The intended business will be located in Toronto, Sixth Street. The site of the shoe line store will be approximately 100 meters from the main street, given the ideal position and the viability of the business at that point. The influx of people in the street creates a potential customer for the business at that point. Moreover, the street is connected to the back street where people can access the shop from both ends and get the service. We strategically plan it at this point because of its potential to attract travellers who frequent the road, and it is estimated that the street alone has a population of more than 20,000 passing by daily.
However, the proximity and existence of major bus terminus, other shops make it ideal for people to shop at the store. The office space and the rear room for staff and shoe display has a space of 1,200 sq. with suitable parking space of 140 sports. The total space is worth $4500 and the accumulated annual rental expense of $54,000, which is economical for the start-up. The set space is enough for storage of inventory, dummies and the remainder of the squire used as the waiting spot for the customers in the store (Neil Wrigley, 2014). However, the business location is much strategic since it is near the exit point of the street and one can easily shop here before leaving for home in the evening. The other expenses will be the renovation and furnishing which is likely to account for $20,000 annually.
According to the economic statistic of Canada, the shoe business accounts for up to $155 million of the gross domestic product net revenue per year which is approximately 0.2% percent of the total gross domestic product. The statistic indicates that the shoe business is viable and worth venturing into by the businessmen. Moreover, the potential growth rate is depicted to rise by 2.5% per year, thus making the business more viable throughout the trading period. It is worth noting that not all the city dwellers will purchase at the store, the approximation based on the average sales and not the maximum (Neil Wrigley, 2014). Besides, the net revenue is likely to be higher than the expected or the projected sales; thus, room for adjustment is provided.
The competing business in the market are not strategically located in the region; thus the monopoly of the market can still be practiced in some regions. Also, the online marketing of the products makes it easy to make sales.
The strategic position of the business makes it easy to create a competitive advantage in the market. The business will employ a marketing mix through a penetration price which is moderately lower than the normal price of shoes as compared to that of the competitors. Moreover, the client base serves as the exit and entry points which is strategic for customers creating ease of accessibility.
There are two competitors in the market, but our brand is much superior to those competitors brand, making the business competitive in the market. The dune footwear store has a well-established strategy, and it is the direct competitor in the market, but there is this weakness of not treating customers well. Therefore, we will capitalize on that weakness by recruiting the best customer care service to attract more customers into our store through favourable service provision.
Creating a website makes access possible by the clients is another strategy of penetrating the market. Since most of the clients can access the internet, we will also offer delivery services to them, thus creating a wide market for the products. However, the shoe line design offered at the store are unique, and the supplier of our products are held secret to deter the competitors from polluting the market with the counterfeit. To strengthen our sales, we intend to use brochures and another promotional strategy to reach the clients in the market. Furthermore, the brand design sells for itself in the market, making it easier to reach more potential customers.
The business intends to seek the sales force opinion and utilize the available resources to place the business ahead in the market. The operation hours of the shoe wear store is 8.00 am to 8.00 pm. This time is set for convenience and to enable the daytime customers to pop up any time of the day to get the service while they can still manage to go back to their business. With the operating hours, a guarantee of $1200 is achieved, making it $36,000 per month which is good for a start-up. Another promotional strategy is a market focus for the first year of the business to see the market potential as we capture the recurring expenditure of starting the business in the set location.
After the business has picked up, we intend to increase the sales focus by 25%, basing on the increased number of clients for our products. By doing so, the daily sales will also increase by the same percentage or more than that to ensure that the working expenses are catered for in time. With for years of operation, the business will achieve its return on capital without any other pending liability in terms of loans. The only liability of the business will be its operation expenses which are normal to every business though they can be minimized by employing more technology in the system (Berg, 2014).
Despite the numerous business offering similar services, the Grit footwear will still buy from us due to the presence of seasonal promotion discounts offered to clients. The competitive prices in the market are manipulated through discounts and offers to attract more clients in the business. The offers will include the shopping vouchers to esteem clients and discount on a given number of items purchased by the customer.
Protecting the business
Every business investment deserves protection, and the business will be covered by Insureon Company. The expected annual premium is around $700 which cover the business owner’s policy, general liability insurance up to $500000 plus errors of omission. The comprehensive coverage of the premium allows the business to operate with minimal risks since it has been covered.
Additionally, the security personnel will offer more protection on the business. This personnel will be responsible for security during the night, and their services will be made easy through the CCTV camera system installation in the premises. The cameras will be fitted in strategic points for full coverage of the whole building, and the monitoring server will be set in a given room to watch all the movement in the building and the rear parking space.
Berg, B. (2014). Study 2: Retail Branding and Local Competition: The Importance of Retail Brand Equity and Store Accessibility for Store Loyalty in Local Competition. Retail Branding and Store Loyalty
Business written abroad by EE/EEA insurers through branches and agencies. (2016). OECD Insurance Statistics 2015, 207-209.
Neil Wrigley. (2014). Store Choice, Store Location, and Market Analysis (Routledge Revivals).
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