads, fliers in the mail, etc. We will also make sure we are always creating new products to sell and to make a part of the Disney Palace theme park. Our marketing strategy recognizes if we are not continuously working on new products and new ideas, we will easily fall behind in the industry. One other strategy for marketing will be to give coupons and discounts to attractions or restaurants by having guests simply fill out surveys of what they enjoy the most at the parks, what they enjoy the least and what they would like to see. With these surveys, we can determine where we are earning the most money, where we are losing the most money, and how we can earn even more money. Getting inside of the minds of the customers is always one of the most important marketing strategies. If we do not know how our customers are feeling, we will not know how we can make our park successful. With these surveys, we may find there is a portion of the park that is not loved by our customers, but find out there is something everyone agrees


Disney Palace Page 23 they would love to see in the park. In this case, we can treat it as an â&#x20AC;&#x153;out with the old, in with the newâ&#x20AC;? upgrade, and do our best to keep the majority of the guests happy. With Disney Palace, our marketing strategy is aimed to make sure every customer is having a memorable time, whether you are a small child or just a child at heart. We believe that the marketing side of Disney Palace will thrive and prosper. Payment Arrangements As for payment arrangements Disney palace has retailers locally and internationally. For instance Disney palace uses retailers and traders from Walt Disney in the states and Disney land in Paris to buy appropriate items for constructing Disney Palace in Egypt. There can be several items in which they can buy for example costumes for Disney characters or appropriate schematics of special Disney rides or events. For Disney palace forming a new Middle Eastern atmosphere would a be one of our goals so some local retailers would have to be found in order to compose this new approach. For example specialized Middle Eastern event organizations would have to supply Disney palace with unique Middle Eastern provisions. As for the payments Disney palace would have to pay these retailers advance payments in order to have them agree on a contract to supply us with these resources. As for later on as soon as all the resources are given completely and the aid has been prearranged the rest of the payments would have to be given. Walt Disney in the United States would take on an investment with Disney palace and would have to receive a percentage of the profit made by Disney palace as an arrangement to its investment and providing it with the necessities. International restaurants would have to finance with appropriate amount of cash in order for them to open their franchises inside our park for


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example McDonalds. Local retailers like hyper markets would have to be financed with cash in order to be supplied with the appropriate equipment for food and clothing. Also local restaurants for example Um El Dunya which is locally found in Egypt and is popular would have to arrange a contract of franchising inside our park. As for other local restaurants that want more customers and attract their brand to the public then they would have to supply us with an advance payment or letter of credit and hopefully make profits during our opening days. As for customers who are coming to enjoy our services and buy our products they would have options of cash and credit cards. For cash which is the easiest way of financing the services is that as soon as they purchase or use our services or products they would have to pay upfront. They would be receiving upcoming special offers as they use more services and purchase more products. Coupons would be provided for highly active customers that keep visiting which will benefit them with free rides or discounts to our services and products. For example a customer would keep getting coupons of discounts as they keep buying and using our services and products and this will eventually give him or her an opportunity to have free rides and free products from our personal gift center. A likely challenge is time the sooner the resources are received the better, so the retailers should bind by the contract related to the time consumption of the resources and equipment that will be used in forming our park. For example if Disney palace pays in advance to the local retailers in Egypt and they are not actively cooperating on time or in an inefficient matter then this will cause delays in payment matters and conflicts in opening the park on time. Another challenge is checks getting bounced by the bank an example would be if Walt Disney invests by providing a check of a million dollars to Disney palace and their account only has nine fifty thousand the


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check would get bounced and cancelled. Therefore in the contract while agreeing on an agreement between the two parties each party should fulfill their side of the trade. Third challenge between the park and the customers would be the currency. EGP is the Egyptian pound that is used in Egypt and one US dollar is equal to six Egyptian pounds. Therefore in our park we will only accept US dollars and Egyptian pounds so that it is easier for us to be able to deal with currency changes and the current market. So a challenge that would arise to us is that tourists from around the world come with different currencies thus we will provide currency exchange centers around the park before the entry point. Currency might also cause conflicts between the retailers and distributors internationally and that is why the franchise Disney will deal with dollars elsewhere because it is used worldwide. An advantage of using these currencies is that Egyptian pound is used commonly inside of Egypt and the US dollar is the most powerful currency used all over the world. A disadvantage of using these currencies is that the currency rate between the two differs by much as mentioned one dollar is six Egyptian pounds. The fluctuations of increase or decrease of currencies causes difficulties for the residents or foreigners. Therefore the currency market exchange between the US dollar and the Egyptian pound should stay stable as it did in the past years. Capital Since Disney palace is a franchise of Walt Disney itself then this franchise in Egypt would receive some external funding from Walt Disney in order to set up our new park. Therefore Walt Disney would have to fund us with some cash in order for them to open a franchise here in Egypt. After that funding Walt Disney will not be responsible of local


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investment in which we consider to be the supplies and resources of local Middle Eastern restaurants or events that will occur. Thus in this situation bank loans would have to be used and then paid back after a certain period of time with our successful profits made. We will also require financial institutions who would act as intermediaries between the investors and our organization. There are several international financial institutions (IFIs) in Egypt some of them are the World Bank Group (WBG), European investment bank (EIB), the international monetary fund (IMF) and the Islamic development bank (IDB). These institutions would help in lending the government or the organization through the bank itself or through investors. Several important points about these institutions are that they lend money to governments that are facing budgetary deficits and monitor the exchange rates to provide the country with short term financing in order to fight poverty and promote economic growth (International financial institutions and Egypt, 2007). Now Egypt as a country faces political difficulties and faces a net public debt of eighty five percent (CIA). Also unemployment is somehow high, which is twenty percent at this moment. Their expenditures overcome their revenues and as we can see it is facing harsh difficulties. In order for Disney Palace to succeed in Egypt we would need the help of these financial institutions because the government of Egypt is currently at a dreadful stage. As for Egyptâ&#x20AC;&#x2122;s advantage is that it attracts tourists from around the world and if Disney palace is put together the tourists will increase. Currently Foreign direct investment at home is much larger than foreign direct investment abroad. This means that FDI is heavily increasing inside of Egypt which is a good thing. The stability of the exchange rate and the efficiency of the infrastructure and stock market have caused FDI to increase (Al Abbadi, 2009). Challenges that


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Disney palace might face are political instability, cultural diversification. For political instability the capital of Egypt Cairo and other sites have experienced rages of incidents between the government, the president and the public. Protests that occurred against the government and the president of Egypt have increased the risk of investing in such autocratic countries where equity markets and stocks have declined the past year (Global investor, 2011). For Disney palace not to be included in this disclosure it will be placed near the capital of Egypt but built in the astonishing deserts. As for cultural diversification, cultures from different countries might dislike the one atmosphere of Middle Eastern environment. For example European tourists or residents might want to experience both the westernized environment and the Arab Middle Eastern surrounding. Disney palace will include diversified events, rides and clothing in order to please all the tourists and residents that will visit it. As for opportunities Disney will have the first franchise in the Middle East causing it as a huge attraction to the Middle Eastern society adding up to more tourist entering the country therefore increasing the cash flow inside of the country. Aside with the attraction of pyramids that Egypt has Disney will add to this excitement making an impression to other countries. Another opportunity is attracting employment to the public therefore cheap labor force wages to the unemployed will be offered causing the unemployment rate to decrease. We are hoping to have results as the balance sheet of Walt Disney or even better and that is an example of how our balance sheet would look like in the next upcoming years. Our price per share will be 42.35 dollars as their recent price per share is.


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(Taken from Yahoo Finance, 2012)

Period Ending

Oct 1, 2012 Oct 2, 2013 Oct 3, 2014

Assets Current Assets Cash And Cash Equivalents

3,185,000

2,722,000

3,417,000

-

-

-

Net Receivables

7,669,000

6,802,000

5,994,000

Inventory

1,595,000

1,442,000

1,271,000

Other Current Assets

1,308,000

1,259,000

1,207,000

Total Current Assets Long Term Investments Property Plant and Equipment

13,757,000 2,435,000 19,695,000

12,225,000 2,513,000 17,806,000

11,889,000 2,554,000 17,597,000

Goodwill

24,145,000

24,100,000

21,683,000

Intangible Assets Accumulated Amortization

5,121,000 -

5,081,000 -

2,247,000 -

Other Assets Deferred Long Term Asset Charges

6,971,000 -

7,481,000 -

7,147,000 -

72,124,000

69,206,000

63,117,000

Accounts Payable

6,362,000

6,109,000

5,616,000

Short/Current Long Term Debt

3,055,000

2,350,000

1,206,000

Other Current Liabilities

2,671,000

2,541,000

2,112,000

12,088,000 10,922,000 6,795,000

11,000,000 10,130,000 6,104,000

8,934,000 11,495,000 5,444,000

2,866,000 2,068,000

2,630,000 1,823,000

1,819,000 1,691,000

-

-

-

Short Term Investments

Total Assets Liabilities Current Liabilities

Total Current Liabilities Long Term Debt Other Liabilities Deferred Long Term Liability Charges Minority Interest Negative Goodwill


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Total Liabilities Stockholders' Equity Misc. Stocks Options Warrants Redeemable Preferred Stock Preferred Stock

34,739,000

31,687,000

29,383,000

-

-

-

Common Stock

30,296,000

28,736,000

27,038,000

Retained Earnings Treasury Stock

38,375,000 34,327,000 31,033,000 (28,656,000) (23,663,000) (22,693,000)

Capital Surplus Other Stockholder Equity Total Stockholder Equity Net Tangible Assets

(2,630,000)

(1,881,000)

(1,644,000)

37,385,000

37,519,000

33,734,000

8,119,000

8,338,000

9,804,000

Currency in USD.

Likely Challenges It is inevitable that challenges and issues will arise throughout the development of the new Disneyland theme park in Egypt. All of our upper management employees should be prepared to handle and resolve the problems that they may face. Some examples of the challenges that may be experienced during this international business practice are language and cultural barriers, hiring training and managing employees, and capacity planning. With any international business excursion differences in language and culture will be prevalent. Adequate research should be conducted to ensure that these barriers are kept to a minimum. Possibly hiring managers that are expatriates of Egypt will also assist in reducing cultural challenges. When it comes to advertise the new Disneyland it would be in the best interest of our corporation to hire both a marketing team native to Egypt and a marketing team


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familiar with our customs. This way they can collaborate and create marketing strategies that will communicate our views and values without being misleading or misrepresented in Egypt. Capacity planning involves estimating factors such as the number of employeesâ&#x20AC;&#x2122; necessary, labor hours required, and the size of facility needed. Being that this is an extension of an established and fully functioning brand, guidelines should be provided by the licensors but adjustments will be necessary since operations are taking place in a new location. Once the size of the theme park is established and the amount of attractions and amenities are decided upon, the amount of employees and labor hours performed by each will be more easily estimated. Once the amount of required staff has been established the issue of how employees are hired and managed should be addressed. The methods of how the potential employees are recruited will be a major decision. The preferred medium of the locals will determine which form of communication will be most effective. Also the ways in which people promote themselves in this country should be taken into consideration so that the largest amount of applications will be received. The management styles or current businesses in Egypt should be researched to discover how the management teams of our business should conduct.


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Conclusion We believe we have created a park that will attract the young and young at heart, as this park truly has something for everyone. We created a new kind of Disney Park to make things interesting, but we kept the same rides and attractions the loyal customers have grown to love. We were careful with our considerations and our planning of this park, and believe we have thought of a way to prevent almost every obstacle and challenge we will face. In conclusion, we believe Disney Palace will truly prosper.


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Allocation of Tasks in the Team Amanda Murr – Target market and Marketing (Topics 2 & 7 & Title Page) Dahat Noor Hutami – Product/Service (Topic 1) Clara Muñoz Benticuaga – Production and Staffing(Topics 4 & 6) Basel H. Salman El Harakesh – Payment arrangements and Capital (Topics 8 & 9) Rachel Anderson – Entry Mode and Likely challenges (Topics 5 & 10) Angeline Yuen Lai Yee – Consumer segment and Cover page (Topic 3)


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Works Cited Harvard Referencing Al Abbadi, A.,F.A. (2009). Diagnosis of the current situation of foreign investment in some Arab economies. International Management Review, 5(2), 55-64. http://ezproxy.aus.edu/login?url=http://search.proquest.com/docview/195571385?accou ntid=16946 Anon. (2012) Market Segmentation [Online]. Free Essays and Research Papers: OPPAPPER.COM.

Retrieved from: http://www.oppapers.com/essays/Market-

Segmentation/51094 [Accessed 20th April 2012]. Anon. (2011) Expanding Disneyland in Egypt [Online]. Gradua Networks: Write work . Retrieved from:

http://www.writework.com/essay/expanding-disneyland-Egypt [Accessed

21st April 2012]. Anon. (2012) low cost strategy [Online]. WebFinance, Inc.: Business Dictionery.com. Retrieved from: http://www.businessdictionary.com/definition/low-cost-strategy.html [Accessed 21st April 2012]. Central Intelligence Agency. (2011). The World Factbook: Egypt. Updated April 7, 2011, Retrieved April 23, 2011, from https://www.cia.gov/library/publications/the-worldfactbook/geos/eg.html


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Egypt highlights frontier investment risk. (2011). Global Investor, , n/a-n/a. http://ezproxy.aus.edu/login?url=http://search.proquest.com/docview/856968000?accou ntid=16946 Hasan, Xaheed. "Modes of Entry Into an International Business." Scribd. 07 Nov. 2009. Web. 12 Apr. 2012. <http://www.scribd.com/doc/22242895/Modes-of-Entry-Into-anInternational-Business>. International financial institutions and egypt. In (2007). (pp. 1-8). Washington: Islamic Development Bank,. doi: www.bicusa.org/ifisandegypt Yahoo finance. (2012, April 23). Retrieved from http://finance.yahoo.com/q/bs?s=DIS&annual


Appendix 1. Team Business Proposal Title Page Team #: 227 Client: Nike Product/Service: We have chosen to introduce a Nike line of sports drinks named SPLAH. Our drink will be a healthier option from our competitors and we will be targeting our product at athletes. Number of pages, including title page: 23 Team Members: Dian Pravita Hapsari – Indonesia Cristina Lopez Mazon – Spain Fatima Y., Ahli – UAE Robert Hoadley – USA-NC Carrie Culkins – USA-OK


Table of Contents Executive Summary……………………………………………………………………………….3 Product/Service……………………………………………………………………………………4 Target Market………………………………………………………………………………...........5 Consumer Segment………………………………………………………………………………..6 Production Site…………………………………………………………………………………….6 Entry Mode………………………………………………………………………………………..7 Staffing………………………………………………………………………………..…………12 Marketing………………………………………………………………………………………...13 Payment Arrangements…………………………………………………………………………..17 Capital……………………………………………………………………………………………17 Likely Challenges………………………………………………………………………………..20 References…………………………………………………………………………………….…23

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Executive Summary This report provides a new opportunity for Nike to expand its revenues and market share by offering a new drink called “Splash”. A lot of research has been done to identify the target market, which is the professional sport athletes, since they need a drink that will help them perform better. Nevertheless, other consumers can find this product appealing as well, such as active elders, young parents, and teenagers. Because Nike already has a huge market share in footwear, apparel and equipment, the new drink has a huge chance to be accepted by many consumers. Thus, Nike’s approach to production will be outsourcing and contracting with foreign companies for producing and shipping the drink globally. Therefore, Nike’s entry mode will be mainly exporting and international licensing, which are the best cost effective ways. Besides, Nike will adopt a geocentric approach, by using current skilled employees to promote the product. Also, the product, price, place and promotion are addressed in terms of the product development strategy. In addition, the product will be promoted through TV Commercials, sponsorships and advertisements. Most importantly, Nike’s financial technique will involve using internal funding of Nike’s capital funds that will be allocated towards research and development. Hence, this report shows that Splash will be a success according to the analysis provided.

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Product We will be introducing a Nike line of sports and energy drinks named â&#x20AC;&#x153;Splashâ&#x20AC;?. There will be several types of the Splash drinks available to appeal to our targeted consumer group of athletes. We will also have a variety of flavors as well. Our Nike drink will be unique from our competitors in that our drink will be high in vitamins and supplements that our competitors lack. We will use all natural flavors and ingredients making our drink the healthier option. Our product will be sold at convenient locations to our target market. We will be available for purchase at Nike stores, on-line, supermarkets, gas stations, vending machines, and concession stands. We will charge a very competitive price for the product we are delivering. When considering we want to appeal to athletes we had to keep in mind that many athletes are in high school or college and do not have the funds to spend on high priced items such as sports drinks. By keeping our prices competitive we are hoping to attract athletes of all ages and all financial backgrounds. Our drink will appeal to consumers by promoting the health advantages our drink offers as opposed to the dangers of other energy drinks and the artificial ingredients in other sports drinks. We will be using professional athletes as our spokesman for our drink as a way to get our name seen by the public and to promote our sales. Having the Nike name will benefit our product from the start. Nike has been a huge name in the sports industry since 1972. The Nike name is trusted by athletes and individuals worldwide. By using the Nike name people who already trust in Nike products will be willing to try our product. This will give our product a competitive edge to entry barriers that other products will not have. Our drink will be sold worldwide and our prices will be adjusted to each countryâ&#x20AC;&#x2122;s currency accordingly.

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Target Market When deciding to enter a new market with a new product one of the most important things a company has to decide on is who their product will be aimed at. This is called a target market. A target market is the group of businesses and/or people the company will be trying to sell their product or service to. Once a target market has been agreed upon a company can then decide how best to market their product to the selected group. When considering a target market for Splash we originally wanted to make a drink type for everyone. With all the benefits our drink offers we thought it was something everyone would love. Everyone however is far too large of target market for a new product. We decided to narrow our target down to those we thought could benefit the most form what we have to offer which is athletes. We also decided that by selling to athletes we would be able to make the most profit for our business. We will be targeting male and female athletes between the approximate ages of 18 and 35 worldwide. By offering several types of the Splash drink we are hoping to meet all of an athleteâ&#x20AC;&#x2122;s needs. Any type of athlete who performs should be focused on their body and doing the proper things to keep their body at peak performance level. When researching the importance of sports drinks to an athlete we were able to find several reasons why sports drinks are highly important for a performing athlete. A sports drink contains minerals and carbohydrates which help the drink reach the bloodstream quicker than water. Since sports drinks are high in nutrients they allow the body to maintain an optimal fluid balance. The sodium in sports drinks stimulates thirst so an athlete will remember to hydrate themselves more. After considering these facts it became clear that athletes were the target market for us. Working people may enjoy the taste and the effects Splash has to offer, but athletes need it.

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Consumer Segment When looking at all the characteristics the product Splash brings to the market, there are many attractive market segments and target audiences for the new sports drink. Splash is created for anyone and everyone and will accommodate both male and female of all ages to consume. When looking at possible segments our group listed a few: professional sport athletes, physically active parents aging from 25-35, physically active children aging from 10-18 and active elders aging from 55-70.

With Splashâ&#x20AC;&#x2122;s low prices, healthy ingredients and refueling nutrients

everyone will want to get their hands on this drink. After reviewing all of the possible segments Nike should focus on professional athletes are the primary target. There are roughly 17,500 athletes drinking some sort of sports drink on a regular basis and Nike wants all 17, 500 with their hands on splash. The main reasons for selecting this target market are they are sustainable, reachable, expandable and profitable. Professional sports are at the height of entertainment and is a career all serious athletes try and grasp. By being such a large group filled with numerous types of athletes such as; swimmers, basketball players, baseball players, golfers and etc., Nike can approach this segment in a number of different ways and sports thus making them a very reachable market. Since competition is so fierce in sports and everyone playing competitive sports is looking to achieve their ultimate goal of being a professional, Nike has created a segment that is very sustainable and expandable. Nike is arguably the best sporting good company in the world, athletes are always eager to get their hands on Nike products. Nike will easily be able to reach this market by issuing sponsorships. By giving an athlete a sponsorship they have endorsed the product. Depending on the status of this athlete this could lead to television commercials and other advertisements helping Splash become known worldwide and

6


to other market segments. With a known presence in national and global market, Nikeâ&#x20AC;&#x2122;s splash will become very profitable and the go to sporting drink.

Concentrated Marketing Strategy The next step was to create a strategic plan for Nike Splash. Since we are focused on one market segment it is most appropriate to use a concentrated marketing strategy. This strategy approaches a very specific segment and creates a product that caters to all of that segmentâ&#x20AC;&#x2122;s needs. Athletes are a specific group that has very specific needs. Athletes need a drink that can keep them hydrated, refuel their bodies while they are hard at work during competition, while also producing a drink that tastes good. With Nike being a very large corporation with extreme wealth they will be able to invest large amounts of money and resources into research. This research will provide them with the appropriate data and information to create a sports drink far better than their competitions.

Production Site Since the beginning of Nike the company has chosen to primarily focus on the design, marketing and technology of their products. When looking at their shoe and apparel production for example they have sent everything overseas to places such as; Indonesia, China and Japan. Nike sets up contracts with these foreign companies to produce their products. This is very cost efficient for Nike because by handing out these contracts they sacrifice all legal and technical control over management and the factory thus reducing costs. However this could lead to issues between the Third Party Company and Nike. The reason why these companies stay very loyal to Nike is because of the substantial pay that comes out of these contracts. Nike will use the exact 7


same approach towards splash. Nike will continue to outsource all production to foreign lands and create contracts with foreign manufacturing companies. These manufacturing companies will be responsible for producing Splash and shipping to specific locations which will be specified in detail within the contract set up by Nike. Nike has seen a lot of success through this method of production, making this a key for success for Splash.

Entry Mode The entry mode is one of the most significant steps for any firm whether it is domestic or international. It determines whether the company will be successful and profitable or whether it has made the wrong choice to enter a specific market niche. Entry mode is the process of introducing a company’s products, services, human knowledge and skills and technology to new market segments in foreign countries. The entry mode determines the company’s overall direction in terms of resources, competencies and capabilities to effectively expand in international markets (Root, 1994). Nike is a global company which is engaged in footwear, apparel, equipment and accessory products. This paper will discuss Nike’s new energy drink “Splash” and its entry mode; there are seven different entry modes that the firm can choose from. It includes international exporting, international licensing, international franchising, specialized modes Contract manufacturing, management contracts, and turnkey projects- and foreign direct investments -Greenfield strategy, acquisition strategy and joint venture- (Griffin & Pustay, 2010). Since Nike is already a well-known company globally, it will be easier to enter a new market regardless of the entry mode. However, because it will be Nike’s first attempt to enter the

8


industry of soft drinks, it needs to do an analysis of the situation and search for the best market potential whether it is in the USA, Europe or the Middle East. The simplest mode of entry for Nike would be exporting to new markets in the USA, Europe and the Middle East. By exporting, the company can control its financial position because little capital investment is needed for such a process. Thus, the company can put all its finances in research and development and market research to better understand the marketsâ&#x20AC;&#x2122; needs and address them accordingly. Also, Nike has to choose a local distributor to help its products reach different consumers. And it can deal with the same advertisers for its products and use the same celebrities. Besides, the firm can deal with its original suppliers and contract with them to maintain loyalty. In addition, this will allow Nike to put its products on the shelves of the supermarkets and gas stations where consumers can see a new product and try it. Since the company is already established globally, they already have the information about the market conditions and consumers available in each market segment. This opportunity will allow Nike to expand its market share through different products, in this case drinks. Because there are a variety of energy drinks globally, Nike can better compete because of its global presence. Through exporting, the firm can push the product to consumers and look for new opportunities. Another entry mode that Nike can follow is international licensing, which leases the right for another company to use Nikeâ&#x20AC;&#x2122;s drink and sell it abroad for a royalty payment. Nike sells its products in 18,000 retail stores in the United States, and has various independent distributors, licensees and subsidiaries in 200 different countries. Besides, licensing is an excellent entry mode because it also requires a minimum cost. Hence, Nike does not have to set up its own shop to sell those drinks, thus reducing the cost. However, for licensing to be successful, both parties must set boundaries and determine their right, and the profit earned should be higher than the

9


fees. Nike can initiate contracts with different suppliers of gas stations and supermarkets globally to sell their products on their shelves. For example, Nike can issue licensing for Wal-Mart and 7Eleven in the USA, Carrefour and Spinney’s in the Middle East, and Tesco in Europe. Another advantage of licensing is that it avoids the tariffs and trade barriers on foreign investment and provides knowledge of the local market. However, it does limit the profits and potential conflicts might arise (Griffin & Pustay, 2010). The entry mode for Nike depends on particular factors, including the firm specific factors, the country specific factors, and the market specific factors. The firm specific factors consist of the resources Nike possesses, such as the skills, knowledge and capabilities for producing and introducing a new drink to the market. Further, the resource based approach states that the entry mode depends on the resources available. Thus, because Nike already is large and established it has acquired the necessary resources to introduce such a new product line. For instance, there are many celebrities endorsing Nike, which will help the company in advertising for “Splash” by doing the same thing. Besides, the size of research and development Nike will conduct is important to determine what are the opportunities available and where are they. Furthermore, the country specific factors consists of the government regulations and political stability, the risk of introducing a new soft drink to a mature industry, and the level of education or income in a country to be aware of such products. In addition, the market specific factors depend on the demand in each market segment and the size of the segment, where the decision should base on whether there is a potential for high sales or not. It also includes the level of differentiation of “Splash” from different competitors in the market. It also depends on the level of competition, since there are many energy drinks, such as Gatorade, Red Bull and etc.

10


Nevertheless, the entry mode affects the costs and expenses, and the goal of introducing a new product line is to gain market share and not gain expenses. Hence, exporting is the best cost effective way to introduce the product to new markets. Besides, the transaction costs can also create a problem for Nike, but since it already has built a sustainable relationship with many suppliers, it can benefit from those relationships. Moreover, there are many factors that can affect the entry mode, and those factors can be either external, internal or both. The external factors consist of the quality of the drink, the quantity and the cost of producing and shipping it from the company to the retailers to the distributors and to the final consumer. And the internal factors include the product differentiation. Hence, the plan is to differentiate the product by offering different flavors and creating an attractive and eye catching package. Nike will have numerous entry modes because it is well established company with many resources and capabilities but the best would be exporting especially for the beverages line. It can achieve standardization by offering the same drink flavors and shape worldwide and achieve economies of scale (Andexer, 2006). Hence, starting to produce and introduce the product in the USA is the best solution because of the huge market opportunities available. Then the next step is gradually starting to expand to Europe and the Middle East since there are many opportunities that the company can grasp.

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Staffing Staffing is to ensure that the firm has human capability to success and it includes: Job analysis and planning, recruiting and selection, and managing orientation of new employees to the firm, together with their ongoing induction and socialization to the firm mission, vision and culture. A key staffing decision to support â&#x20AC;&#x153;SPLASHâ&#x20AC;? is whether new employees are needed to deliver the product and what staffing policy Nike will use. The three most common alternative staffing policies are: the ethnocentric approach, the polycentric approach and the geocentric approach. These policies differ in the choice of key employees at different geographic locations. As we said before, this product will be sold at Nike Stores, but also at gas stations, supermarkets, drink dispensers... So there is no necessary of hiring new personnel, because overstaffing would drive up the operating costs. Nike will use current employees, but only for the Marketing campaign, some personnel will be recruited. They will be at stands at Nike Stores and Malls, introducing people Nike´s new drink and letting them try it. We are adopting the geocentric policy for this temporal function. Under this policy, best people are looked for key jobs throughout the organization despite their nationalities. For the staffing process, we are looking for students or young sports-people for covering the launch campaign. All candidates must meet these requirements.

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Marketing Marketing in the sports industry is becoming an increasingly complex challenge. One of the most important aspects of marketing is the marketing strategy. Marketing strategies are focused on the consumer needs and on the capability of the company to satisfy the needs. These strategies are developed as multi-years plans, with a tactical plan detailing specific actions to be accomplished in the current year. Also they are dynamics and interactive. A marketing strategy is composed of several interrelated elements, the STP: Segmentation Nike uses demographic segmentation strategy with age and sports as the parameters. The main target segments are young people and sports-men and women. Target Public As we said in the Target Market, the product will be offered globally. The target public is those people who likes boost of energy and vitamins (primarily while they are doing sports, but also for their study, stress...) or they just like our variety of flavors. Positioning Nike is one of the leaders in the Sports Industry, and the customer perception is a key factor affecting our product success. Besides Nike´s quality or size, the positioning concept is one of the main reasons of Nike´s survival in this competitive marketplace.

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Product-Market Growth Strategy

Ansoff´s matrix provides four different growth strategies: - Market penetration - Product development - Market development - Diversification Nike is developing a new product targeted to its existing segments markets. For Splash, we are using a Product Development strategy. This one is the most appropriate strategies because Nike´s strengths are related to its specific customers rather than to the specific product itself. This strategy requires the development of new competencies and requires the business to develop modified products which can appeal to existing markets. Also this strategy carries more risk than the Market Penetration.

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SPLASH marketing strategy is also focused on the "3Cs strategy": Corporation, Customer and Competitors, followed by a good analysis of the Marketing Mix: product, price, promotion and place. We already talked about the corporation (Nike) and customers (Nike clients, and young people and sports-people). About the competitors, the strongest ones are Gatorade and PowerAde (because Adidas or Reebok are not in the beverages market), and our objective is to create a competitive advantage against them. In the Marketing mix, we also described the product (Splash), its price and where it will be sold. Promotional Plan The promotion of the product is a very important point in the Marketing strategy. The promotional plan includes: personal selling, sales promotion, publicity, advertising and direct marketing. The three basic objectives of Splash´s promotion are: 1. to present information to the customers and to people in general. They have to know the new drink before they can buy it. A good promotional plan creates expectation among the people. 2. To increase the demand. If no one knows Splash, nobody is going to buy it. But if the product gets popular, the demand is going to increase. 3. To differentiate a product. We want to differentiate our product from other existing drinks with similar characteristics. People have to believe that Splash is better than the competency.

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Splash´s Promotional Plan will focus on: - TV Commercials. Nike has done a lot of TV commercials. For Splash, some commercials will be shown on television, with famous athletes that have already collaborated with the firm, such as LeBron James, Lionel Messi, Michael Phelps...etc. - Sponsorship. Nike sponsors National Football Teams, Universities, tennis players (Serena Williams, Rafael Nadal...), Tiger Woods, track & field events... Nike will give free drinks to all of these athletes and teams and will host contests at NBA, soccer games and at the 2012 London Olympic Games. - Advertisements at magazines and newspapers, with pictures of Splash, with the logo and slogan. - Promos, Special Events and Stands at Nike Stores and Malls. Customers will try Splash and will get free advertising, t-shirts and balls. Slogan and Logo Every good marketing campaign needs a good slogan that will influence their target market and that is identified with the product and the brand. Splash´s slogan will be: "JUST DRINK IT" (related to Nike´s famous slogan: "Just do it").

JUST DRINK IT Also a logo is essential to any company. For Splash we are using Nike´s actual logo, the very popular Nike Swoosh.

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Payment Arrangement The customers can get SPLASH at oil stations, supermarkets and also at convenience stores by using debit card, ATM or cash payment. They also can get it in official NIKE stores with various flavors. The store will give the athletes a 10 percent discount for every 1 dozen. The price of 1 can of SPLASH is $4 so they have to pay $43.2. NIKE is giving a special discount to customers buying both Nikeâ&#x20AC;&#x2122;s products and SPLASH. For instance, if they spend $150 in buying shoes, they would get SPLASH for only $2.

Capital As mentioned above, Nike already is an established company with high revenues and sales for its products reaching 9.87 billion dollars annually (2011). However, it will be the first time for the company to introduce a beverage line, and lots of research regarding the funding and capital use has to be done. Since the company is already cash rich, it can assign a percentage of

17


that capital for research and development to produce the most desirable product to their target consumers. From a budget perspective, this research and development of the product will be the most costly part since it requires further investigation of the consumers’ different tastes in each market segment. Most importantly, this research will consist of focus groups and interviews with a random sample group of customers to come up with different flavors and packaging will for the drink. Therefore, 15% of the company’s capital funds will be allocated towards R&D. Nike should set in mind that the more they invest in research, the better product they will develop, and hence, the more profit they will yield in the longer run. Further, the company can dedicate 5% of the revenue from the sale of apparel and footwear into the production and marketing of the new beverage. It is a fact that customers are always more eager to purchase limited edition or exclusive products. Therefore, internal funding of the project is highly important, as we recommend that Nike avoids sponsorships for the time being. Reason behind this is that the company will be able to preserve the exclusivity of the product, and limit the management’s return on the product sales to the company itself rather than sharing it with external investors. This will enable them to grow their profits and balance their expenses. In the long run, once the product is more established and familiarized by customers, demand will increase, resulting in higher share price for Nike. To distribute the product worldwide, Nike will be exporting it from the production center to all the stores. In that case, the costs will be minimal, and will pertain to transaction costs and distribution of the product globally. The figure below shows Nike’s revenues in terms of product segment in the year 2003 and Nike’s market share in 2007.

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Revenues 8.52% 6.26% Equipment 29% 55.95%

Apparel Footwear Other

Nike’s Co-President stated that the company’s net income increased from $124 million to $200 million from 2003 till 2004. He also said “We've just posted the most-successful third quarter with respect to revenues and gross margins in our company's 32-year history. . . . Our revenues are strong, our gross margins are trending up and our average price per pair is increasing." This clearly shows how well the company is doing in terms of sales worldwide. Additionally, Nike’s business level strategy “encompasses the business’ overall positioning in the market. NIKE stays competitive due to its cost leadership, product differentiation, and industry segment management” (Dermesropian, Drago, Grigaite & Lopez, 2004). Hence, Nike excels in producing in the least cost effective way but with maintaining high quality. Besides, Nike depends a lot on outsourcing its operations in China, Indonesia, Vietnam and Thailand. Therefore, Nike can benefit from the situation and produce the packaging by outsourcing it to stay cost effective. In addition, in 2011, the company reported that it gained 15 % in sales because the profits rose highly (New York Times, 2011). Also, in 2012, Nike reported that its earnings per share rose by 11%. Nike’s Cash and short-term investments were “$3.2 billion; $1.3 billion lower than last year as higher working capital investments reduced free

19


cash flow from operations, while dividends and long-term debt repayments increased year-onyear” (Nike, Inc., 2012). Nonetheless, the amount Nike can spend on research and development can be around 20 % to 30 %, as the vice president of marketing and development of the HON Company stated (Mead, 2012). This is because the product doesn’t need constant innovation; it just needs minor adjustments after it is produced. In our case, once the product reaches the maturity stage, we will refresh it by celebrity endorsements. On the other hand, there are some challenges of using Nike’s capital to develop a new product line. If the product turned out to be a failure, Nike will incur unnecessary expenses and will have to rethink its strategy. The worst case scenario would be eliminating the product line for beverages. Nevertheless, because of the various energy drinks available in the global market, Nike will have to put in more effort to differentiate its drink in terms of taste, price, and quality. Hence, market competition plays a major role in the success of the product.

Likely Challenges There are several challenges that we might face it in order marketing SPLASH 

The challenges we might face in order marketing SPLASH is we have to compete the existing energy drinks. Everybody knew that Red bull is the number one energy drink around the world. It is quietly hard to join the competition because we are new in this market. To convince the customers is not easy because they knew NIKE as the sport brand which selling shoes, bag, T-shirt and any kind of sport thing, not the energy drink brand.

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ď&#x201A;ˇ

To give the benefit of SPLASH as energy drink, the packaging should meet the SLA requirement to avoid the damaged of quality.

SWOT Analysis Strength

: NIKE is a global brand; it is quite easy to introduce SPLASH to the people. Also

the reputation for NIKE itself which concern on selling sport products. The market can accept this new energy drink. Hopefully the customer will try it and become repeat customer. Weaknesses : People knew NIKE as sport brand not an energy drink brand. They may try this product but if they disappointed it will give the company bad impact for the selling of whole NIKE product so we have to keep the quality of SPLASH. Opportunity : From this problem we can get the customer from competitor because to keep a good quality is our main purpose. To prevent the dissatisfaction of customer, we have to improve to make the quality better. So we can reach half of the existing energy drink customer. Threats

: The existing brand will feel insecure because NIKE is the one of the most

powerful brand especially in sport products. They may give their customer special discount or event to keep their customer keep buying the product. They may strictly improve their strategy and plan to prevent their customer to our product.

Nike will be taking on a new market by investing in the Splash sports drink. By being the first athletic company to make this move our only competition will come from the sports drink names that are already available. By attaching the Nike name to our product we will be bringing a pre-existing consumer base with us. The Nike Splash drink has the potential to surpass even the most popular names in the sports drink industry.

With our aggressive

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advertising and marketing strategies we are planning to be larger than even our own expectations.

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References Andexer, T. (2006). Analysis and Evaluation of Market Entry Modes into the Asia-Pacific Region. Norderstedt, Germany. Dermesropian, R., Drago J., Grigaite G. & Lopez, T. (2004). NIKE (NKE). St. John’s University Student Managed. Fitzgerald, Matt. “Which Fluid Hydrates Best: Water or a Sports Drink?”. www.active.com Griffin, R. & Pustay, M. (2010). International Business. 6th ed. Pearson Education, Inc. Hill, C.W (2011), Global Bussiness Today (7th ed). New York. McGraw Hill Mead, D. (2012). How Much Should You Spend on R & D. Ports, Mandy. “How to Define Your Target Market. Inc.com. June 22, 2010 Roots, F. (1994). Entry Strategies for International Markets. San Francisco: Jossey Bass, Inc. The associated press. (2011). Nike’s Profit Up 15% in Quarter. New York Times. Young, Andrew , Goodworks International, LLC. http://www.calbaptist.edu/dskubik/young.htm#credibility, http:://tutor2u.net/business/strategy/ansoff_matrix.htm

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INTERNATIONAL BUSINESS COLLABORATION PROJECT

Team # 231 Client (Company): Zara Product/Service: Expanding the Zara fashion line into wedding attire for both men and women. Existing Zara stores will include a Zara Novias section for wedding dresses, tuxedos, and bridal accessories; both for sale and rent. Number of pages, including title page: 25

TEAM MEMBERS: Name

Country

Sara Cifelli

United States, NC

Elena Bustillo

Spain

Haseeb Qamar

United Arab Emirates

Fathimah Ridwan

Indonesia

Eric Wells

United States, OK

Did Not Participate

1


Contents

Contents .......................................................................................................................................... 2 Executive Summary ........................................................................................................................ 3 Cash Flows ...................................................................................................................................... 4 Product/Service ............................................................................................................................... 5 Target Market: ................................................................................................................................ 5 Consumer Segment ......................................................................................................................... 7 Production Site ................................................................................................................................ 8 Entry Mode ..................................................................................................................................... 9 Staffing .......................................................................................................................................... 10 Marketing ...................................................................................................................................... 11 Payment Arrangements ................................................................................................................. 17 Capital ........................................................................................................................................... 20 Likely Challenges ......................................................................................................................... 21 Examples of culturally diverse wedding gowns: .......................................................................... 24 References ..................................................................................................................................... 25

2


Executive Summary The aim of Zara Novias to expand the product portfolio of Zara apparel stores by introducing bridal wear sections into already existing locations all around the world. At first, the most important locations will be selected to introduce this new line. The customer response will help to expand Zara Novias to all the Zara stores around the world. The plan is to employ a capital intensive strategy and charge customers a premium price. The USP of our product would be customization of the branded bridal wear. Moreover Zara Novias will be offering a rental service for the standard line of dresses at a discounted price. A dedicated design team along with integrated manufacturing will ensure creativity and product quality. The expertise of Zara as an apparel manufacturer will help to achieve economies of scale while satisfying consumer demand. To successfully implement this project a specialized administrative workforce and trained staff would be required, which will be hired as per the requirement of each store. Zara will market the product through various channels while promotion will be both, direct and below the line.

Through brand integration and synergy the aim is to successfully implement this project. It will gradually become a major part of the overall business bringing in considerable revenues and increasing the goodwill of the company.

3


Cash Flows To reflect the economic impact of the Inditex Group's activities on the environment, the 2003 Sustainability Report includes a social cash flow table, based on the targets of the cash flows generated during the fiscal year: 2009*

2008*

2007*

Net cash received for the sale of products and services

11.084 10.407 9.435

Flow received from financial investments

8

17

15

Cash received for financial sales

10

1

40

Total flow of added value

11.101 10.425 9.490

Distribution of flow of added value Remuneration of employees

1.792

1.703

1.473

Payment of taxes

391

360

355

Return of financial debt

197

155

-214

Dividends given to shareholders

662

662

522

Corporate social investment

10

9

6

Cash retained for future growth

953

20

568

Payments made outside the group for purchase of merchandise, raw materials and services.

6.587

6.597

5.839

Payments made outside the group for services received and for investments

510

937

941

Total

11.101 10.425 9.490

* In millions of euros

http://www.inditex.com/en/corporate_responsibility/sustainability/

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Product/Service Zara Novias will include wedding attire for both men and women. It will be a single store which can fulfill all of a customerâ&#x20AC;&#x2122;s wedding needs. There will be a basic line of dresses as well as a premium line. All standard dress designs may be customized or altered, or a customer may come in and have their own vision of the perfect dress ordered. Zara stores in different countries will have distinct lines according to the culture in the area. A selection of bridesmaidsâ&#x20AC;&#x2122; dresses and flower girl will also be offered, with alterations available for those as well. In addition to dresses for sale, there will also be the option to rent from a certain selection in stock. Not all brides-to-be are able to spend a huge sum on a dress they will only wear once, so renting is an often utilized option. A similar selection of tuxedos will be offered both for sale and rent. Groomsmen will be able to rent tuxedos to match the groom at the Zara Novias store also. The Zara Novias collection will be a more fashion-forward line than many other wedding stores. This will help distinguish its products from competitorsâ&#x20AC;&#x2122; products, enticing consumers to shop at Zara stores. The bridal line will have some wedding gowns which are slightly conservative, and others which are a bit more edgy. Bridal accessories, including veils, hats, and bridal lingerie will also be offered for sale. The new products will keep in line with the current image which Zara portrays in its other lines of apparel. All designs will be focused on young brides looking to be chic on their big day. Dresses for rent will help young brides on a budget look fabulous without spending a lot of money.

Target Market: Products could be sold globally to anyone getting married. The target markets for Zara Novias are in Spain, USA, and some Asian countries (Japan, Singapore, and UAE). These three

5


countries will be a model for the three continents in the world to launch the new department. Zara Novias in Spain, can be a model in Europe. Then Zara in the USA is for North and South America. Japan, Singapore, and UAE can be models for Asia. These locations have the most potential to market new products, because there will be an additional department introduced to the existing stores. Spain is the home country of Zara headquarters, so the new market should start from its location, in order for the difference will be recognized. The USAâ&#x20AC;&#x2122;s main characteristic is that there are many immigrants from all over the world living there, thus introducing this product there is a possibility to attract the market and build the awareness of customers about the new line to several ethnic groups. Japan, Singapore and the UAEâ&#x20AC;&#x2122;s main characteristic is that they may be used as a starting point to introduce Zara Novias into Asia to notify that this product is also available in that region. Therefore, for Asian markets, if other Asian countries show interest in having Zara Novias in their countries, they can refer to those places. The target market is focused on people who are getting married, their families, and also their guests.

The new department will first be introduced to the store in Spain, where the Zara home base is located. The initial store chosen is Zara in Madrid in the shopping area (GRAN VĂ?A, PRECIADOS, SERRANO). Serrano is an ideal location as it already has many known brand name stores. Indeed this location gives Zara the opportunity to place our new line in the midst of other known brands getting the attention of shoppers who come in great numbers.

Extending the new department in Zara USA locations such as New York, Los Angeles, Las Vegas, and Chicago has the potential to attract the overall market because of the market size

6


and already established goodwill of Zara. Thus we may have customer acquisition. These cities are also hosts to tourist from all around the world that will help us to achieve brand recognition in other countries once we expand. In Asia we can introduce the line in Singapore, and UAE to start with because these locations are the countries that may influence other countries from area, especially Asian countries.

Zara is known as high image of fashion, therefore the Zara Novias department will be targeting upper middle class customers as their anticipated market. The wedding dresses offered for sale will be less expensive than the famous designer dresses, such as Vera Wang and Oleg Cassini. The dress designs will be fashion-forward rather than very conservative; so as to keep in line with the other clothing that Zara has for sale. This will attract a younger crowd of consumers, who may not have a lot of money to spend. The option to rent will be another attraction to the young target market.

Consumer Segment Zara Novias will use a product differentiation strategy to separate its products from other producers of wedding apparel. Zaraâ&#x20AC;&#x2122;s brand image will focus on producing limited designs for the product in order to create scarcity of the products. Zara Novias will offer different designs than other wedding dresses available. With advance payment, custom design work will be available. Strong customer service. Therefore, this brand image motivates the customer to buy, especially for the wedding items which everybody wants to be unique for their own wedding. The differentiation strategy will offer limited designs with many variations for the apparel.

One of the new offerings is the unique service of renting a dress instead of just buying

7


one. This is part of the differentiation strategy, because some people may think that getting married only happens once, and the wedding gown is only going to be worn once. So this new service is offered for the people who have the thought like that; so Zara will not lose their customers. Considering this service, after the dresses are rented out, the dress design will be modified and become the new model in order to keep the model up to date and will a be limited edition model.

Targeting the customer segment is the group of people who like fashionable stuffs. Thus, in this business plan the target customer segment are modern people, middle upper social class. This is the customer segment that is potentially attracted by the products. They are the group of people who are aware of new products and services offered in the market. Typically these people are not price sensitive, so they will look at the quality and an affordable price. By looking at the prices on other Zara products this would be a fairly high cost product. Zara brand is expensive in US, but relatively cheap in other countries, such as Spain.

Production Site Service personnel will be on location to deal with consumers face to face. Wedding dresses must fit properly and would be tried on prior to purchase, and might need to be fitted, adjusted, or hemmed. For this, experienced staff will be required who will undergo training before they start working on the shop floor. Each store will have a dedicated staff of at least six personnel to accommodate the customers according with a design consultant. Zara has already been operating its business in many countries. Therefore for the wedding department, the operation side should be in each headquarters in existing stores, where the market will be. Its goal is to have lower costs for distribution and also fast distribution with

8


eco-friendly distribution. It is aligning with the corporate social responsibility of Zara. Having manufacturers close to the store will give effective and efficient distribution of the products and also minimize the inventory in the warehouse and increase the products available in the store to be displayed. This distribution affects pricing which can be compared with the competitorsâ&#x20AC;&#x2122; which can provide the products faster. This strategy can be a measurement for ensuring the process and delivery time for the products available. There is also a new service aspect which will be provided in the new layout of the store. The layout will keep the original Zara concept which is simple but elegant. Therefore, the plan for the layout is creating the store view to look like the wedding ceremony or wedding party. The new concept also aligns with the arrangement of the dresses which will relate with the wedding theme of the customer and also the display will support the theme. For example, the dresses which may be worn outside will be put on the outside wedding ceremony section, and vice versa. Arranging that way will give the easiness for them to mix and match the dress with the party concept while they are choosing the dress. In this store department Zara Novias will provide photo booths, for couples who want to take pictures with their dress. There are several photo booth themes that the customer can choose from. This enables couples to have a pre-wedding picture to be placed on their invitations.

Entry Mode The new Zara Novias line of wedding apparel will be added to existing Zara stores as a new department. This extension of existing stores is aimed at lowering costs, as opposed to opening brand new stores, to achieve economies of scale. It will make introducing the new products all over the world easy to do both quickly as well as cost-efficiently. The money saved by not purchasing new stores will allow Zara to continue to remodel their current locations

9


according to the new global concept store layout which has been introduced in the New York Fifth Avenue location. (http://www.prnewswire.com/news-releases/zara-opens-its-new-globalconcept-store-on-new-york-citys-fifth-avenue-142666705.html) Zara has a strong fashion influence all over the world, and adding the wedding line to existing stores will ensure that the new products are associated with the already existing reputation of Zara as a whole. Production of goods will be allocated similarly to how Zara operates currently for their other fashion lines. In some locations it may be cheaper to outsource production, or make products locally in others, depending on the region.

Staffing The new Zara Novias section of existing stores will be managed by current Zara staff in that location, however new staff must be hired to assist bridal customers specifically. The managerial staff will be selected polycentrically, or according to the culture of Zaraâ&#x20AC;&#x2122;s home country of Spain. This way the store as whole will resemble closely other Zara locations and uphold the global image Zara has created. Some members of this staff will be relatively low skilled, low wage employees to handle the larger amount of inventory and stocking needs required by an additional line of clothing. Other employees will need more specialized skills to make sure that all customers experience great customer service. These employees should have some experience or training specifically with wedding attire. Each location will also have a fitter to help alter dresses or tuxedos as they are purchased. Employees for fitting dresses should be selected for being the best at what they do, regardless of where they are from, or selected geocentrically. There will also be designers specifically for each cultural region to create unique lines of wedding attire for different markets. Designers should be

10


hired according to a polycentric policy, to make sure that wedding designs fit with the cultural area they are being marketed in. This is very important since wedding dresses vary greatly from one place to another. The specialized staff for this new department will be allocated into three staff teams. There will be fifteen customer service providers per store, one style consultant and twenty designers for production. Additionally, a logistics and administration team will be required to source raw materials, monitor production and ensure integrity of the supply chain. Supervisors, line managers and administrative staff will be hired to cope with the new workload.

Marketing Marketing will be focused on regional advertising and promotions focused on customer needs. Considering that there are different cultures around the world, marketing tasks should be different in each region. The first thing to do is understand how Zara is different in other countries. Zara marketing is currently focused on the store. A source that analyzed Zara said that Zara spend 0.3 % of the revenue for advertising. As the same time it mentioned that marketing does not focus on advertising. Zara has a competitive advantage for advertising through its store location, layout, and product life cycle. Thus, Zara Novias should have an additional marketing effort from the existing products. Zara will advertise the new product line by changing the store layout, highlighting the new section prominently.

Marketing Mix ď&#x201A;ˇ

Product:

It is a product of sporadic purchase, so the distribution has to be selective. This means that Zara Novias will be located to distribute wedding products in specific locations where other

11


big brands are located. Zaraâ&#x20AC;&#x2122;s concept of simplicity will be maintained in the new line, and all sales will be personal. Furthermore, the product is a specialty product which has a strong brand loyalty, requires a special purchase effort, and little price sensitivity. The products usually have high price. As Zara aims to provide a premium product, the emphasis would be more on product quality. This will be ensured by using only quality fabrics and premium designs that appeal to high end shoppers. The standard line of gowns can have a mix of both premium and mainstream fabric. On the other hand it will still require exquisite styling that reflects the brand image of the company. Product development consists of : 1. Portfolio of products 2. Product differentiation 3. Design 4. Packaging 1.The Portfolio of products mix : width and depth. - Zara Novias will plan to market 10 standard bridal gowns at each store. These gowns may vary in color and size depending on the regional market dynamics. The products will be similar and customizable through add-ons which will be available for purchase separately. Additionally, it will be the stores responsibility to carry out any alterations. This value added service will be free of charge for the customersâ&#x20AC;&#x2122; benefit. 2. The product differentiation Zara Novias will differentiate its product from competitors through customization that will be offered through additional value. Furthermore the new line will also rely on the extensive market research to bring regional customization such as various color combinations and

12


incorporation of local trends. Such measures will ensure that Zara Novias is able to capture a wider segment of the market. It will not only benefit customers but also set the store apart from other rival businesses that offer just a standardized product portfolio for bridal wear. Another service that our customers can enjoy are the custom made gowns with the help of a design consultant at each store. The aim is to be able to offer A Zara Novias brand gown that is in line with local traditions while still reflecting the style statement that the company stands for. 3. Designer As this is a new product line the company will need to hire a separate design team to design the gowns for production. This design team will include regional design experts who are experienced in the bridal wear segment. The designers will also select and create customized add-ons for the gowns. 4. The packaging or presentation It will be important for Zara to display its products prominently. For this purpose Zara would need to design the store sections while keeping in mind the ambiance and overall theme of the section. Dresses will be displayed properly under bright lighting. The customer will be able to choose between gift and ordinary packing to carry the gown. The packaging of Zara is very simple, shops with lots of lighting, shops divided into sections.

Packaging The packaging of the product is important and therefore be of similar quality. After the customer has purchased the items will be in packed in a box to keep the dress from gathering dust or getting damaged. It will be a gift packaging that will be simple and elegant.

13


Sketches of possible color and black and white boxes.

ď&#x201A;ˇ

Promotion

The most important thing is to design an advertising promotional plan for our product launch. These plans are most active when the product is going to be launched to the market for the first time. For example: two weeks before the product launch, the advertising campaigns start, then, before the launch the promotion start at the POS to leverage the advertising and capture the new market. Therefore, it helps to build the customers awareness toward the products. In order to introduce this new department, the promotion plan to the market should be in the form of a press conference. Therefore to promote this product we refer to integrated marketing communication.

1. Fashion Event such as fashion shows and fashion magazines; target couples, not the general audience, it will save money and get us the same results. Launching the project through fashion shows that mark the beginning of a new line. These shows will be conducted in fashion capitals

14


such as Milan or Paris where celebrities and important media personnel will be invited to highlight the event.

2. TV advertisements on fashion channels Such as StyleOne and FashionTV. The upside of this channel of advertising is that we can reach a broader customer base that is all over the world.

3. An innovative approach to conventional marketing techniques will be to hire celebrities that are planning to get married as brand ambassadors. Through this promotion activity, the value from Zara Novias we will not only advertise the brand but also highlight the practicality of our product.

4. Placing the advertisement in wedding magazines, newspaper, gossip magazines, and radio ads. The advertisement will include the information about the events, discounts, exhibition, etc.

5. Zara Novias can also gain publicity by showcasing the gown in store windows and by visibly placing the gowns in view of the shoppers ď&#x201A;ˇ

Price

Considering that Zara Novias is planning to offer a premium product, the pricing would reflect the cost of materials. Additionally, the creativity and design value that the brand will create will allow us to charge a premium price from the consumers. Also, considering the fact that many couples spare no expense on their wedding a premium pricing will still result in steady sales.

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The possibility of a renting service has also been offered for consumers who are unable to afford a high end gown but are willing to rent it for their wedding day. The standard line of gowns will be available for rent without the option of additional customization. A single gown may be rented up to six times. The rental price would be (cost + 20%) divided by six. After six rentals it will be sold at a heavy discount.

For the designer line a design consultant will assist each customer in choosing and designing a one of a kind gown. It will require that the customer deposit a non refundable retainer of USD 500 before consultation. This amount will be deducted from the final price of the gown which will be based on a cost + 40% pricing.

Zara Novias will aim to price its standard gown between USD 1000 to USD 2000 while the designer line will start from USD 1800 and above. ď&#x201A;ˇ

Place

With locations in important cities it will be more efficient to incorporate the new brand within the existing stores where possible. In case Zara feels that new locations may be required to better serve customers, it can open new stores just catering to bridal wear. Our POS are at the stores themselves. Zara Novias will have a central manufacturing facility from which individual stores will be supplied. This will ensure standardized product quality and control over materials. Having POS will effectively manage the inventory of the dresses with up to date information on sales and in stock products. The primary mode of sales will be through stores but with a dedicated staff to ensure a smooth shopping experience. Nowadays it is very important to have a

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website to promote stores, and what products are sold (www.zaranovias.com).The usual website of Zara (www.zara.com) gives the chance to buy online with a shop online, but a dedicated portal for bridal wear will be important as customers will have a lot of design concerns and addons to choose from. Zara Novias can also use social media to promote sales. The company can set up a retail store app for Facebook. This will facilitate customer service while streamlining the purchasing process.

Payment Arrangements Payment Methods for Zara will include the following methods: Cash: Cash will be accepted at local Zara stores. Cash will be traded in local tenders relative to the local Zara store in which the transaction is taking place. For large cash transactions, the appropriate tax forms will be filled out on-site by the customer. For example, in the United States when a purchase exceeds $10,000, an IRS Form 8300 will be necessary. Form 8300 data includes the name, address and social security number of the buyer. The same rule applies to cash equivalents such as traveler's checks, bank drafts, cashier's checks and money orders.

Check: Check policies will be established per store. Creating and adhering to a check policy may help avert legal hassles. Common policies require that checks be written and signed in the presence of the seller, drawn from local banks, not written for more than the purchase price, and various other stipulations.

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Cashing Old Checks: The Uniform Commercial Code, which governs banking practices in most states, declares that banks may refuse to honor checks dated back six months or more. It will be up to local Zara stores to deposit checks as quickly as possible.

Bounced Checks: If a check is returned because a customer's account is closed, or because the customer has insufficient funds to pay for the transaction, calling the customer is the first step. Though several states and various nations have laws specifying what kinds of threats can be made, the hours during which calls can be made to debtors, and other methods of phonebased collection. Writing a collection letter, contacting the bank, going to small claims court and using a collection agency are all common secondary steps.

To help limit check abuse, photo ID will be verified at the time of check writing. If photo ID is unavailable, phone number or other immediate contact information will need to be written on check.

Credit Card / Charge: We offer the following payment methods: Visa, Mastercard, American Express and Paypal. Web orders, especially credit card orders that donâ&#x20AC;&#x2122;t go through third party vendors, will be secured on the Zara website in the following manner: The data is transmitted SSL-encrypted. For payments with Visa and Mastercard only SET transactions (secure electronic transactions) are accepted. After verifying that the card is included in the SET system, the system will contact the card-issuing bank to enable the buyer to authorize the purchase. When the bank confirms the authenticity, the payment will be charged to the card. Otherwise the order will be cancelled.

18


Payment Plans: Zara will issue lines of credit to customers in an effort to make the purchase of a wedding dress and other apparel more attainable. Guidelines will be listed in a chart format below:

Annual Percentage Rate (APR) (based on creditworthiness)

APRs range from 5.00% - 7.99%, depending upon creditworthiness. This is a variable APR determined by adding a margin of 6.74% to 16.74% points to the Prime Rate Index.

Credit Limit

Up to $15,000, depending upon creditworthiness.

Variable-rate Information

Variable-rates will not be utilized

Grace Period for Repayment of Balance for Purchases

Your due date is at least 22 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.

Annual Fees

None

Minimum Purchase

None

Interest Charges

Minimum Interest Charge is $2.00. Interest Charges are based on average daily balance.

Promotional Financing Offers

Subsequent purchases may be subject to different promotional financing terms depending on the promotional financing offers available at time of purchase.

Minimum Monthly Payment

Payments equal 3% of your balance or $20, whichever is greater.

Transaction Fee for Purchases

None

Late Payment Fee

Up to $25 for the first late payment. Up to $35 for additional late payments within the next 6 billing cycles.

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Capital Funding for Zara Novias will come from Inditexâ&#x20AC;&#x2122;s own cash resources within Zara Company. Below is a consolidated Balance Sheet and consolidated Statement of Cash Flows from 2010 and 2011:

Consolidated Balance Sheet:

Consolidated Statement of Cash Flows:

By examination of the Real-Life Balance Sheet and Cash Flows of Inditex, one can see that funding for Zara Novias can be handled within the firm without the need of tapping into outside resources. With 3.4 billion Euros in Cash and Cash Equivalents at the end of 2010, 20


financing and resources for Zara Novias will come from those available resources. Inditex is in solid financial standings and has the ability to venture out for growth.

Financing a company from within is often a double-edged sword. On the list of advantages, there is the ability to do as Inditex sees fit, without fear of alarming potential lenders. Inditex has performed very well in the last few years, and should look into expanding into other markets. This is of great advantage to Inditex to be able to spend and invest resources where it sees fit.

On the negative side of using self raised capital to invest, Inditex could be using those funds elsewhere to either invest into growth funds, paying off long-term debt and debt due, or investing in other money making opportunities. It also deprives shareholders from receiving dividends and may even result in cash flow restraints for other divisions. Therefore companies tend to satisfy their financial needs by raising capital through multiple means. Zara would also employ both debt as well as equity financing to ensure that large sums are raised that can be utilized to expand rapidly as well as build a strong financial base for the new division. As with any investment, Inditex runs the risk of losing its initial investment and possible future growth in its main industry if too much time is spent on the new venture, Zara Novias.

Likely Challenges The most challenging factor for the company will be to come up with a design range that satisfies consumers all across the world. Even in a globalized world there are cultural differences that result in unsatisfied consumers who do not find the standardized product in accordance with their traditional norms and customs. The Zara Novias department in different locations and

21


cultures will need to be adjusted with the location’s surrounding culture kept in mind. Launching this new department will be done in several locations at once, in several regions that have already been targeted. At this point, marriage is a universal concept. The differences will occur by adjusting to the separate cultures. Therefore Zara Novias will provide dresses that will mesh with the culture in each region. To provide this product Zara Novias will have local designer in location in order to produce the product based on the local culture but still in fashionable to coincide with Zara’s brand image. In order to overcome this challenge Zara Novias will need to come up with customization based on colors and add on materials that incorporate local traditions and customer preferences in the products. Zara will also be facing competition from other wedding designers who may try to replicate the marketing strategy and divert consumers. Another major factor that will affect the business is the standard of living in various countries. Although Zara is present in more than 73 countries, not all countries have a high per capita income. This may impact the business since bridal wear may not receive the same consumer attention as other Zara apparel lines. The company will conduct extensive market research to ensure which countries, and more specifically cities will, be suitable for the initial launch of the brand. Over time, as the brand gains popularity, more cities will be added to the list, capitalizing on the success of the brand as a whole. Indeed, expanding the store is totally different than the usual Zara business strategy. There are some challenges involved with introducing a new department to keep up with the development of fashion. Fashion preferences changes very fast. Indeed, it’s a challenge to provide the up to date fashion style especially for bridal stores. It will become a challenge for Zara Novias to differentiate its products and show the characteristic of Zara’s value on the product. Having a new department may have introduce the challenge to acquiring new customer awareness about the Zaria Novias line and appealing to

22


consumer preferences.

In order to overcoming these challenges, Zara Novias will have competent people to deal with the fashion development, in order to produce and create new fashionable dresses and tuxes, etc. The pricing and the products will depend on the raw materials for the fabrics in each region. The prices will be slightly different for each region. Zara Novias can capture the market because there will be a fresh fashion aspect for the wedding apparel, therefore consumers will be enticed to purchase new products from Zara Novias.

Zara Novias is economically beneficial to the company because it will expand the companyâ&#x20AC;&#x2122;s product portfolio by targeting a new segment of the market. Another factor that can affect business is the economic situation in countries around the world. Although major economies have seen recessionary trends in economic activity since 2008, Europe has been hit the hardest. Therefore it will be in Zaraâ&#x20AC;&#x2122;s best interest to expand to emerging markets such as China, India, Brazil and Australia to diversify risk and take advantage of the economic growth in these economies. Many businesses also face decline due to changing dynamics of the market. The apparel industry is also dynamic with trends and fashion continuously changing. The company would need to be proactive in its approach. The aim would be to drive the change and become a trend setter which will give Zara an additional edge over its competitors

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Examples of culturally diverse wedding gowns:

I ndonesia (http://www.fashiontrend2012-13.com/?p=1060)

Dubai (http://www.meszarovits.com/wedding_slideshow.php)

Spain (http://www.mydresses.info/wedding-dresses/spanish-style-wedding-dresses.html)

USA (http://cfvproductions.com/)

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References Jimenez, M. Zara lanza un completo cambio de imagen desde Nueva York. Message post to http://economia.elpais.com/economia/2012/03/12/actualidad/1331533780_750507.html Zara. Our Mission Statement http://www.zara.com/webapp/wcs/stores/servlet/category/id/en/zaraS2012/18001/Our%2BMission%2BStatement Zara. Dear New York http://www.zara.com/webapp/wcs/stores/servlet/category/es/es/zaraS2012/190014/Dear%2BNew%2BYork Wedding Statistic. (2011). Statistics for the Wedding Industry [statistics]. http://afwpi.com/wedstats.html Zaraâ&#x20AC;&#x2122;s Business Model, Information and Communication Technologies, and Competitive Analysis. http://www.123helpme.com/view.asp?id=97642 Ayesha. (2012, February 27) . Indonesian Wedding Dress 2012-2013 Designs by Angles Paris. Message posted to http://www.fashiontrend2012-13.com/?p=1060 Colombus Ohio Videographer Wedding Photographers Ohio Colombus. http://cfvproductions.com/ Manuel Meszarovits Wedding Slide Shows. http://www.meszarovits.com/wedding_slideshow.php) Spanish Style Wedding Dress. http://www.mydresses.info/wedding-dresses/spanish-stylewedding-dresses.html

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Appendix 1. Team Business Proposal Title Page Use this template for the title page of your team report. Team # 232 Client (Company): Disney Product/Service (a brief description, 3-10 lines): Constructing resorts in various countries of the world, which will draw themes from popular Disney movies. Number of pages, including title page: 20 Team members: Name

Country

Anna Eliseeva Shanna McCray Janee Feeney Elena Galindo Haseeb Qamar Galuh Prasetyo Marhendra Putra

USA USA USA Spain UAE Indonesia

Did Not Participate (Please make a note if this teammate did not contribute during the project, has not replied to emails, etc.).

Please note that an electronic copy of this report must be submitted through www.turnitin.com (see above for submission guidelines). Individual instructors may request hard-copy submissions in addition to the centralized electronic submission â&#x20AC;&#x201C; please consult your instructor for further instructions.

0


Executive Summary: Our idea revolves around Disney creating resorts throughout the world which draw themes from popular Disney movies. The themes should relate to the location and type of resort, such as sea-side resorts taking their themes from “The Little Mermaid”, tropical resorts taking theirs from “Tarzan” or “The Jungle Book”, and more urban and formal resorts taking theirs from “Cinderella” and “Sleeping Beauty”. We believe that this venture can be profitable for Disney on account of it’s originality, the popularity of the Disney movies, and the unique experience such resorts can offer. The target market for this idea is based around families with young children, as well as couples looking for a place to have a wedding, or go on honeymoon. The goal is to provide a singular experience, of the kind that only Disney can offer, and create a place where people can go to relax and enjoy themselves.

1


1. Product/ ServiceAs consultants for Disney, the idea we propose is, “transforming the notion of a traditional resort by introducing ‘themes’ that are designed and based on several Disney movies and experiences.” Within this idea, we want to make themed resorts based off of previously released Disney movies. These resorts will be designed to match the settings and themes of the Disney movie(s) off of which they are based. There will be elegantly designed resorts, with large, beautiful architecture, which will have high structures that are riveted with detail. These resorts will take themes from the classic Disney Princess movies, such as “Cinderella” and “Sleeping Beauty.” The buildings will be illuminated at night in beautiful hues of purples, blues, and pinks, which will create an effect reminiscent of the movies themselves, but will not be enough to annoy the guests within the resort. There will also be resorts which draw their themes from other movies, such as “Peter Pan” or “The Jungle Book” which will have less classically elegant structures, and be based more off the forest and fantasy themes found in these movies. There will be ambient noise consisting of various tropical birds, and lagoon-type pools throughout the outside common areas. These types of resorts will be less formal, but equally as enjoyable and create just as much of a Disney experience for the guests. Within all of these resorts, we are trying to offer the idea that this is a place where dreams truly become reality for all ages. We will offer wedding packages so a bride can have the fairy tale wedding she has always dreamed of, as well as options of entertainment for children and adults of all ages including; scuba diving, swimming with the dolphins, a variety of pools, golf, spas, casino gaming, nightclubs, shopping deals,

2


and a reserved part of the beach for guests of the resort only. We want our guests to feel like royalty, princes and princesses, and the heroes and heroines of their own story when they enter our resorts. The resorts can be as pampering as our guests desire; spa services, room service, and being waited on hand and foot by your own personal guest relations specialist. Our resorts will have a utopian feel to them as if this is where the Disney characters go after they were in the movie. The rooms will be very luxurious in all of the resorts, with rich colors and thematically appropriate accessories. The client should invest in this project because there would be great economic benefit. The familiar and favorite themes, as well as the special touches will draw many people to these resorts. Disney can offer a relaxing, deluxe vacation in a first-class resort, with the sort of motifs that their fans have come to know and love in the movies.

2. Target MarketWe feel that there is a wide target market for our idea. We are an appealing resort for people and families of all ages, however, we can focus on the following demographics: -

Women ranging from 25-40 who are looking to get married.

-

Families with children aged 5-11.

-

Middle to upper class families/individuals. We would initially suggest targeting these markets in the United States, so as to

test the idea in an area already familiar with, and favorably inclined towards Disney. We believe that the first resort should be based in Lake Buena Vista, Florida, home of the

3


original Walt Disney World. Following the success of this initial resort, further resorts should be constructed in Anaheim, California, Urayasu, Chiba, Marde La Valle, France, and Pennyâ&#x20AC;&#x2122;s Bay, Lantau Island. We recommend that these be promoted as affordable luxury resorts, with options for any number of people ranging from two (honeymoon, couples vacations) to large families and groups (family vacations, weddings). We will offer more marketing to our loyal guests of the Disney Stores located all over the world and to the current/past members and visitors of the Disney Parks. We will have the opportunity to influence them a little bit more and be able to show them the dream come true experience they have always dreamed of. We can also offer them discounted packages since we will more than likely already have their information on file from previous purchases. There could also be a referral program and loyalty points so guests will want to return to our resort each time they go on vacation. Hopefully with all the right factors implemented they will choose where they go on vacation solely based off of where our resorts are located.

3. Consumer Segment Since the Walt Disney Company serves people all over the world, the target consumer market will include people of all ages, genders, income levels, races, and ethnicities. The primary consumer groups will be vacationing families and couples. Catering to these specific segments will increase the level of occupancy because they are more likely to arrive in groups rather than as singles; making them more profitable in the long run.

4


The family segment is a top priority because the Walt Disney Company and its affiliates are known for providing high quality family entertainment. It is crucial that this concept is the foundation that the new themed hotels are built upon, so that families can experience magical moments despite their locations. The couple segment was chosen because it is important to capture the different needs of the consumer. For example, the hotels will not only be for vacation purposes but for destination weddings and honeymoons. Persuading the consumers to choose a themed hotel rather than the usual Disney resort will be based upon differentiation. This strategy will require an atmosphere that goes beyond room service and complementary breakfast. Every guest will be immersed inside the wonderful world of Disney through the lenses of famous Disney characters. Every aspect of the typical hotel will be transformed into a magical experience that will engage and attract each guest to interact and live the life of a Disney star for the tenure of their stay.

4. Production Site: As we have already mentioned, we think that the first resort should be established in Florida, in the United States, so as to enter the market in a place already predisposed to accepting and using Disney products and services. This would provide a stable launch for the new venture, and would allow Disney to expand the themed resorts into the international markets. We believe that these resorts can be established in any major travel destinations or vacation areas. The many and myriad themes of the movies allow for flexibility in where

5


to build, as the themes can be adjusted to match the location of the resort. Sea-side resorts can draw themes from “The Little Mermaid” and “Atlantis”, and resorts located in arid areas can take themes from “Aladdin” and “The Lion King”. Most areas and climates can be catered to, and many Disney movies can cover several themes—movies such as “Peter Pan” and “Alice in Wonderland” for example, have themes that can apply to several different locations. There are also movies which lend themselves perfectly to specific locations, such as “Mulan”, “The Princess and the Frog”, and “Hercules” which are clearly set in China, New Orleans, and Greece, respectively. These are areas in which Disney can construct resorts, and in which they could expect to have a high volume of visitors. As these resorts are smaller than the Disney theme parks, there are more options as to where they can be built. There will not be a necessity to accommodate rides, or the type of interactive experiences which can be found at the various Disney Land and Disney World parks. The resorts we are proposing would be relatively self-contained, and provide attractions on a slightly smaller scale – such as the scuba-diving, pools, golf, and spas mentioned above. There would also be thematically appropriate entertainment within each individual resort, such as The Lion King Safari, the Never-Never Land Lagoons, and the Rapunzel Rock Climbing Wall, along with various treasure hunts, nature hikes, and learning activities. The actual, physical construction of the resorts should take place on-location, with resources and labour coming from local areas, when possible. We believe that the creation of these resorts – aside from offering a whole new experience for customers –

6


can generate new jobs in the areas in which they are established, and help towards stimulating the local economies.

5. Entry Mode For developing our theme, we need to cooperate with other investors to make it bigger than before. Here, the scheme of Disneyâ&#x20AC;&#x2122;s entry mode.

Market Research: organizing effort to gather information is about markets or customer. It is very important component of business strategy, especially for Disney.

7


Market Entry Strategisation is the planned method of delivering goods or services to a target market and distributing them. In this case, it refers to establishing and managing contracts in a foreign country. Establishment of sales channel: Since channel members must be convinced to handle a marketer’s product it makes sense to consider channel partner’s needs in the same way the marketer considers the final user’s needs. However, the needs of channel members are much different than those of the final customer. As we noted in the business buying behavior tutorial, resellers seek products of interest to the reseller’s customers but are also concerned with many other issues such as: In House Sales is a sale in which the listing broker is the only broker in the transaction.

The listing broker

may

have

found

the buyer or

another salesperson working for the broker found the buyer. Representative Office is an office established by a company to conduct marketing and other non-transactional operations, generally in a foreign country where a branch office or subsidiary is not warranted. Representative offices are generally easier to establish than a branch or subsidiary, as they are not used for actual bussiness and therefore there is less incentive for them to be regulated. Direct Investment direct investment by a company in production located in another country either by buying a company in the country or by expanding operations of an existing business in the country. Joint Venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets.

8


6. Staffing Staffing is the selection of individuals in order to execute a job and to be responsible for it. In any company, this issue is in charge of the Human Resources Department which includes all the activities that managers perform to develop to plan an effective workforce. This department also has to understand the employeeâ&#x20AC;&#x2122;s needs. It is one of the most important parts of any company. Human resources is also a part of the whole strategy of any company, in order to hire the best employees for a specific job. That is why there are three main stages:

1) PLANNING: business plans to ensure the number of employees available. 2) PROGRAMMING: skills, activities. 3) EVALUATE: check the work and feedback.

It is also important knowing our needs as a company. If our company is not going to suffer big changes, we could easily predict which jobs will be unoccupied (by retirement for example). In this case, the salaries would be the same. In the case that there is going to be an important change you have to look for specific people who could reach the new companyâ&#x20AC;&#x2122;s expectations. In any of this cases, there are different ways of staffing (recruitment) 1)

From inside the organization: people already hired by the company would

have a promotion into a better job according to their skills. The main advantage is that this kind of hiring is cheaper because you do not have to spend money in advertisements

9


or interviews. You would have to check which employees are motivated, the education, curriculum, languages, experienceâ&#x20AC;Ś 2)

Form outside the organization: the main advantage is that outsiders bring

innovation, new ideas, also different experiences that could turn into a competitive advantage for the company. The disadvantage is that the risks are higher because the outsiders are less-known. You would need to consider availability, training on different universitiesâ&#x20AC;Ś Once the new the recruitment has been done, then you have to select the most qualified candidates. This means interviews, tests, role plays which give us the possibility of knowing better our future employees and learn how they would act in certain situations. After selection, comes the integration in the new company. We could help our new employees through orientations, training and development. The first six months are very important because this is when the people established. Training means advice our employees how to improve their job in order to be better. Development, means which skills are the most important in their jobs. As a conclusion, the whole process of staffing is a conglomeration of stages in which the future employees are deeply analyzed. The objective is to know our future employeesâ&#x20AC;&#x2122; skills in order to develop them through personalized programmed. Definitely this is a win-win decision because the employee improves their professional activity and the company improves their profits.

10


According to our idea (Disney) recruitment should be done from both : inside and outside the organization. Why? Inside the organization would mean that although our idea is a new one, if we hire staff who had already worked to Disney, the enviroment would not be new from them so that would be a good advantage. Also from outside the organization, maybe graduates in Tourism or International Relationships in order to have knowledge about how to direct the strategy. All the people hired should be enthusiastic, extroverts, funny..because above all Disney represents the idea of having fun so our staff have to express that.

7. Marketing The core of the marketing strategy will be promoting the unique and fun experience that can be achieved by choosing to reside at Disneyâ&#x20AC;&#x2122;s new chain of themed resorts. Communicating this message will differentiate the properties from other resorts and lodges located nearby. In order to ensure that our marketing activities are productive and successful in reaching a larger audience we will need to conduct primary market research. Based on the market segments that we are planning to target, separate marketing strategies may be implemented to achieve desired consumer response. Potential guests will be reached by using magazine and television ads, posters, and web pages; other advertising activities include social networking and promoting special offers. As far as the spending budget is concerned, it important to keep cost low, which would be achieved by using resources that are readily available for use at the Walt Disney Company. In terms of advertising in magazines, placing an ad in the Getaways section of Disneyâ&#x20AC;&#x2122;s Family Fun Magazine, which focuses on family vacationing, would

11


be highly effective when trying to target parents. Airing commercials about the new hotels on the Disney Channel would attract the younger consumers. While programs may incorporate trivia challenge. The winners of this challenge can be offered free stays at the resort along with complimentary entertainment. Many consumers tend to book their vacations through travel agents and tour operators, by offering these business additional discounts and attractive packages we can ensure that our resorts and hotels are recommended and booked through these agents. This strategy will be effective as long as the message is conveyed properly and the consumers are left with feelings of curiosity and excitement, which leads them to booking a room in one the new Disney themed resorts. Moreover the location of our themed resorts will be important in publicizing the new project; by opening initial chains near Disney theme parks we will enjoy free publicity. the company can target new consumer segments by focusing their marketing efforts on young couples. This can be achieved by offering wedding and honeymoon packages couples with theme park entertainments. Recently many hotel chains partner with airline companies to offer competitive airfare and stay packages to their consumers. Such deals will allow Disney to attract international tourists. Another aspect of marketing maybe to target online wholesalers, as the online hotel booking system generates considerable bookings it will be helpful to offer deals on particular resorts and room types to specifically target this tech savvy consumer base. Moreover the company can also conduct roadshows based on Disney themed characters that will promote the project in the region. Such events are cost effective and reach a large audience as they are covered by the press and media.

12


Independent ranking companies may be invited to evaluate the hotelâ&#x20AC;&#x2122;s facilities in order to obtain positive reviews that are followed by many consumers who rely on expert opinions. Overall a marketing mix of direct marketing and below the line promotions will help the business gain consumer attention and achieve sustainable growth.

8. Payment Arrangements One of the most important keys of Disney is the payment arrangement. For satisfying all visitors and making a breakthrough with our theme based experience, we give special offers to visitors who want to spend their holiday in at Disney Themed Resorts with their family, relatives, etc. Special promotion prices will be given with extra bonuses for the luckiest visitors. We divided theme park tickets by quantity of day. There are 1- Day 1- park tickets until 6-days theme park tickets which is every park tickets will be divided into two categories, park per day ticket and hopper ticket. It will be classified based on range of ageâ&#x20AC;&#x2122;s visitor. On 3-Day 1 park- park tickets, visitor get the special discount if the visitor buy ticket by online, visitor can save up to 10 $ per person, including classic disney princess movies at disney land park, scuba diving, swimming with the dolphins, a variety of pools, golf, spas, casino gaming, nightclubs, shopping deals,. On 4-Day 1 park- tickets, visitor get the special discount if the visitor buy ticket by online, visitor can save up to 15 $ per person, including disney princess movies at disney land park, including classic disney princess movies at disney land park, scuba diving, swimming with the dolphins, a variety of pools, golf, spas, casino gaming, nightclubs, shopping deals,. On 5-Day park- tickets, visitor get the special discount if the

13


visitor buy ticket by online, visitor can save up to 20 $ per person, including disney princess movies at disney land, scuba diving, swimming with the dolphins, a variety of pools, golf, spas, casino gaming, nightclubs, shopping deals . On 6-day 1 park ,visitor get the special discount if the visitor buy ticket by online, visitor can save up to 20 $ per person, including disney princess movies at disney land park including classic disney princess movies at disney land park, scuba diving, swimming with the dolphins, a variety of pools, golf, spas, casino gaming, nightclubs, shopping deals. And we give more easiness for visitor to make reservation. Disney land also give special event, such World of Dream World ticket. Visitor can take â&#x20AC;&#x153;The Colosal show of Peterpanâ&#x20AC;?, secure a great vantage point for World of Dream with special dinner packages and pre-packaged meals for the first showtime when you pre-order online from one to 30 days in advance.

9. Capital Capital is a very complicated subject for any business. It has to decide whether to utilize its own resources (equity) or borrow from external sources (Debt). In both cases there are certain pros and cons that can affect a business. Firstly Disney being a large conglomerate has ample funds to invest in its themed hotels and resorts project. With over $40 billion in revenues last year (Forbes 2011) it can easily invest in luxury resorts without facing financial difficulties. Additionally by employing its own capital the cost of business would be lower than borrowing from external sources. The business would be operating interest free while all the revenues will go back to the company. After the initial years this will help the business grow financially and achieve higher revenues.

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Some businesses although capable enough to invest in new projects prefer to outsource them to other businesses that have expertise in that industry. Disney can negotiate an investment and operation deal with an interested hotel operator who would pay royalties for using Disney themes and branding. It will result in an added revenue source for the company and at the same time an effective business strategy which does not burden the management. In contrast the company may decide to raise capital by issuing new shares. This would help bring additional investment and as the company is in good financial condition it wonâ&#x20AC;&#x2122;t be a problem to attract investors. The company can buy back some of the shares if it wants to from the revenue generated from this venture. Sometimes companies tend to opt for Debt financing in case they do not have enough funds or are hesitant in utilizing their own capital. In such a scenario Disney can leverage its assets to obtain a loan from the bank. Current assets such as receivable can also be marked for collateral in obtaining commercial loans. In case the company is unable to pay back the loan the bank take over its receivable and recovers payments from the debtors. Debt financing can be costly as it would require the company to pay interest. The interest percentage is usually determined by evaluating the project costs and risk that might affect revenues. It is also connected to overall industry performance and the standing of the individual companies. In case of Disney with over $72 billion in assets and debt to equity ratio being less than half. It will be easy to obtain soft loans with payback over a long period. It may translate to revenues being diverted to pay interest and subsequently the principal but will ensure that other divisions of the company remain unaffected from this business venture. Large enterprises such as Disney also utilize their brand value to obtain funds. For short term financing banks tend to lend business nominal

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amounts of money to fulfill their short term financial obligations. These short term loans are usually given based on the goodwill of the company with an agreement of return which is usually with 12 months. Shareholders sometimes prefer to raise capital through debt financing as it helps raise large amounts of money by leveraging assets that may otherwise be of little use for the project. The company has the opportunity to expand quickly and create a brand image comparable to the prestige of The Walt Disney Company. Keeping in mind that self-financing being the least expensive method of raising capital and debt financing allowing large sums of borrowings, companies tend to balance the two. We would apply the same approach to ensure that the project does not face financial constraint in case of slower revenues. Many businesses although in profit declare bankruptcy due to unavailability of cash and cash reserves. It will affect not only our future business project but also the Disney brand that has flourished into a multibillion dollar enterprise in the last 9 decades. Hence a mix of debt and equity will ensure a strong financial foundation for the project.

10. Challenges Our project of themed hotels based on Disney movies will have both external and internal challenges over the course of its life cycle. Firstly assessing the project compared to the larger hospitality industry we will be facing competition from other hotels in the area. Moreover as business activity will grow there will be new establishment that will try to compete with our hotels by employing similar concepts in order to gain consumer attention. Externally the project will be dependent on the economic activity of the region.

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In case of a recession it is common that consumers spend less on luxury vacation trips which can have an adverse effect on our business, moreover if there is political instability in the country tourist might prefer other locations opting for alternate hotels. The company will need to follow market trends carefully in order to be able to anticipate consumer behavior. This will help us ensure that upcoming tourist destinations are already catered by our themed hotels and resorts while still providing unparalleled service at the ones already established. In the recent yearâ&#x20AC;&#x2122;s governments around the world have identified hotels to be a source of environmental pollution. We will need to put in place an effective environmental friendly service plan in order to insure that governmental laws and regulations are met while providing a cost effective quality service to our guests. It has been a common concern that some tourist destinations have become costly enough to discourage visitors which are essential for hotel resorts. With time we might face the dilemma of having to charge our customers a considerable amount of money in order to provide unparalleled service. Stricter labor laws and rising fuel costs will only raise the cost of doing business. It will require more cost effective business practices in order to remain competitive. A similar situation may affect our business globally incase tourism industry starts to decline due to rising travelling costs. This will not only affect us but also the rest of the industry, limiting tourists to regional destinations that are cost effective and better suited to their taste. We will need to establish hotels and resorts in regions that have known tourist destinations and instead of targeting every country it would be wiser to restrict ourselves to regional locations that serve a large land area than just a single country or city.

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As we will be targeting, among others, honeymooners and couples looking to elope in some of our destinations it will be important to research local demographics before opening a hotel or resort. In countries with a younger population such as India the probability of achieving a higher occupancy rate will be much higher compared to a country with an older population such as Germany. We will also need to assess the standards of living in prospective locations. Offering a premium vacationing experience it is important those regional tourists are able to afford our service. Hence an assessment of per capita income would be detrimental in our decision for hotel location. Countries like UAE, which have higher Per Capita income and an overall high standard of living in the region, will be suitable for a themed resort that offers unparalleled service. A hotel is not only challenged by external factors sometimes internal elements can affect the business as severely as external ones. As we are planning to theme our hotels and resort on Disney movies, the demand for such themed resorts will be directly affected by the popularity of the Disney movies. From one generation to another as the interest in Disney movies change the popularity of our hotels will also be affected. It is therefore essential for the company to invest in marketing of its characters and movies in order to keep the hotel themes relevant. It will not only create interest with the general public but create a base of loyal fans who would want to stay at such theme hotels and resorts in order to experience the Disney experience. Additionally as the Disney brand grows it will incorporate new characters and themes, and the logistical cost of maintaining and operating a portfolio of brands will rise making it difficult for managers to run the business productively. It will also affect the decision of locating new resorts or which themes would best satisfy consumersâ&#x20AC;&#x2122; demands. Should a hotel in South Africa be

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themed after â&#x20AC;&#x153;The Jungle Bookâ&#x20AC;?, keeping in mind the geography and climate of the region, or should it be themed as a Cinderella movie in order to tap a niche that is willing to spend more in order to enjoy the premium hotel experience. These decisions will require extensive market research that will take time and money without a guaranteeing 100% success. As consumer tastes change and Disney movies are passed on to coming generations the challenges faced by our business will also increase. In order to maintain our competitiveness we will need to be proactive and anticipate change to be able to prepare for such challenges and take necessary measure. All of these external and internal factors will affect the business but at the same time they will propel us to a higher excellence in the service we will provide.

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International Youth Collaboration 2012

Team #238 Company : Google By : team #238

[WHEN NOTIFICATION AND GIFT COMES TOGETHER IN GOOGLE] Kenna Vaughn | Goda Simonaityte | Prahariezka Arfienda Satrianti | Dawid Robaszkiewicz | James Farias | Raul Nava-Fonseca


Team Business Proposal

Team # 238 Client (Company): Google Product/Service (a brief description, 3-10 lines):Google calendar important date reminder featuring customizable e-cards and gift options

Number of pages, including title page: 20

Team members: Name

Country

Did Not Participate (Please make a note if this teammate did not contribute during the project, has not replied to emails, etc.).

Kenna Vaughn

USA

Goda Simonaityteâ&#x20AC;&#x2122;

Lithuania

Prahariezka Arfienda Satrianti

Indonesia

Dawid Robaszkiewicz

Poland

James Farias

USA

Raul Nava-Fonseca

Mexico

2


TABLE OF CONTENTS

Section

Page

Cover.....................................................................................................................................2 Table of Content...................................................................................................................3 Executive Summary.............................................................................................................4 Product & Service................................................................................................................5 Target Market......................................................................................................................7 Consumer Segment...............................................................................................................8 Production Site or Service Personnel.................................................................................11 Location................................................................................................................................12 Entry Mode..........................................................................................................................14 Staffing..................................................................................................................................15 Marketing.............................................................................................................................17 Payment Arrangements......................................................................................................18 Capital...................................................................................................................................20 Likely Challenges.................................................................................................................21 Data Resources.....................................................................................................................23

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EXECUTIVE SUMMARY Google is one of the biggest companies which runs its business not only in search engine or mailing service, but also in the social media (by launching Google+), e-mail provider (gmail), instant messaging (Gtalk), and so on. But the competition in the internet - based business nowadays is getting stronger, so that Google needs to create something brand new to retain its current position, and increase their profit. That is why, we decided to create something that some other companies already have, but we create it in a different and more sophisticated way. The Google Calendar important date reminder tracking system is actually rooted from the basic birthday notification. But moreover, its improved and itâ&#x20AC;&#x2122;s now become one special notification, that not only give us notification about someoneâ&#x20AC;&#x2122;s birthday or any special occasion, but the birthday person could get some special gift from Google through other companies which already have a relationship and contracts with Google. Also, there are options available to upload photos, for a more personalized gift, we could get from Googleâ&#x20AC;&#x2122;s database. And, it is actually not only available for birthday, but any other special occasion or holiday. This paper would describe more about this project in detail. Hopefully, this new service could be something that would make Google become stronger in the internet-based business.

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PRODUCT/SERVICE Google should invest in amping up its own calendar by adding a tracking system for important date reminders, featuring customizable e-cards and gift options, for customers to purchase at a low annual fee. This system will allow users to input special dates, that are easily forgotten but of importance, so that they are to be reminded that these specified dates are approaching or are present. This reminder tracking system built into Google Calendar allows for a busy individual to recognize someone of significance in their life by wishing a person “Happy Birthday” to “Congratulations”. Customers will have the capability to add reminders such as birthdays, anniversaries, baby showers, graduation dates, weddings, holidays, or any other type of celebration in which they choose. There are specifics of the reminder tracking system that are essential to making this system user friendly. the allows customers to set recurring dates however they wish or set it as a one time date reminder. Customers will also be able to choose how many times they wish to receive the reminder such as: a month in advance, a week in advance, or daily up until the date and even on the specified date, as well as, what time of the day they would like to receive the reminder. Once the date has passed Google will send out one last reminder, within a week, asking the user if they would like to make this specified occurrence a recurring one and ask the user to fill out a short survey to describe their experience for Google to better accommodate the needs of their users.The reminders allow customers to choose from 3 options in which they would like to recognize a significant individual. The three gift giving options in which the customer can choose from are: customizable ecards, or two gift options, including visa gift cards or website provided online shopping. The 5


customizable e-cards can be personalized by uploading personal photos or adding a special message. The card would then be delivered to the recipient on their special day. The visa gift cards, delivered with an e-card, could be redeemable online at any retailer website or the receiver could choose to have the visa gift card delivered to them in the mail to use at a local store. Google will offer two different types of shopping online. First, Google could use their own database to show the users of the specified reminder which corresponding online stores their friends/family visit often and what products he/she likes, in that way this service could act like a registry. This allows the Google user to purchase an item from these websites that are custom to the receiverâ&#x20AC;&#x2122;s taste, then in which, an item is purchased and delivered to an individual on a specific date. The websites in which the Google users are presented with give an additional discount for shopping through Google Calendar. Second, Google will allow a voucher for the gift recipient to shop as they please within the specified websites. If a user chooses to go this route for the gift option, Google will receive a percentage of the purchase price of an item sold, in which a code in the voucher will be used to purchase the item. If the purchased item retails for more than the gift voucher the voucher will be used towards the purchase price and then the website will proceed to request additional payment by the gift receiver.

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TARGET MARKET As most people nowadays are leading a busy lifestyle with a body of information to remember, Google calendar important date reminder is oriented to those who are living a internet-friendly, both socially-rich and active life, and most importantly are forgetful but willing to be precise. The target audience is an active internet surfer, who cannot or does not want to put much effort into remembering plenty of birth or anniversary dates each year, and does not have enough time to go shopping for gifts each time. One is between 16 and 60 years old, as such people are the common internet users, not afraid to surf and to buy products and services through the internet. Generally they are the money earning people as well, which is very important for successful implementation of offered gift options.

7


CONSUMER SEGMENT One of the most important things in business is to segment your customers properly. Only a wise segmentation could lead to successful diversification of your service or product which could warrant profit from your business. The right segmentation for Google calendar important date reminder users is even more important as the offered e-cards and gifts should be spot-on and relevant. The segmentation could be as follows:

Picture 1. Consumer segmentation.

Segmentation by gender is mostly important for primary selection of e-cards and gifts assortment. In the most primitive manner, more colourful, soft and emotional e-cards are relevant for women, while most men enjoy something simple, funny or even sarcastic. Similar aspects arise for the gifts. 8


Differences in age influence differences in gift expectations. Young people are tend to buy more funny, unreasonable, as well as useless, extreme or spontaneous gifts than older people, who prefer more reasonable, useful and generally more everyday gift options. They usually agree to spend a better amount of money for presents. Customers should be divided in such groups: 16-25 years, 26-35 years, 36-45 years and 46-60 years. The most complicated segmentation is the one by personal interests. Each customer’s personal interests are very hard to define and anticipate. Such segmentation should be done using integration with other services offered by Google, for example Google Search, Gmail, Maps and so on. All information about each customer should be analyzed by searching for keywords as “basketball”, “graffiti”, “violin”, “tulips” and so on which could define the picture of the customer. The same could be done with the people from the customer’s address list, especially with those, whose anniversary is coming. This could lead to very accurate e-card and gift offerings. The segments could be as follows: musician, athlete, painter, scientist, traveller, housewife, economist and many more. By income customers should be divided into under-average and upper-average groups according to data records of his present location, as income is one of the most crucial factors for choosing the purchase. In order to minimize both gift distribution costs and prices, customers should be segmented by their present location, namely countries and lands, which would narrow the featured options variety.

9


The geographical segmentation is closely linked to cultural segments. People are different in different countries. Ones are more open, emotional and active, while others are conservative, reasonable or self-contained, and these habits are reflected in their decisions for gifts as well. Dividing people by religion could help to learn more about customerâ&#x20AC;&#x2122;s common important date conventionality, traditions and ceremonies. Generally, the segmentation of customers should be operated through quizzes, polls, surveys and by combining all the knowledge about certain customer gained using other channels by Google. Only a detailed and precise portrait of each consumer would enable us to take into account specific tendencies and characteristics of the certain customer and thus effectively correspond to its needs for marking the important date.

10


PRODUCTION SITE OR SERVICE PERSONNEL LOCATION Services such as the Google birthday reminder are normally design in the US since US IT designers are oriented towards user friendliness, product simplicity and aesthetics. For this reason we believe the service should be design in the United States. The perfect location for the development of this service will be Google Headquarters or as better known the Googleplex. In the Googleplex engineers develop world-renowned next-generation technologies. The Google complex in California is the perfect place for the service to be developed and design; here is where all of the companyâ&#x20AC;&#x2122;s softwareâ&#x20AC;&#x2122;s and productivity tools are born and developed. Google is known for having a very relaxed work environment that allows developers and programmers ideas to flow. The Company gives their employees many benefits to keep them comfortable and motivated in their projects for example, Google has a strong philosophy of not telling developers on what to work hence developers are self encouraged to do their best and bring better ideas to the table. Service and product developers are always free to switch teams or projects whenever they feel there is an issue or believe they could be of higher value in a different group. Google also stimulates developers and engineers to spend 20% of their 8-5 job time to work on whatever project they want as long as is not their main project.

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LOCATION We believe the headquarters in California would be the perfect environment for the service to be developed and manufacture due to the large amount of experience and knowledge on the field. US Developers and engineers have a better understanding on how to make services such as the birthday reminder attractive and functional for a global market making the service easy and practical for all cultures and backgrounds. As we believe development and engineering should be manufactured in the US we recommend the service maintenance and customer service to be offshored to Googleâ&#x20AC;&#x2122;s offices in Bangalore, India. Bangalore is known as the Silicon Valley of India, being the country's largest IT exporter and the second fastest growing city in India, averaging 10% economic growth each year. Googleâ&#x20AC;&#x2122;s office in Bangalore is strong in the area of design interaction and user experience, in other words they study the users behavior and gather insight that would be use to improve the interaction of the end-user with the service or tool provided, in this case the birthday reminder. After the product is released a user experience group in Bangalore will have the task of monitoring the interaction of the users and the service hoping to obtain valuable information for the constant improvement of the product. User experience group will report findings and work together with Interaction designers and the product manager to innovate, improve functionality and user friendliness. Offshoring maintenance of the birthday reminder services to Bangalore will also lower the cost for the same high quality output. We believe this combination of domestic manufacturing and offshoring will result in success for the birthday reminder, allowing domestic 12


system designers, developers and engineers to create the service, while Googlers in Bangalore improve and maintain the service innovative edge and functionality on our continuously evolving high tech world.

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ENTRY MODE Since we offer a type of virtual product, which is intangible, therefore we should also use a virtual entry mode. In this case, to enter the market, we prefer internet to be our entry mode. We optimize the functions in the internet, every sites that Google cooperate with, and Google Search, to help us promote this new feature in google. Make it as attractive as possible, so that people would be excited and curious to try this new feature. By using internet for our entry mode, we should be able to convey people that our new product is the most innovative and creative one, and it would share benefits and a happy feeling when people are starting to use this feature. We are not only considering about the entry mode for our customer, but also our business partner. In this case, our business partners are the sites which is able to provide the gifts for people who celebrate something on that date. The sites could be online shop or sites which provide e-voucher for certain store/products/venue. For this, we should use the internet. Moreover, we should use the strategic alliances entry mode, which would make the companies that are involved in this project, possible to market their product using each otherâ&#x20AC;&#x2122;s sites. And also, there is a clear contracts for each otherâ&#x20AC;&#x2122;s commission in the project.

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STAFFING As it is already well known by everyone, Google Inc. has one of the most complete processes in getting the services of the most reliable personnel from all over the globe, they put all their effort on finding the most creative and revolutionary people available, they also try their best to keep them comfortable and very motivated at any time. There are many examples of how things are done in Google, and how this way of doing them helps the people working for it to be always motivated and fully concentrated into giving Google what they are expected to. As an example, they are told to spend 20% of their time in a project completely unrelated to their main project; this has brought the advantage of creating really innovative processes and products, which were not even planned. All this well known facts, plus the knowledge that most of the greatest new projects all over the net are created by their people, let us be confident that there will be no need to look for extra or different kind of staff to perform the tasks required for this project to be born. There might be though the need to describe the types and location of the members that will be required, which we will proceed to do next. The staff required for this kind of work must be divided into 2 main groups: the group whose task will be to develop the program, and those who will be in charge of the technical support and daily maintenance of it. The first group will also be divided into 2 subgroups: 1. This subgroup will be in charge of arranging the font code, processes and all the technical aspects that are required for this program to work. They will also be in

15


charge of the software actualizations and solving the issues the actual version is having. The people forming this group will be software engineers, 2. The second subgroup will be in charge of creating the different styles for the project; starting by making a single, well designed, catching style for the general program use, and going to the most customized, well differentiated styles for each different group and class. The ones forming this group, will mostly be graphic designers. There will also be 2 subgroups for the second group, and they are as follows: 1. This subgroup will be in charge of creating and continuously actualizing or replacing a marketing campaign, so the new program gets known by all the focus market, and each new feature as well as the current cool specs of it are in the minds of all the internet users. The people forming this group will be marketing experts 2. The last subgroup will be the one in charge of handling everyday-ordinary aspects of the program, such as common bugs, faqs, technical support, etc. this part will be held by non specialized professionals, who work in those countries with the lower wages.

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MARKETING Google will take many different revenues in marketing to gain awareness of their newly added segment. Google will offer free trial time spans to all Google users with a Google email account. It will strongly rely on the word of mouth from current Google users that have opted in to trying the new tracking system for the more important date reminders. Google will not spend uber amounts of money on advertising in expectations that the word of mouth, and venues such as Google+ and Facebook will do the majority of its advertising. Google will advertise through its own email accounts and calendar by using scrolling ads and pop up advertisement. A Google user will be sent an email or will be prompted that new additions have been made to Google Calendar and suggest that the user take a further look into what Google has to offer in making their life simpler. Google will also use scrolling ads within the specified websites in relation to their gift options. This will further awareness for customers of those websites that do not have Google accounts. Another viable option for advertising will be when the gift receiver receives their gift in any form they are given the opportunity to create a Google account and use the tracking system for a limited amount of time for free. Google will come across many challenges such as legal issues, within marketing, advertising, packaging, content information, language and cultural differences. But overall, it should be able to face the challenges itself by doing several marketing strategy which is fit with the product itself, so that Google could grab more customers and attract them more by creating this new Google Calendar innovation.

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PAYMENT ARRANGEMENTS System of payment should be typical, the same as in other Google products (for example Adwords). By typical we mean system that including the most popular payment options available on the internet – credit cards, PayPal, electronic transfer of money. On the other hand if we are offering different products for customers from different countries we should also alLow them to pay in the way they like. That way we should use platforms which are the most popular in specific regions, for example in Poland the fastest way to pay through the internet is to use online broker of money transfer (Przelewy24.pl). Optimizing options of payment is very important to make whole product really available for everyone who is interested. Very important is to divide payment options for two parts – from 0,10 Euro to 10 Euro and over 10 Euro. All the services up to 10 Euro will be available to pay via mobile phone (SMS). This will make our product very attractive especially for the youngest target group (16-25), also it is proved that decision of spending virtual money (credit cards, SMS) is easier than for example traditional transfer of money. There are few little differences between payment options which will be available in our product, described below: 1. Credit cards (Visa, MasterCard, American Express & other popular providers) – the biggest advantage of this option is that after you register your credit card in the product (which will take no more than 3 minutes) you can buy all the products or services in advance, paying later. Problem of this method of payment is that in some countries credit cards are available only for adult persons which. 18


2. Mobile phone, SMS (only for products services with price not higher than 10 Euro) – very simple way to pay for what you are interested in. All the products with the prices below 10 Euro have available option of “Buy via SMS” where you gonna find short instruction of what code you should type in the message and to what number you should send it. After short while you should receive another text message with the code that will give you possibility to “use” the product/service that you bought. The biggest disadvantage of this option of paying is that you cannot sum up few products or services and pay for all of them writing one SMS and also it is limited to 10 Euro (depend of country and payment policy). 3. Traditional transfer, online broker of money transfers – still the best option for traditionalists and older group of people, especially in countries where credit cards are not so popular. You are paying for what product/service you want and that is all, however it will take some time before Google will receive your money so you have to pay in advance. According to actual marketing strategy of Google, there will be promotional codes available. You will be able to use such coupons as money in Google services including birthday reminder.

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CAPITAL Google is one of the world’s most profitable and valuable multinational corporations. This year Google’s net income rose 60 percent to $2.89 billion compared to $1.8 billion for the same quarter last year. Among many of their business practices Google is also a venture capital investor. Google ventures focus on finding the most interesting entrepreneurs in all kinds of industries and invest in their startups or companies as well as providing all their experience and resources to help their concepts, ideas, or companies succeed. Today Google Ventures has 71 companies in their portfolio in industries such as energy, digital, gaming, life science and mobile. Google Ventures aims to invest 200 million every year in all sizes of projects, ranging from hundred thousand dollars startups to tens of millions in latestage investments. As shown, Google’s finances are healthy and their maximum debt to equity ratio is 0.08, hence extremely low. Given the company’s financial status we believe that no external funding will be needed to fund the development of the birthday reminder. Services and tools such as the birthday reminder are normally developed by Google’s own programmers, designers and developers. The only investment we believe Google might do is the hiring of new personnel to give maintenance to the service and probably new processors to run all the applications transactions. Overall we strongly recommend Google to invest its own capital into the development of the birthday reminder. Google invest on average 200 million on outside business ventures it would be irrelevant to go on explaining why we believe Google would invest its own capital for development of its own tools and services.

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LIKELY CHALLENGES The biggest challenge that should be met is integration with other Google tools. It is obvious that the tool which should be connected is Gmail. That sounds like lot of work and plenty of time will be needed. From the company point of view and according to their strategy of introducing new tools/services this reminder should be putted in the most delicate way. Also already discussed problem of differentiation cards and gifts in term of culture differences could be more problematic than we expect. What is more â&#x20AC;&#x201C; it can be the most important factor of success. Good, funny card connected with the culture or specific situation/person from the history can be a great advertisement of our service when became popular and will be shared. On the other hand one wrong choice or mistake can kill the whole idea in specific region or culture. Another problem is that there are plenty of users of other applications with similar options, however none of them offer their users so many options as birthday reminder created for Google. There are two main competitors for service that we propose, first Facebook is a well known social network with many applications and features including birthday reminder. The biggest advantage of this platform is that, you do not have to type dates on your own, application collecting the dates from the profiles of your friends, but there is no such a big range of customizability and what is more important there is no simple way of buying gifts via Facebook. However, still strong point of the Facebook is that many people that you know already have a profile on this service. Second, Microsoft Outlook is also worldwide used program with great 21


calendar option which is highly customizable and user-friendly but it has great weakness of no option of buying gifts. But still you can prepare birthday card on your own. Summing up when we are thinking about competitors there might be problems to convince first users, but we every new customer next step will be easier and as we wrote there is no competitor which can offer the same.

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Data Resources :

http://ycharts.com/companies/GOOG/debt_equity_ratio http://www.googleventures.com/who-we-are http://finance.yahoo.com/q/bs?s=goog+Balance+Sheet&annual http://www.google.co.in/intl/en/jobs/indialocations/bangalore/ux/interaction-designerbangalore/index.html http://storagemojo.com/2006/09/28/google-software-development/ http://www.google.com/intl/en/jobs/uslocations/mountain-view/swe/index.html

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A proposal for Establishing Marvel Amusement Park

X-culture Group 240


Table of content Introduction......................................................................................................................page 3

A Marvel Characters Theme Park Description............................................................page 4

Location of Marvel Characters Amusement Park........................................................page 7

Consumer Segment..........................................................................................................page 8 Entry Modeâ&#x20AC;&#x2122;s Selection....................................................................................................page 9

Employment in Marvel Theme Park............................................................................page 10

Marketing Strategy of Marvel Theme Park................................................................page 15

Payment Arrangements.................................................................................................page 17 Possible challenges of investing in Marvel Theme Park.............................................page 19 Summary.........................................................................................................................page 20

2


Introduction The aim of this proposal is to suggest investing in establishing a Theme Park consisting of attractions from Marvel movies characters in Central Europe. It consists of several analysis. While preparing a proposal a target market, entry mode as well potential consumer segment were in detail taken into account. A proposal includes scrutiny of staffing needs, payment arrangements and prepared marketing strategy. Capital needed to start this type of investment was also assessed. This proposal enumerates potential dangers which could prevent Marvel Characters Theme Park from achieving a success on the market. A conclusion of this proposal provides a recommendation whether investing in a Marvel Characters Theme Park could result in making Profits.

3


A Marvel Characters Theme Park Description The reason for establishing a Marvel Characters Theme is to deliver a new source of amusement for people, who enjoy spending their free time with a doze of adrenaline. Theme Park isn’t destined only for kids. It will bring great fun and unforgettable memories for every family member. A wide range of attractions will not only bring domestic visitors enter the park but it could become one of the recognizable attraction for tourists from every European country. It will be a must-see attracion for every fan of Spiderman, X-Men or The Avengers comic books. Establishing a Theme Park will result in renewal of popularity of films and cartoons that include Marvel characters. It will provide a chance to see the most popular film adaptation of Marvel comic books, and enjoy numerous attractions designed in comic book’s style. In order to fulfill the needs of quests Marvel Characters Theme Park will consists of roller coasters, water attractions, adventure lands as well special zone for the youngest visitors. A theme Park will be divided into three sections consisting of attraction which could provide: 

Adrenaline

Adventure

Fantasy

Adrenaline section is destined to ensure that every quest entering this place will feel awestruck. Vertiginous roller coasters with side tailspins and a fantastic double loop. Every visitor will have a chance to jump on board and enjoy an experience that literally turns their heads. Only the most courageous visitors will afford entering this section. Every attraction which will be designed in the shape of characters from The Amazing Spiderman’ Adventures.

4


The Adrenaline section will consist of 5 roller coasters: 

Challenge the wrath of Venom

Green Goblin Vertigo

Kraven the Hunter Tour

Scorpion Spin

Dr Octopus Tornado

Adventure section will provide fun for visitors who prefer stationary attractions. Charles Xavier’s academy will be waiting for visitors interested in entering a house of wax characters. Every quest will have a chance to take a photo with favourite life-sized character from X-Men series. A railway around a corners New York’s toy down at night could bring a thrill over visitors neck. They will have a chance to see the gloomiest characters planning their thefts and assaults. Fantasy area will provide a blend of attraction for the youngest visitors as well as for those who would like to have a rest after a full of day of effectiveness. A cinema to watch a favourite comic book’s adaptation or several nice places to have a snack-it could be found in Fantasy Zone. Establishing a 4-Dimencion cinema with short film shows in state-of-the art technology is necessary to include in Marvel Amusement Park range of attractions. Other rooms will provide 3-Dimension film marathons for the most loyal Marvel character’s fans. In order to establish a Marvel Characters Theme Park it is needed to secure an appropriate area. A construction of Theme Park with approximately 120 attractions for diversified group of quests requires about 100 acres of acreage. Although establishing such an impressive Theme Park requires substantial cost of construction, marketing and promotion costs as well as huge staffing needs the return from investment should bring significant profits for whole region. It has a huge chance to become widely known tourist attraction and the most profitable European Theme Park.

5


Table 1 SWOT analysis of Marvel Theme Park Strengths 

Weaknessess

A unique style of amusement park

-comic heroes  

period

of

return

from

investment

Attractions taliored to the needs of

Huge staffing needs

every age group of visitors

Difficulties with gathering funds for investment

A wide range of comic fans-huge 

potential customer segment 

Long

Long

period

needed to

Advantageous location in Central

construction

Europe, good availability for tourists

accomplishment 

Huge

plans

and

transportation

prepare order’s

costs

of

attraction’s elements

Opportunities 

Threats

A chance to become well-known

tourist attraction 

Potential danger of raising new competition on the market

An increasing income in middle-class

of Central European citizens

Red tape and difficult access to construction permissions in Poland

Higher expenditure for recreation

More mobile society

appropriate

Every Marvel film production could

infrastructure in Poland

road

and

become a great promotion for theme

Increasing energy costs

park

Changing

Considerably

lower

 costs

of

fashion

for

railway

ways

of

spending free time

Modern hotel base in Poland prepared for foreign visitors

Potential delays with preparing an

Possible adverse changes of interest rate

employment in Poland 

Availability of ground for investment in Poland

Tax exempt for huge, new investment

6


ď&#x201A;ˇ

Lower costs of public transport and civil aviation

Location of Marvel Characters Amusement Park It is worth concerning locating Marvel Amusement Park in Poland. Choosing this particular location creates numerous opportunities for further development. Advantageous location in Central Europe goes in tandem with great consumer base. In order to circumstantiate reasons why Marvel Theme Park should be located in Poland a brief PEST analysis has been prepared. Political -

Poland is a member of European Union, which facilitates cross-border travelling inside European Union

-

Poland enjoys political stability and government which favours business activity

-

Polish lawmaking include several types of providing free grounds for foreign investments such as life interest and leasing

Economic -

Poland proved to be crisis-prone country with a 3,8% Gross Domestic Product increase in 2011

-

Poland consists of 14 Special Economic Zones which let new enable foreign investments a preferable terms of business activity

-

Effortless access to credit and loan - Ease of Doing Business Index 2011 situates Poland at 8th place in the world in terms of credit availability.

Social -

Poland provides cheaper considerably cheaper labour force in comparison with its Western counterparts.

-

Polish society consists of well-educated as well as highly qualified workforce. 16,8% of Polish citizens is higher educated

-

Influence of globalization and converging ways of spending free time

Technological -

Rapid development of road and railway infrastructure due to Euro 2012 tournament

-

A modern hotel base dedicated to fulfill even the most sophisticated taste of visitors

7


It is recommended to establish Marvel Theme Park in Poland. Localization in Central part of Europe, market niche as well as almost unlimited access to qualified workforce are the most important advantages of locating Amusement Park in Poland. Effortless access to external sources of financing the investment also favours Poland as possible advantageous place of investment.

Consumer Segment Consumer segmentation helps to understand consumer orientation and differentiation. Preparing an appropriate market segmentation can reveal that different kinds of clients express particular needs. As a result they may require various of products or services. We would like to introduce an amusement park which will be attractive for all kind of people, children and adults, boys and girls, individuals and groups. Few variables of consumer segmentation can be distinguished. Geographic: Considering geographic factor: land or region – a whole country of Poland should be taken into consideration. Potential sources of Marvel Theme Park’s profit is also include intense tourist movement. Almost every European tourist is a potential quest of Marvel Amusement Park. Demographic: There is no minimum age to enter the park. However several restrictions will prevent younger groups of guests from entering watching some movies in the park cinema or enjoying some roller-coasters. Security regulations may require minimum age and height of visitors. It is also necessary to include age restrictions for example for cinema goers. Marvel Theme Park is destined both for men and women. Quests from every occupation as well as from every religion and ethic group are potential visitors of Marvel Theme Park. It isn’t necessary to analize level of education of Theme Park’s visitors, as the behavioral factors and interest in Psychographic:

8


In Marvel theme Park unforgettable memories could be found both by singles as well as married couples. It is destined for people who want to have great fun, like adventures and adrenaline. Some of them are fans of Marvels comics or film adaptations. It is expected that opening hours would be tailored to the needs of visitors. Theme Park will is about to be open 7 day per week as well as 8 hours per day. Marvel Amusement Park will include large amount of products and services destined to the needs of every kind of clients, at any age and for both girls and boys. Walt Disney is undoubtedly very well-known brand, recognizable all over the world, having huge amount of fans and supporters. Working for such a company is just a pleasure and it is expected to be very successful and profitable idea of opening a new theme park. Disneyland parks are known for most of people in the world and are the dreams of children(and not only) from all continents, all ethnic groups etc. Unfortunately there is no such a park in central of Europe that is expected to fill the market niche. Coming from such a great brand as Walt Disney it would be very attractive, interesting and could bring plenty of clients.

Entry Modeâ&#x20AC;&#x2122;s Selection Analysis of macro-factors, it was decided to recommend choosing Foreign Direct Investment(FDI) using Green Field entry. Foreign direct investment is the direct ownership of facilities in the target country. It involves capital both technology and personnel. It can be made through the acquisition of an existing entity or the establishment of a new enterprise. Direct ownership provides a high degree of control in the operations and the ability to better know the consumers and competitive environment, and the market in general. However, it requires a high level of resources and a high degree of commitment Green field can be defined as a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country. Polish market represent a has high potential for growth. The eurozone of which Poland is a member enjoys political stability. There is no threat of terrorism. Foreign direct investment could avoid risk of overpayment that is inherent in acquisition. It also avoids serious problems of company integration which may occur when we acquire an existing company. It is important to retain full control of the new company that would be establish for proper monitoring. Establishing Marvel Amusement Park by foreign direct investment also involves several disadvantages. It requires complex knowledge about international cultural

9


differences as well as business ethics. In order to establish a successful investment it is needed to have experience in managing cross-cultural teams and project groups. It involves High risk as the capital needed to start investment is significantly high. A period of incubating is also quite long in this type of investment. Receiving necessary permissions, buildings’ construction, staff recruitment, preparing marketing campaign it requires huge amount of time and staff engagement. To conclude, foreign direct investment is recommended as possibly the best entry mode to establish Marvel Theme Park. It is a huge chance for a wide publicity thanks to offering new workplaces. Direct investment also allows investing company to every conform every element of building site and construction plans to the needs of a project. It doesn’t require complicated refurbishing and rebuilding of taken over company. It allows designing whole organizational structure and prepare dedicated supply chain tailored to the needs of Marvel Theme Park.

Foreign direct investment in long turn could guarantee sustainable

increase of profits and satisfying rate of return from investment.

Employment in Marvel Theme Park For the attractions of the Marvel Characters Park Theme the company should hire new personnel, use locals. Opening the Park can expand the economy in the area. The company at the beginning should hire approximately 500 employees. The Park will offer career opportunities for: -

students – internships

-

recent grads – for them does not necessary the experience

-

graduates – for top positions

The required career areas are the following: -

Broadcast/ Media

-

Corporate

-

Creative

-

Entertainment

-

Operations/ Travel

10


-

Sales

-

Marketing

-

Technology/ Digital

Broadcast and Operations teams help bring family entertainment into people's homes. Employees within this group provide technical facilities, trained personnel, engineering services and IT support to Marvel Characters Park Theme, ABC Television Group (ABC, ABC Family, Disney Channels Worldwide) and ESPN Worldwide. Opportunities include professional and managerial roles in Engineering and Technology Planning, Program Operations, Telecommunications and Network Origination Services and Media Technology and Applications. Depending on the role, responsibilities may include the operating, building and maintaining of: -

Network control rooms

-

Production control rooms

-

Editing rooms

-

Post production facilities

-

Cameras

-

Electronic news gathering operations

-

Videotape machines

-

Graphics devices

-

Servers

-

PC desktops

Employees in Broadcast and Technical Operations can play a special part in helping us reach millions of people every day. In our Corporate staffs are includes positions, such: -

Administrative

-

Banking

11


-

Business development

-

Public Relations

-

Consumer Package Goods

-

Engineering

-

Accounting

-

Legal

-

Publishing

In Creative positions are animation positions, so our employees help create new worlds, characters and storiesâ&#x20AC;&#x201D;and share them with people all over the world. They combine heartwarming storytelling, unforgettable characters, cutting-edge artistry and innovation to bring the world of Marvel to life through animated films, television and games. Employees collaborate with diverse talent from all over the globe and include: -

Animators

-

Artists

-

Developers

-

Designers

-

Engineers

-

Technical Directors

-

Production Management

Entertainment group is a team dedicated to employing the best performers who will entertain millions of guests around the world every year. As part of one of the largest live entertainment companies in the world, Marvel has countless ways our employees share their talent with Marvel Guests. They can be anything from professional musical theater actors looking for their next adventure, to aspiring performers looking for a place to hone their talent and learn the business. Opportunities may include: -

Singers

12


-

Actors

-

Dancers

-

Musicians

-

Marvel Character Performers and Lookalikes

-

Bands

-

Variety and Specialty Acts

In our Operation/ Travel group are included, such: -

Facilities

-

Culinary

-

Medical

-

Park Operations

-

Retail

-

Studio Operations

As part of Marketing teams we'll use the superior communications skills to ensure that our stories are told in the best ways possible. You can enhance, protect and defend our reputation, and play a critical role in coordinating a unified voice for all communications. And you'll also help sustain our positive image in a fast-changing and complicated media landscape. The responsibilities may include: -

Brand Strategy

-

Development of Integrated Franchise Plans

-

Consumer Insights

-

Multicultural Market Development

-

Product Marketing

-

Advertising

-

Promotions

13


Discover a role in Digital Media, where our employees can work on the latest content and technologies to entertain and inform audiences around the globe. We push the boundaries of how we deliver innovative entertainment experiences. Areas where you may exercise your digital expertise include online, gaming, media, digital content, mobile/wireless, advertising, social media and technology. Exciting work might involve site optimization, web analytics, online e-commerce trends, viral social media campaigns, virtual world development and product marketing. Opportunities in professional and managerial positions include: -

Digital Marketing Jobs - Online, Interactive, Integrated, Product & Mobile Marketing

-

Business Development

-

Product Management

-

Product Development

-

SEO/SEM Jobs

-

Web Analytics

-

Web Development

-

Content Marketing

-

Social Media and Social Networking

-

E-commerce

-

Digital Editorial/Blogging

Choosing the best employees the Marvel Characters Park Theme maintains a strong domestic and abroad employees. Qualification of the staff will play the most important role in recruitment process. A well-motivated and goal-orientated staff is a key to companyâ&#x20AC;&#x2122;s success. Numerous promotion opportunities as well as encouraging work environment will result in great prospects of further development.

14


Marketing Strategy of Marvel Theme Park For establishing the Marvel Characters Theme Park the investors should face with some marketing challenges. In the area the Park has many advantages, but disadvantages also. In order to present these it is important to show the marketing mix, which is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's, the marketing mix elements are: -

product

-

price

-

place

-

promotion

They are the variables that marketing managers can control in order to best satisfy customers in the target market. So in the following there are some solutions, marketing strategies present, which could help in operation of the Park. Product The Marvel Characters Theme Park products are destined only for kids. Every section in the Park is based on cartoons, especially the most popular: -

Spiderman

-

X-Men

-

The Avengers comic books

In the field of the Parkâ&#x20AC;&#x2122;s product/ service there are no marketing challenges, because all the characters from several analysis shows, that they are really popular in the youngest segment. So in this field we cannot speak about cultural differences, because the characters are popular in all over the world. Price The price of the Marvel Characters Theme Park is destined for organized groups of visitors and establishing a relationship with quests. The price is averaging, and affordable for an average income family. The strategy is based on the idea, that parents are coming with their 15


children to spend their time and having fun in the Park. Organized groups could obtain discounts, and prizes for engagement in loyalty programmes. A special offer will be prepared for travel agencies in order to catch attention tourists from every European Country. Entering Marvel Theme Park should be included in a schedule in every visit in Poland. Place The Park is located in Central Europe, our suggestion is Poland. Together with choosing this location the language differences could be avoided. The second mostly used language is English. The place can easily approach; the infrastructure is good, there are a plenty of European high ways and airports close to the Marvel Characters Theme Park. Promotion Promotion is one of the four elements of marketing mix, the communication link between sellers and buyers for the purpose of influencing and informing. Decisions are those related to communicating and selling to potential consumers. Since these costs can be large in promotion to the product price, a break-even analysis should be performed when making promotion decisions. The following are two possible types of promotion for the Marvel Characters Theme Park: above and below the line promotion. Above the line promotion, means promotion in the media: -

TV (especially cartoon channels)

-

Local radio

-

Newspapers, magazines

-

Internet, Marvelâ&#x20AC;&#x2122;s Page, Own Page, Facebook

Below the line promotion, means all other promotion: -

sponsorship

-

product placement

-

sales promotion

-

direct mail

16


-

personal selling

-

public relations

Marvel's ownership of media networks such as "ABC," "Disney Channel," and "ESPN" is a strategy the company is using to market its brand to Americans. This includes a systematic approach to television advertising, as well as radio commercials, print, outdoor advertising, and mobile initiatives, promoting discounts on resorts, and family packages. To reach teenagers, Marvel Characters Park Theme launched "advergaming," which puts ad messages in online and video games. The goal is to reach kids directly and encourage them to urge their parents to visit a Marvel Park for a family experience. This includes all of the tools available to the marketer for marketing communication and it has own promotions mix. Think of it like a cake mix, the basic ingredients are always the same. However if you vary the amounts of one of the ingredients, the final outcome is different. It is the same with promotions. You can integrate different aspects of the promotions mix to deliver a unique campaign. A promotional mix specifies how much attention to pay to each of the subcategories, and how much money to budget for each. There are different ways to promote a product in different areas of media. As part of its marketing strategy, Marvel believes in innovation to stay ahead of the competition and build business. With rapid advances in technology, the traditional passive television audience is in transition, no longer captive to prime-time scheduling on major networks. According to "eMarketer," by 2012, 70 percent of Internet users in Europe will be downloading video content. Marvel's strategy is to connect with kids directly via storytelling utilizing multiple technologies.

Payment Arrangements In order to make offer possibly the widest array of service and attraction Marvel Amusement Park should not only specialize in Theme Parkâ&#x20AC;&#x2122;s attractions such as roller coasters. It is important to include cinemas, restaurants as well as souveneir shops, comic shops and fast â&#x20AC;&#x201C; foods.

17


Conducting every restaurant and souveneir shops will depend on franchise. Several advantages of allowing franchisees doing business inside Marvel Theme Park were taken into account. 1. Brand awareness – Marvel enjoys widespread popularity. Almost every potential visitor have seen comic book containing one of Marvel’s characters or saw recently produced TV adaptation. It is guaranteed source of income to allow customers buy their favourite comic books during their visit in Marvel Theme Park or preparing film marathons in cinema. Definitely unique design proposition is also one of the most valuable asset and incentive for franchisees. 2. Feedback from Franchisor – Advantageous location of Theme Park and feedback provided while opening restaurant and store. String of training connected with customer service, preparing dishes, managing whole restaurant or comic shop will be quaranteed by Walt Disney. 3. Better terms of cooperation with suppliers. Franchisees will have significantly higher negotiating position when signing contracts and negotiating prices of goods. Terms of Payment, discounts, and greater amount of regularly ordered goods will be their competetive advantage when negotiating with suppliers. 4. Benefits from marketing campaigns conducted by Marvel Theme Park. Franchisees as the owner of company operating inside Amusement park couldn’t afford buying widespread marketing campaign. It won’t have any serious economic effects as well. Entering Marvel Theme Park is a possible chance of making great profits from the effects of marketing campaigns. Every franchisee will be obliged to allot a part of earned profits for marketing purposes in order to save Walt Disney’s funds. Furthermore, it is advisable to introduce several options of payment for visit in Theme Park in order to facilitate visits for visitors from different target groups. Cash, credit cards are absolutely obvious. In addition, an integrated system of tickets reservation and payment by internet remit should be introduced. In order to bring potential

18


customers to enter and visit Marvel Theme Park a special system of discounts for children, whole families, organised groups should also be introduced. It is important to motivate our customers and build an appropriate relationship with them. A special loyalty programme with travel agencies should be taken into consideration in order to give them an incentive to include visits in Marvel Theme Park into tripsâ&#x20AC;&#x2122; schedule. Points collected on a special cards will allow employees of travel agencies to visit Marvel Theme Park for free with whole family or transform earned points into souveneirs from comic shops. In order to secure possibly the best cash liquidity when negotiating terms of cooperation with suppliers and selling tickets for travel agencies it is advisable to offer short terms of payment. Cash is necessary to regulate huge liabilities and costs for energy and staff employment. At the beginning of business activity Marvel Theme Park will be heavily indebted. Repayment of credits and bank loans is a key strategic goal and making profits in long term heavily depends on regulating those liabilities.

Possible challenges of investing in Marvel Theme Park Although investing in Marvel Theme Park represents a vast opportunity for Walt Disneyâ&#x20AC;&#x2122;s further development, there are several challenges which could prevent investment from reaching breakeven point and start generating profits. 1. Finding an appropriate site for investment. It has to be preluded by a detailed analysis of tourist movement, ground availability, potential access to Special Economic Zones, receiving life interest. Quality of road infrastructure as well as access to railway station and airport should be also taken into account. 2. Receiving Construction Permission and difficult engaging government in helping developing the investment idea. Due to vast bureaucracy it could be a possible challenge to collect all necessary approvals and start fostering the investment. 3. Detailed Recruitment Process â&#x20AC;&#x201C; recruiting such a great number of staff needed to operate and managing Marvel Theme Park could become a serious challenge for investment. Lack of experience in business activity on Polish market could result in teething problems when completing and designing organizational structure of this enterprise. Walt Disney has to answer for several difficult questions concerning this problem: How to manage recruitment process? Is it worth outsourcing hiring process?

19


Should Top Management be delegated or should it be recruited from domestic business specialists? 4. Possible changes of interest rates and currencies. Long period of incubating Marvel Amusement Park as well as financing the whole investment through foreign direct investment could be undermined by increasing interest rates and adverse changes of currencies. 5. Disadvantageous changes in Polish law. Increasing norm of safety, cancelling tax exemptions or introducing a new scheme of taxes from enterprises could heavily disturb development of Marvel Theme Park. Changes in employment law concerning employment contracts or introducing minimum wage could also result in potential profitâ&#x20AC;&#x2122;s decrease.

Summary The purpose of this proposal was to suggest investing in a unique type of Theme Park. Including Marvel characters into Walt Disneyâ&#x20AC;&#x2122;s offer could result in reaching new audience and making a step toward rebranding of Walt Disney. Modern offer dedicated to customers who prefer spending their time actively could fill the market niche and gain significant profits for Walt Disney. Amusement Park has a huge chance of becoming widely recognizable tourist attraction in Central Europe. Although locating Amusement Park in Poland could become challenging for Walt Disney, it brings numerous opportunities for further growth. A brief analysis of locating Theme Park in Poland, marketing approach as well as assessing staffing needs brings a recommendation that Marvel Theme Park should be located in Poland. It could be offered to a wide range of customers and become a chance of earning additional funds through franchising scheme. It is recommended to seriously consider foreign direct investment as an entry mode. Although it includes considerable risk, foreign direct investment could gain government support and good publicity from Polish citizens. It provides a chance for designing a Theme Park from a scratch and doesnâ&#x20AC;&#x2122;t constrain Walt Disney company to complicated changes of organizational structure. There is also no need for complicated modernization of taken over company.

20


#242

X-CULTURE PROJECT (HEALTHY FOOD AT MCDONALDS)

Rasim Uรงar Esther San Jose Bastante Aries Firmansyah Obbe Piotrek Gajewski Julie Kao Amoakoaah Grace


INTRODUCTION

The first McDonald's was opened by the McDonald's brothers in 1948, becoming the first location in the history of fast food in San Bernardino, California (USA).They offered fast food, food that is prepared and served previously at high speed. No doubt the basis of their success was to replace the conventional dishes using the other restaurants in the paper bags. They soon reached a high level of sales and although the menu was limited success was growing.

It was then that provider shake mixing machine, Ray Kroc, surprised by the amount of "Multi-mixers" requested, proposed the opening of new restaurants. So in 1955 opened the first store of the Corporation by Ray Kroc. During the 50 and 60, the management team of Ray Kroc established the successful philosophy of the company: Quality, Service, Cleanliness and Value.

Currently, this franchise has more than 25,000 locations in 117 countries and five continents are where the Golden Arches rise, a figure that was increased with the recent opening of 3,000 stores over 1999. Although McDonald's offers its customers a standard menu in all its premises, it is common that these menus are combined with special products that are developed in each culture depending on the tastes of customers.


We focus our study on how McDonalds can also provide safe and healthy food, like McDonalds try to change this conception we have of it, from fast food companies and junk food to healthy food company.

COMPANY PHILOSOPHY The company brought in this new market of fast food quick service concept original, where the details are taken care of to the fullest, to give consumers an excellent product. The operating philosophy of the McDonald's system is based on Quality, Service, Cleanliness and Value for 44 years. The company offers a standard menu, but in every culture develops special products to suit the tastes of the community. McDonald's is successful because it has a system of corporate standards and individual opportunities to all franchisees are integrated into the same philosophy of values and expectations clear.

WORKERS McDonald's employees are the most important. It is thanks to them so that customers have an incredible experience at each visit and want to return. The principles of Quality, Service and Cleanliness begins with its own employees, McDonald's guide all actions in accordance with organizational values as team work, a passion for the job always offering the best of themselves, be involved with peers and with the mission of the company, be whole in each of the actions, be leaders.


PRODUKT/SERVİCES Mcdonalds is the world’s largest restaurant chain and is one of the restaurant with the highest giro.Previously the parents took away their children Mcdonalds to eat hamburger and to make them happy.

But hamburger wasn’t healthy and the parents weren’t knowledgeable about obesity.İt’s a big danger for children and the parents ignored for their happiness or they weren’t aware of this danger.There is trans fats in hamburger so it’s the most harmful fat against to heart health and causes excessive weight gain.


İn order to save the children from these danger we decided that mcdonalds can invest healthy food for healthy life!!!

Nowadays the people take care of their health.They make Sport and stay away from unhealthy food.Even so there is unhealthy food at McDonalds and they don’t prefer McDonalds.When they sell healthy food,they can attract these customers.For example: less fat or fatless,abundant protein vs. We should remember that the sport isn’t enough for stay fit,the nutrition is more important than sport!!!

TARGET MARKET


I believe that McDonalds will earn more with this investment.I think the first comes from shopping centers as target market.In addition,shopping centers will provide a great achievement where nested with in sport center.Sportmen can consume to make it easy these healthy fast food around here. Also the sales rate will be higher in districts where the famous and rich live.Because even if the rich ,the famous people always on camera.So they must appear to fit. Our biggest target is to establish markets here.Because there isnâ&#x20AC;&#x2122;t problem of price in here. Later we will establish in other district and we will offer affordable menus. So we want to attract more customers all walks and we want to work for their health.

CUSTOMERS AND THE BEHAVIOR OF PURCHASE Without customers any of the marketing elements would make sense. McDonald's knows his customers and designs its products based on the characteristics and desires of the same. McDonald's has thoroughly studied his target market, has products aimed at children aged 7 to 14, adult products, knowing that each client is different, while boys looking for fun and gifts, adults forage nutritive quality , varied, and so on. And so, McDonald's made its menu based on these characteristics and needs.

McDonald's turns to a wide population, the public of 80% McDonald's and McDonald's families are directed to a population between 7 and 65. According to the statistical trend much of this population tend to make life outside the home, which become potential consumers. McDonald's is aimed at various audiences, families and people whose lifestyle does not have enough time to eat at other restaurants, so, due to the continuous bustle in their lives tend to go to McDonald's.

Education and culture of McDonald's customers led them to always try to take care of your body, looking for the best way to feed, being aware of the need for a healthy and nutritious food, and therefore prefer to eat at McDonald's, local to them ensures the quality, rather than other local fast food.


The customer is always affected by a number of external factors that influence your purchase, such as the world economic, political, legal and social. Undoubtedly one of the factors that influence buying behavior is the social environment: culture, social groups, and situational factors.

Culture is a body of knowledge, beliefs, customs, values and other forms of behavior learned and shared by members of a given society. Culture is changing and evolving to meet the needs of society, this culture determines significantly the form of consumer behavior and is something that must be taken into account by the company. An example of this changing culture is the importance in recent years is given to health and physical condition of the person, this has led to McDonald's to have to offer substitutes of hamburgers, such as salads. Another new ecological culture is the culture that has led the company to continually change their ways to package and its manufacturing and distribution, to be consistent with that culture. Within the culture in general, we find different subcultures, certainly the most affecting the company are, nationality, region, race, age, sex, occupation and social class.

Social class is defined as the result of a division of society into relatively homogeneous groups and stable place in which individuals or families who have values, attitudes and behaviors like. Usually McDonald's is directed to various social classes, goes to middle and upper class, but may also include the lower class but at its highest level.

Then we have families, which is the primary reference group that most influences the consumption behavior of an individual. The influence of family appropriate, especially for the education of its members and the role that each one takes within the group. In this case, the initiator (person issuing the idea of going to McDonald's), the informant (person who gives information about the restaurant) and the influencer, are often the same person, in this case, the younger members of the family . The decision-maker, who makes the purchase decision is usually the head of household, regardless parent, and in most cases the buyer and the consumer are often the same, the whole family.


Consumer behavior is also influenced by the actions that McDonald's place in their markets through its marketing-mix I program.

But certainly what most influences the behavior of consumers are their personal characteristics and psychological structure. The personal characteristics of the individual are determined by demographic and psychographic profile. The demographic profile of the customers of McDonald's is next, usually people aged between 7 and 65, men and women with different marital status, working or studying, but most often students, located in the cities , with an average income level or higher and with a level of training media. The psychographic profile is defined primarily by their personality and lifestyle. But these variables are very difficult to measure. The lifestyle is defined based on three elements: the activities, interests and opinions. The psychological structure is determined by four factors: motivation, perception, learning and attitudes. Motivation is the driving force to action. The motivation of consumers is to answer the primary need feeding and physiological and psychological need or secondary waste no time, and eat as soon as possible, but this need is more related to American culture with the Mediterranean. An attitude is a learned predisposition to respond in a consistently favorable or unfavorable to a given object. Attitudes are not innate, learned. So the attitude is acquired through direct experience with the products, sales force or the media. McDonald's case, is always the attitude of customers towards their products to be positive always acting on their sales force and their communication, especially because he knows that consumer behavior is directly related to the attitude of the consumer towards the product.

What has brought McDonalds is apart from its traditional mission (fast food and hot) to propose a change in culture by adding cold food and healthy now, such as salads, apple-shaped "potato" and so on.

To do this, McDonalds has also raised a number of values: o Highest quality and product safety, verifying all phases of production.


o The client has a 100% satisfaction. o Providing healthy, nutritious food in a friendly atmosphere, we can see that McDonalds change the design of its restaurants, now with a green and quiet tone that makes it look like you're in a health food restaurant and natural.

STRATEGIC BUSINESS UNITS MCDONALDS o Product Line 1: For younger audiences, such as smaller burgers, new cut apples as if they were potato chips, juice, etc. This strategic business unit is one that involves more work, since we intend to create new products for young children, parents are increasingly concerned over the health of their children due to high levels of childhood obesity, so that they can visit and eat at McDonalds, they need good reasons, and what better to make healthy products for children. It is a difficult area because children often reject fruit and fried potatoes so prefer a burger, so the new layout design of the block. We may also create products such as frozen fruit,fruit salad, fish burgers, etc.

Product Line Two: For the remaining groups, now also very concerned about his physical condition. For this you need to see that McDonalds has changed, that now also offers healthy food such as salads, burgers, chicken, fish, new "fads" chicken with bread made with less fat content.


. Finally we can say that McDonaldâ&#x20AC;&#x2122;s uses a segmentation strategy followed by McDonald's is the differential market, for each segment that performs a type of marketing. Also seek low prices for higher returns, as the great success of the burgers and more products than EUR 1.

PRODUCTION SITE or SERVICE PERSONNEL LOCATION Production site is where the product should be manufactured or the service personnel should be located and operate. Mcdonald Healthy food will be more devoted to the activity which is always tirelessly and always eating unhealty food . We know that fast food is unhealthy, and therefore the products on offer in the form Mcdonald fast food healthier and more fit to be enjoyed. So we choose the location for the planning of this project is in all countries with population density and has a 24-hour non-stop activities such as America, Australia, several countries in Europe and at least in some countries in Asia like Japan, china etc As mentioned above there, McDonald had a chance to compete with rivals in the field of food. why? because if the project has made its way in some countries, the customer will replace fast food with McDonald healthy food.

STAFFING Staffing is the important process in a company, because good staff can help you run your business smoothly, efficiently and help you success. We have


to provide the special products and best service. So about staffing, managers have to know how many people you need to hire and in what functional part, such as producers, operators, accouters, marketing, customer services and so on) And train your all employees. Separate in three: people who made the products, clerks and waiters. In kitchen, you have to hire the people who have a lot of skills to make the special food/ products; train your employees to provide the great service, such as being patients and attentive to customers. No matter locals or the third-country national labors, if they are willing to learn new skills, can speak at least two languages, full of enthusiastic to do this job, we can use them. If we use the new employees, we might have the probation period for two weeks, it can not only help us to observe whether he or she is suit to this job, but also employees can check whether they can adapt this new environment. As our business plan- healthy food in MacDonaldâ&#x20AC;&#x2122;s, we can use the current employees because they are familiar with the role; we only have to teach them some new skills. For instance, teach them how to select the fresh food; when customers are buying the fast food, then the clerk can tell them we have the new products and tell them it can help the before they eat the fast food.

MARKETING Segmentation strategy followed by McDonald's is the differential market, for each segment that performs a type of marketing. McDonald's uses a special marketing to children, with a menu of burgers, chicken with soft drinks and small packets of potatoes, and a surprise gift in the pack is the case of the Happy Meal menu. For other potential consumers McDonald's offers a varied menu based on quality, with salads, chicken, burgers, fish, even at the request of consumers can provide a special sandwich without salt or pepper.

The segmentation of a heterogeneous market can be defined as the division thereof into homogeneous groups that the company, in this case McDonald's are chosen as target markets.


The differentiation of the market has a number of advantages and a number of disadvantages for the company, but the drawback is the cost deductible, while the advantages would be, for example, adapts the resources to allow market size and product adaptation to the needs of persons among others.

According to the criteria that we could have used McDonald's would be: • Age. Under which divides the market into several segments. On the one hand children, we must bear in mind that in Europe half of those, about 55% are a family of a couple and a couple of kids, on the other hand we have the single or the population emancipated lives, which would be 11%. All these people are regulars to consume any food prepared and fast.

• Revenues. Is a variable to consider to segment the market, since people who receive low income usually do not have a tendency to consume this food, which is aimed at people with a low income.

• The life cycle influences the segmentation because people who come closest to these restaurants are consistent with the classification made earlier in age.

• Finally we must take into account lifestyle, which is closely related to geography. That is, depending on where in the world we are going to find different cultures and customs, disparate lifestyles, which make this one of the most important variables is taken into account. The quintessential country consumption of such food would be the United States.

One of the things that draw attention is that McDonald's is entering the world of technology to your customers know how healthy is your food, for example McDonald's continues to sell as usual, burgers, fries and ice cream, but know that their customers are increasingly more interested in healthy food have developed an iPhone application to have information on the nutritional characteristics of each of their menus. The application is very intuitive and the user can drag a menu to a virtual deck and see the nutritional information of all the food and each of its elements. The information included is: calories, protein, fat, saturated fat, trans fat, cholesterol, sodium, carbohydrates, fiber, calcium, iron, vitamin A, vitamin C, and the


percent daily value. For now, the application is available in Canada. In many other countries also have iPhone applications but have not included this information.

In the Paris suburb of La Defense business district par excellence of the French capital, is the first U.S. company opens a restaurant dedicated solely to this dish. In addition, customers are able to "design" their own salads, choosing to taste the ingredients.

Advertising is intended to 5% of sales, using massive and invasive strategies.

SUPPLIERS McDonald's needs to source quality raw materials to maintain the pillars of the organization. Thanks to the business they do with McDonald's, system providers have grown to become the largest food processors and distributors in the world, and yet they are unknown to most consumers.

McDonald's created the largest restaurant operation in the world using the least known in the business of food processing. McDonald's developed with its suppliers a policy of long-term relationships and mutually beneficial, which keeps the quality standards of the company.


McDonald's with its suppliers to set up what your competitors recognize as the most integrated, effective and original supplies that exist in the food service industry. McDonald's is set by the standards of uniformity. And he requires all suppliers to fulfill strict quality control requirements and good manufacturing practices, pest control, pest and HACCP plan or critical control points and risk controls, microbiology and sensory evaluation.

PHYSICAL OR NATURAL ENVIRONMENT McDonald's operates in almost all parts of the world has known all along to implement its operating philosophy in all regions of the earth and its advertising appears in every home in the world. Despite its apparent rigidity exists operational McDonald's conscience to adapt to every country, every region, every community, offering domestic and, apart from the basic menu, food adapted to the tastes of the community.

But McDonald's is undoubtedly one of the multinationals more involved with the community, it does in different ways, including using social. A clear example is the Ronald McDonald House, designed to accommodate families of any place that must be kept away from their homes because their children need to undergo some type of intervention or prolonged medical treatment.


It is obvious that the physical environment has a significant influence on business, but it certainly has in mind McDonald's is that economic activity is having a negative influence on the environment, we all know the complaints about the depletion of natural resources pollution of the seas and rivers, increased noise, all are examples of environmental degradation. For example, McDonald's feels it has some responsibility to protect our environment for future generations and perceives the image of the company requires the leader in fast is also an environmental leader. What is the company intends to take action at any time on packaging both in weight and volume, this means removing all the packages and makes them thinner and lighter, changing manufacturing and distribution systems, adopt new technologies and use alternative materials, The company says it is in continuous search for materials that are environmentally preferable. Its ecological culture passes the "reuse", reusable materials applied, when possible, and, without compromising quality standards, health and safety you want for their consumers. Also uses as much recycled materials in construction, equipment and restaurant operations. Proof of all his accomplishments are:

- The reduction of 150 tons of packing for redesigning and reducing the material used on the napkins, glasses, crisp packets, wrapping sandwiches. - The purchase of products made from recycled materials by more than 3000 billion dollars, both in operation and construction of local McDonald's. - Recycling of over two million tons of paperboard, the most common material used for transporting products McDonald's, thus reducing waste of the premises in a 30%.

ECONOMIC ENVIRONMENT McDonald's is found in almost every country in the world and managed to overcome all kinds of perfect economy.


If anything characterizes the economy is globalization. The decade of the nineties, has undoubtedly been a time of great change in the international economic arena. The dismantling of the Soviet bloc triggered processes of opening and economic reform in much of the East, integrating in a globalized economy growing. Southeast Asian countries have maintained high rates of economic growth, while countries in Asia for political reasons had remained outside initiated reform processes are already being reflected in high rates of growth and increasing integration into the global economy. In short, good economic and technological development of countries has favored investment of entrepreneurs to build McDonald's restaurants.

SOCIOCULTURAL ENVIRONMENT Just keep in mind that the culture is different in each country, but if we look at American culture and its values are increasingly spread around the world, in fact they say that the U.S. is Americanizing the world .

In Europe more than half of the population (55%) live in what we call a traditional family, ie a household of an adult couple with children. Although such families remains the most common in the EU, there are increasingly other family forms. Couples without children accounted for 19% of households, while 11% of the population lives in what we call single person households. The increase in single parent families, usually consisting of single mothers now covers 7% of the population. The declining number of marriages has decreased in parallel to a significant increase in other forms of cohabitation, and especially for couples.

Furthermore, the incorporation of women into the labor market has revolutionized all existing cultures, women tend more to their own self-respect and independence of man, these changes foster families to form a increasingly advanced age and are therefore less numerous.


Instability in the labor market and the necessary process of self, favoring people become increasingly individualistic.

This situation leads to instability in the home, changing the level shifts, craving, haste, etc. In short, time is vital.

The enormous growth of cities makes the move to home to eat is impossible, as a result of this, people increasingly spend less time at home, thus, their eating habits vary, so going to fast food restaurants .

PAYMENT ARRANGEMENTS We order food every week, tell the retailers what we want every week and using advance payment. Because of the healthy food, so we need the fresh products. And we have to ask them lay in a stock of merchandise every day, and pay them once a week. This can not only keep our healthy food fresh but also decrease the troublesome about payment. About how customers would be pay for our products and services, we only accept cash. Because we provide the food that is parity, so we donâ&#x20AC;&#x2122;t accept credit card. We pay the salaries every month; we will transform money to each employees account.

CAPITAL Why in an organization we must have a capital resources? Because resources are capital assets used by all organizations to create a product or service in the business . McDonald healty food is a project that does not use a lot of money. Mcdonald only make a few changes in the menu and content. Mcdonald Able to cooperate with vegetable suppliers Whose quality is guaranteed, because according to the project which has been determined that "McDonald Health foodâ&#x20AC;? a healthy diet of fast food is a vegetable. We must make-McDonnald a place of healthy eating and quality. We think Mcdonald is a large and reputable company. so it is not difficult, to find qualified suppliers of vegetables. Finally, to make this project Mcdonald cooperation with several suppliers of vegetables that can be a partner for the company Mcdonald.


F INAL BUSINESS PROPOSAL TEAM #247 Client/Company: McDonald’s We are very proud to announce the opening of Organic Smoothie & Juice Bar in developing countries. We will make Organic Smoothie & Juice Bar available in Haiti, Brazil, Indonesia, India, Korea and Turkey. We will offer a wide variety of Organic Smoothies & Juice Bar at an affordable cost. The price you will pay for a healthy All Organic drink can range from $1.50 - $2.50 depending on the drink Number of pages 23

Team Members: Venes St Ilis / USA-FL Rafael Sasson Martinez De Mattos / BRAZIL Tiara Yunita Nuramalina / INDONESIA Mayank Aggarwal / INDIA Osvaldo Matias Salinas / KOREA Doğukan Savaş / TURKEY……DID NOT CONTRIBUTE TO PROJECT (Was supposed to do “payment arrangements)


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Table of Contents

Part 1: Product/Service.……………………….………………………………page 2-3 Part 2: Target Market……………………………..…………………………..page 4-5 Part 3: Consumer Segment………………………………………..……….….page 6-7 Part 4: Production site…………………………………………….…………...page 8-9 Part 5: Entry Mode……………………………………….………………….page 10-12 Part 6: Staffing……………………………………………………………..........page 13 Part 7: Marketing………………………………………………………........page 14-18 Part 8: Payments arrangement……………………………………….…………....N/A Part 9: Capital………………………………………………………….…..........page 19 Part 10: Likely challenges…………………………………………………....page 20-21 References …………………………………………………………………..…...page 22

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Part 1: Product/Service:

Organic Smoothie & Juice Bar: Looking for a healthy juice bar and snack in your neighborhood. If you are searching for a delicious all natural juice then your search is over because we are coming to a city near you. We at McDonaldâ&#x20AC;&#x2122;s are delightful to bring to you the best organic smoothies while keeping it healthy. Mixed with almond and soy milk, organic juice, fresh organic fruit and yogurts, our smoothies will not only satisfy your needs but will also leave you with an unforgettable experience. Our natural frozen yogurts smoothies contained three main ingredients; which are original, strawberry banana and chocolate. Our frozen yogurts comes with live and active cultures to help preventing gastrointestinal infections, and boosting the body's immune system. They are not only great tasting but are great for your health. A few organic ingredients we used to create our smoothies are organic avocado, organic mango, sunflower, peaches, frozen strawberries, peaches, and vanilla. We are keeping it healthy while providing you with the best and delicious smoothies in town. Our Organic Smoothie & Juice Bar store will be available in six different countries for now. Because our budget is tight, we will be focusing mainly in the capital city of Haiti, Brazil, Indonesia, India, Korea and Turkey, then the provinces, as well as the remaining developing countries. We pick the developing countries because infectious diseases continue to blight the lives of the people living there. According to Global Issues, about 2.2 million children die each year because they are not immunized and we

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want to change that. We will function through three business models: we are going to have 1) Organic Smoothie & Juice bar store, 2) Party Plan, and 3) a Smoothie Bug Van. An Organic Smoothie & Juice Bar store will be located in each of the main city of the countries. The building will be large enough to fit 50 fifty people, and tables will also be placed outside the sidewalk. The Smoothie Bug Van will go throughout the city and park at a designated located location to sell. The Bug Van will be used to connect with the community and to direct customers to our store as a means of advertising. With each smoothie or yogurt sold from our Bug Van, the customer will receive a coupon for one free yogurt that can be redeemed at our store. Our smoothie Bug van will also be going to community events, and other sporting events. The third business model is the Party Plan. This business is meant to generate 20% of our revenue. The Party Plan features music, and all organic everything. We will the talk of the townâ&#x20AC;? when it comes to party. Whatever idea you have in mind, just alert us and your party will not only be the healthiest party but the best ever. Contact us today for your next party because we bring enjoyment, health, and music to it.

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Part 2: Target Market

We want to target the young generation who are interested in living a healthy lifestyle. Even though the fast-food industry plays a significant part in their whole life but we want to offer them an opportunity to be healthy. To start up, All Natural Juice & Smoothies will only be available in the five developing countries; Haiti, Brazil, Indonesia, India, Korea and Turkey. We choose these countries because there are known as the least developing countries in the world which, according to the United Nations, exhibits the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world. We are targeting the developing countries because we know there isn’t or little competitors in this market and that we can be successful. We know food is one the major factors that these countries are facing, but introduce them to a healthy lifestyle is the best we could do to help them. As we’re experiencing the obesity trend in powerhouse countries such as; USA, Norway, and Germany, just to name a few. We don’t want these people who inhabit in developing countries to experience this type of life. Obesity increases your risk for developing high blood pressure, high cholesterol, diabetes mellitus, cancer and breathing problems. We will first target these five developing countries, and then target the remaining of the developing countries, depending on our successful we are. The organic industry grew at a rate of nearly eight percent in 2010, bucking the current trend whereby “flat is the new growth” for many other segments of the economy. According to Organic Trade association, The market industry is experiencing the most growth, organic fruits and

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vegetables, representing 39.7% of total organic food value, and nearly 12% of all U.S. , reached nearly $10.6 billion in 2010 (Haumann, 2011).

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Part 3: Consumer Segment

Corporate Accountability International, an advocacy group, recently sent a letter to 22 hospitals urging them to end their contracts with McDonald's (McD’s) in an effort to foster a healthier environment and curb the childhood obesity epidemic. For years, McD’s has been a target of activists for promoting obesity among people. Our Organic Smoothie and Juice bar directly tackles this problem as it goes against the commonly-held perception that McD’s serves junk food. Besides, according to a Datamonitor report titled “Organic Food: Global Industry Guide,” the global organic food market had a value of $60 billion in 2009 and is expected to reach a value of $96.5 billion by 2014. This is the market that the Bar plans to capture. The target market for our Bar can be segmented on the basis of three factors: 1. Age – The Bar will mainly cater to children and teens as they will form the largest customer segment as product ‘users’. The product will also cater to the parents, both for their personal consumption as well as the product ‘purchasers’ for their children. 2. Customer profile – In case of parents, the Bar will be focussing on healthconscious parents. However, the great taste will also help in bringing on customers of the 3. Existing customers – McDonald’s is the second largest restaurant chain in the world and is a household name in the major cities of the world. The Bars will cash in on the McD brand name and will attract the existing users of McD’s.

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4. Geography â&#x20AC;&#x201C; As mentioned earlier, the bar will be focusing on the major cities of developing markets, such as Haiti, Brazil, Indonesia, India, Korea and Turkey. The pricing of $1.50 - $2.50 makes it affordable in the major cities of these countries.

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Part 4: Production Site “Organic Smoothie & Juice bar store” and “Party Plan” - McD’s usually chooses its sites with after great assessment. Moreover, it usually attracts more businesses (shops, other restaurants, etc.) wherever it opens. Therefore, initially it is important that the Bar leverages on the McD’s locational advantages. The average size of a McD’s restaurant is 5,000 square feet. The size of our Bar is around 540 square feet. Since the seating capacity can be shared among the two, the bar should take up only 200 square feet of the existing restaurants. Moreover, McD’s has also started opening its ice-cream kiosks at several malls. Similar kiosks can be opened at the sites where a McD’s restaurant is already there.

“Smoothie Bug Van” – The Smoothie Bug Van will be located strategically to cater to maximum customers. The following places provide the best advantage: 

Shopping Malls

University Areas

Renowned Street Markets (For e.g. Fashion Street in Mumbai, India)

Outside schools

Beaches

Railway terminals

Airports

In case of moving vans, we will use social media to announce the location of our vans or the route it is planning to take.

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The van will can also serve as a promotion tool by parking it at major events, such as celebrity shows, sports matches, etc.

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Part 5: Entry Mode

Organic Smoothie & Juice Bar will be a subsidiary McDonalds Corporation, like MC CafĂŠ. McDonalds is one of the largest chain hamburger fast food in the world. It has more than 33,000 locations operating in 119 countries. Entry mode selection will be much easier, because McDonalds is a very well-known company worldwide and is a positioned brand. This new subsidiary will have a new market target since it is a healthy and organic product. McDonalds international experience is a plus when working in location advantage and internalization advantage. As a McDonaldâ&#x20AC;&#x2122;s subsidiary the corporation will have total ownership of Organic Smoothie & Juice Bar. Business owners have more commitment, because of the risk of loses in case of failure. That is why we are totally committed and ready to provide all the management resources necessary to have potentially high profits in the long term. Our first six locations are going to be in the main city of Haiti, Brazil, Indonesia, Turkey, South Korea, and India, since we are focused on developing countries. We will operate mainly with Greenfield investment. We will provide the newest and best technology to get the best outcome of our products. Even though Greenfield investment is time consuming, we have the advantage that many of the resources needed will be provided by McDonalds. locations in local countries. Our market share will be built with marketing and advertisement strategies. To provide the best and equal quality of our products in each location, primary ingredients will be exported to each country while secondary or not that important ingredients will be purchased at the local country. In other words, Organic Smoothie &

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Juice Bar will import ingredients and products to each locality. Our profits can be reduced, because of transportation costs and limits when importing. But again that is not an issue for us. We are interested in consumerâ&#x20AC;&#x2122;s happiness and satisfaction. Our goal is that the consumers enjoy our smoothies that help their immune system while having a great moment. Our different options to choose include organic avocado, organic mango, sunflower, peaches, frozen strawberries, peaches, and others. Each country will have a different reception of out products, due to cultural differences. Understanding that situation, besides our normal distribution line, we will adjust and create other products to satisfy consumer needs. Adequate and trained personnel as well will be in charge of caring in our userâ&#x20AC;&#x2122;s satisfaction. Our business model includes stores, Party Plans and a Smoothie Bug Van as a way to advertise our products and gain market share. Stores accommodations will be pleasured to offer a unique environment full of advantages when having a smoothie. Even though security could be a threat in some countries, the Smoothie Bug Van will go throughout the city and parks at a designated located location to sell. Maximum security will be provided to customers and employees, to guarantee product quality and safeness. We think this is a great alternative to expand, because in some countries will be seen as an easier way to purchase a smoothie and others can see it as a new, funny, clever way of making business. The Van is also created to support massive and relevant events. Our last model is Party Plan, in which kids can have parties at our place, but it will not be a common party. We will hold healthy, exciting and funny parties at Organic Smoothie & Juice Bar.

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In conclusion as part of McDonalds Corporation, Organic Smoothie & Juice Bar will have numerous advantages to operate in these specific countries. Knowledge and experience from staff at the corporation are a great help to see this subsidiary succeeding. We want to give a different perspective of McDonalds to the public. We want them to understand that we care about their health and satisfaction.

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Part 6: Staffing

As previously mentioned in “entry mode”, Organic Smoothie & Juice Bar will be a subsidiary McDonalds Corporation, like MC Café. So, basically the product distribution will take place in order to follow all existing Mc Donald's in developing countries that

we

will enter

this product

South Korea and India). Beside all official

store

(Haiti, Brazil, of

Indonesia,

Mc Donald's,

Turkey,

there

will

be a subsidiary of Organic Smoothie & Juice Bar. In addition, there will be the bug van that has been mentioned. Organic Smoothie & Juice Bar will hire the candidates. We will hire new employees rather than using the same existing network by the fact that we increase the number of stores and sales.Therefore, we must be better prepared to be able to meet the newmarket demand. We wish to hire one or more contract recruiters, which handle recruiting, coordinate high-priority searches and coach line managers on how to "close" candidates. We decided to hire specially because the profits missed from not hiring exceed the cost of adding a new worker. The initial idea is to hire native people of the country who will work on our network. We intend that our employees have the same language,same culture and same mode of action than most of our customers (who are also native).

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Part 7: Marketing

Below, we have the sequence of activities designed to suit the needs of Mc Donald's, as well as detailing some conceptual aids, when so required. Guidelines: â&#x20AC;˘ Understand the environment which the company operates â&#x20AC;˘ Develop and describe the strategies of Creation, Capture and Maintenance of Value, with their respective action plans The project was divided into three stages, and the details of each one of them you will find in the next item in this document. The steps are idealized: 1) Analysis of the Environment 2) Value Creation 3) Capture and Maintenance of Value

1.1.

Environment Analysis

At this stage, will be analyzed data information from secondary sources, therefore, publicly available research and studies related to the variables that influence the enterprise environment. The purpose of this study is to understand the industry and the environment in which the company operates, and to identify trends inmacro and micro. As an auxiliary tool in this process, we will analyzethe "5C's" of Marketing (customer analysis, company analysis, collaborator analysis, competitor analysis, and analysis of the industry context.)

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and Porter's five forces (Rivalry among Competitors, Bargaining Power of Suppliers, Bargaining Power of Buyers; barriers to Entry, Threat of Services / Products Substitutes). Based on the information obtained and analyzed, we will identify the opportunities and threats that the external environment provides to the company. To organize information clearly and cohesively will be neatly analyzed: 1) Economic Environment Sector 2) Market Trends Target 3) External Stakeholders 4) Competitors and Products / Services Substitutes 5) Barriers to Entry 6) Opportunities and Threats Analysis Based on the information collected and analyzed on the external environment, you can check the preferences of the target market,beyond the current situation and trends of the activities undertaken by the sector. The use of such information will be of great importance forthe development of a marketing plan that takes advantage the opportunities offered by the environment and minimize the risk of threats.

1.2.

Value Creation

Based on the analysis of the Environment, will be the value that the structured / a product / service / brand will deliver to the customer. This step is of great importance for the success of the project developed,since, to reach the target market effectively, it is essential a positive impact in the minds of consumers, making the functional and

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emotional benefits of products / services / brand are celebratedbefore the monetary costs, time, energy and psychological. For this purpose, initially there will be a detailed segmentation of the target market, therefore, will be identified and traced the profile of the group company's customers to verify their preferences consideringbases demographic, psychographic and behavioral. Based on this information, you can prepare the declaration of the value proposition, which is to structure the set of benefits that the company promises to deliver to the customer in order to effectively meet their needs and preferences. In order to design the product / service and company image in a different place in the mind of the target, we analyze the reference with respect to the competitive category, and on the basis of parity andpoints of difference, will be declared the desired positioning, aiming maximize the potential advantage of the product / services company. Although this step will be described in detail the characteristics of products / services offered by the company. In addition, we outline the strategy distribution considering the location, the geographic coverage of products and distribution channels of the company. Finally, based on the above, in order to increase the perceived value of products / services to the client, will be prepared and analyzed strategies aimed at promoting the dissemination thereof, and the company's brand.

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1.3.

Capture and Maintenance of Value

At this stage, the strategy will be developed for pricing of products / services of the company and, based on information collected and analyzes undertaken during the steps of creating and capturing value shall be established strategies for acquisition and customer retention. To capture the value, it is important to devise a pricing strategy well defined and consistent with brand positioning. In order to determine prices, estimates will be held fixed and variable costs, consideringthe offerings of competitors and prospects in relation to demand for the product / service. In addition we will determine the pricing strategy (response to competition, increase market share, taking the lead in the market, increase customer perception of quality, increase the turnover of products, among others) and this is fundamental to the definition the final price. The marketing and sales strategies aimed at attracting new customers are based on the principle that they are always looking for product / service that they will benefit from the added value, therefore, which offers the best cost / benefit. Regarding the relationship with customers, will outline strategies to retain them and loyalty through in order to stimulate future purchases and keep their customers satisfied. Such satisfaction is a direct reflection of the performance / of the product / service / brand in relation to the expectations of customers, therefore, based on previous experiences of consumers, the reputation of the products / services / brand and the promises and information provided by the company .

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With the analysis above, we expect not to face problems such as language and cultural and legal differences, advertising and so on.

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Part 9: Capital

McDonaldâ&#x20AC;&#x2122;s Corp, as the worldâ&#x20AC;&#x2122;s largest restaurant company, plans to spend $80,260 on capital improvements in opening an organic smoothie & juice bar. Half of spending will be on juice bar and the other half will be spent on providing customers with a healthy smoothie, which is called by organic smoothie. Considering the startup cost, our Organic Smoothie and Juice Bar will be start opened in the main city of six different developing countries, which is Haiti, Indonesia, Brazil, India, Korea, and Turkey, before it is going worldwide. We will make our smoothies available through three key components business models, which are Organic Smoothie & Juice bar store, Party plan, and a Smoothie Bug Van. Our expenses will come from furniture, computer equipment, vehicles, advertising, license, insurance, and lease payments. In addition to capital improvement from our personal finances, we plan to obtain funds from loans and franchises. Our Organic Smoothie and Juice bar could be either financed by Bank loans or by franchising. Since McDonaldâ&#x20AC;&#x2122;s offers franchises in order to reduce their capital costs, sell a new kind of franchise that includes the organic smoothie and juice bar would be a good idea.

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Part 10: Likely challenges

One of the first and major challenges our newly open business will face is financing. Because of the downside of the economy, it will be very hard and challenging for us to find lenders, banks, or other types of financial institution to borrow money from. As a new business, we are going to search and explore other financing sources, for example using our personal savings, borrowing money from relatives or friends to get started. Another challenge is time management. As owners we need to know that we canâ&#x20AC;&#x2122;t do everything by ourselves. We might get carried away and want to run the business ourselves so when it succeeded we could take all the credits. Also, we might find ourselves spending a lot of time on things that are not going to help the growth of the business. To avoid theses flaws, we need to choose the tasks that are most important to focus on and which ones to leave for others to complete. Lack of experience is another challenge we will face. We are all college students from different countries, and most of us are not well equipped to run the business. We know a little about business because we are business majors but starting or running a business requires more than just come up with a service to sell. To make the company profitable we have to be an expert at accounting, sales and planning. To overcome that challenge we are going to do a thorough research on our product and service. Last but not least, network. Networking plays a major role in the market industry and as a new business in town; we are going to need that in order to succeed. Due to the fact that we are all from different countries, we each have different set of skills and contacts that can be brought to the table. It might take a few years to build a strong network but eventually

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we will make it happen because we are a group of competent students who share the same vision.

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REFERENCES Oxford Dictionary of Geography. (2012, April). Retrieved from http://www.answers.com/topic/least-developed-countries

Organic Trade Association . (2011, April). Retrieved from http://www.organicnewsroom.com/2011/04/us_organic_industry_valued_at.html

McDonald's Smoothies: More Calories Than A Cheeseburger. (2010, July). Retrieved from http://www.thatsfit.com/2010/07/14/mcdonalds-smoothies-more-caloriesthan-a-cheeseburger/

Global Issues. (2010, September). Retrieved from http://www.globalissues.org/article/26/poverty-facts-and-stats

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Profile for Gateway Magazine

anthology of IYC 2012  

compilation of business report IYC 2012

anthology of IYC 2012  

compilation of business report IYC 2012

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