Executive summary
The Right Byte Business is a new computer company producing different Killer Byte and Killer Bite Light computer brands and offering exceeding customer requirements by providing the customers with the highest quality products, services, and same-day fulfillment. A team of well-experienced individuals manages the company. Bla Vesna, the company’s VP-Accounting and financially responsible for presiding over the overall leadership, graduated with a master's degree from Illinois State University and has worked with various companies; he has managed to acquire essential skills to drive the success of our company. Mr. Xxxx is the company's chief technology officer responsible for creating the best prototype for our products. Ms. Zzzzzz is the company's chief marketing officer, responsible for developing marketing strategies for the company's products. The company expects to serve a customer base of approximately 30 million dollars offering various opportunities due to the high growth rate resulting from technological advancement.
The company has various strengths and opportunities. These include more access to different raw materials for building our computer products and differentiation advantage. The company offers more effective services with better price strategies and enjoys a competitive advantage from cost leadership. It can produce products at a relatively lower price. We project to have a net operating cost of $1,411,023 in addition to a cash balance of $6,661,125 by the end of the fifth quarter of its operational period.
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At its beginning, the company invested a capital amounting to $ 4,000,000 to start its operation in the first quarter. However, at the moment, the company is seeking an additional capital amounting to more than $2 million to invest in increasing the size of the plant since it has taken an entire quarter to come online. That would be an essential strategy for the company's future even though it has come when the cash flow is an ongoing issue. Generally, the company focuses on its various strategic plans to achieve competitive advantages in the market.
Business description
Our company is based in the US with its headquarters in Chicago. After they were motivated by the need for a new line of microcomputers in the twenty global markets in North America, Europe, Latin, and South America, Asia, the Pacific, and the Middle East, the company founders started the company. The company further aims at fulfilling the needs of various market segments such as the Costcutter, Workhorse, innovator, traveler, and the Mercedes market segments. Our mission is to be the best competitor in the computer market, offering the highest quality computer brands for the various customer segments. We want to be the market share leader, profit margin leader, and elevated service provider.
External environment analysis
Market profile
Our company team researched the market profile focusing on the overall size of the market, projected market growth, and company positioning. The market size by revenue measurement is $8.4 billion. Furthermore, the market growth is projected to be 4.9% in the next five years.
Customer profile
The company's customer profile research focused on market segments. Our company market segment results showed various computer applications for different customers, as shown below.
The number within the table shows how important the needs are to each segment. For that effect, our brands will be focused on each customer segment’s use of the computers to assist them in their daily use. Furthermore, the customer’s price sensitivity also shows that each customer segment from various locations was willing to pay different prices, as seen in the table below.
Though the competitors such as Dell, Apple, Gateway, and Sony hold a larger market share, our company comes with a better strategy for fair competition for the market share. However, Dell's competitors have competitive strengths such as a brand name valued at 7.5 billion dollars, product customization, direct selling of its models, and good environmental record. However, the competitor also faces competitive weaknesses, such as having considerable steam of revenues from laptop sales, which is simply a customized product. Computer hardware products have a shallow profit margin. Moreover, the company has very few retail outlets since it sells its products online (IBISWorld, 2020) . As a result, it provides less visibility for its products even though the consumers do not easily trust products they cannot hold by their hands before paying for the purchase. The company also has low customer services due to outsourcing its call centers offshore. For that effect, our company will take advantage of such weaknesses to gain a share of customers and compete favorably in the market. For instance, we will provide high-quality services to the customers as this is our primary objective for a better company brand.
Furthermore, our company will also open up branches in various locations to meet the customers' needs in such an area. For example, we had already opened sales offices in Los Angeles and London. The company will continue to open sales locations in other places such as Texas, New York, and various other locations within the US.
Competitive advantage
Our company enjoys various competitive advantages to thrive well in the market. For instance, our company will employ a direct selling business model. We will not sell our products through the big-box retails in various locations. We will focus on directly selling the products to consumers and enterprises. That will help us keep our thin profit margin to ourselves.
Additionally, our computer brands are also customized to meet the various customer needs to add a more excellent value to the consumers. For instance, our company will focus on the multiple needs of the customer segments in different locations. As a result, our company will enjoy a competitive advantage.
Our company also enjoy several opportunities to continue with fair competition. For example, our company will provide several services such as cloud, infrastructure, security, and enterprise solutions such as networking and storage. These are the most wanted services by the current customers. Growing these divisions will result in better opportunities to grow and also offers a higher profit margin. Our company will also use the combination of the investments and the loan provided in the fifth quarter of operation to invest in establishing our R&D facilities. The company will use the R&D facility to discover new technologies and patents, creating new opportunities for better growth and fair competition.
Market strategy
Target markets
Our company market analysts conducted market research and discovered the various market needs for different customer segments. That was presented in the table below.
The analysis will help the company to fully integrate each customer segment’s needs in the computer brands that the company produces. According to Statista (2020), the current market share for computer products stands at HP Inc at 22.2%, Dell at 16.8%, Apple at 7%, and Acer at 5.7%. However, the market share is projected to decline, particularly for the HP and Dell companies, due to the changes in customer segments' requirements. Our company, therefore, targets the new segments' needs, such as cost-cutters, innovators, Workhorse, travelers, and Mercedes customer segments in the market.
Product line
The two main products that our company has been producing are killer byte and killer byte light. However, due to the discovered need changes among the various customer segments, our company focuses on the continuous design and release of the two new products. According to a Private report from Customer Union and International Advertising Federation, which analyses the market needs and brand offerings, we recommended that we enhance our products to meet the target segment’s needs. We had to look at creating two new products called Innovator and Workhorse. Seemingly, the killer brand was not a” killer brand.” Secondly, the International Advertising Agency stated that the advertisements did not naturally meet both target segments' minimum requirements. We created two other promotions analyzing "Use Pattern." We named the first laptop Innovate, which includes software reflecting the use pattern and software available: technical graphics, web design and management, statistical analysis, communication with other computer data management-accounts, inventory, engineering/design, presentation, and business graphics. That is one of the top 8 programs requested from the market research. The second laptop, which we named Workhorse, includes software reflecting the use pattern and software available: word processing, booking, budgeting, and communication with other computer data management-accounts, inventory, web design and management, bus graphics, presentations, and statistical analysis.
Research and development
We focus on performing our research on the market. The study will cost the company $20,000 (Game.ilsworld, 2020) . It will focus on the brand demand, competitors’ sales force, competitor’s prices, competitor’s local advertisements, regional advertisements, price judge, and the competitors’ profile. The research will take three months to be effectively accomplished and the data analyzed for better decision making.
Pricing
Our company will focus on the below pricing comparisons for each computer brand in the market to help us develop a better price for the upcoming quarters. For that effect, our company will set its prices as below.
(Set prices as indicated by Game.ilsworld, 2020)
Our profit margin will, therefore, be:
Killer Byte will be marked up to have a profit margin of 10%, Killer Byte light a margin of 12%, Workhorse a margin of 15%, and Innovators at 13%.
Promotional choice
The company will focus on using personal selling and advertisement as the main promotional methods. Together with an advertisement, personal selling will be enhanced in the various company branches since they provide the best and practical approach to outcompete in the market. Furthermore, the promotional choice will cost the company fewer expenses as compared to other promotional decisions.
Sales and Human resources plan.
Distribution
Our company distributes its sales offices in all areas within the US, including its major cities, to quickly reach its customers across the country. The expansion will take one to two years, and it will need at least two sales agents per office in addition to one branch manager per office.
The company will also use various staffing and retention policies, such as providing ongoing education and straightforward ways for its other staff, offering the right benefits to the employees, and leveraging the technology since customer's needs changes frequently. The employees will be compensated for any losses they incur while on their duty to avoid any employee losses. The company will also offer its employees training freely after every quarter of business operations to help enhance their effectiveness in various operational areas.
Manufacturing plan
Our company will produce 60 fixed units daily, resulting in approximately 4000 units in each of the quarters 5-8. The projected demand's operating capacity will be maintained at 134 per day, resulting in 8,650 in the one quarter. That is, after reviewing the previous quarter operations, which did not auger well. The overhead costs, such as rent and utilities, will be reduced by increasing production volume to lessen the average overhead cost in each unit of computer produced.
Financial plan
In summary of the company’s performance concerning finances has been summarized in the below balance sheet.
On the analysis of the return on investment, the below table focuses on various financial ratios.
Using the above financial information, we expect the company to increase its revenue profitability by at least 15%, resulting in a higher cash flow.
References
Game.ilsworld. (2020). Sign-up or Login to Marketplace® Business Simulations . Game.ilsworld.com. Retrieved 15 November 2020, from https://game.ilsworld.com/mpl/web5/engine.php?tpl=student&studentID=11043323&sessionID=22ced7b18e18a2c06909c5eb9b57fb2e&quarter=5&language=en-us&resource=financialratios&parentResource=finance&tab=workspace.
IBISWorld. (2020). IBISWorld - Industry Market Research, Reports, and Statistics . Ibisworld.com. Retrieved from https://www.ibisworld.com/industry-statistics/market-size/computer-manufacturing-united-states/#:~:text=What%20is%20the%20market%20size,is%20%248.4bn%20in%202020.
Statista. (2020). PC market share 2018 | Statista . Statista. Retrieved 15 November 2020, from https://www.statista.com/statistics/267018/global-market-share-held-by-pc-vendors/.
