Business Plan
MSc Business Management
Oxford Brookes University
BMGT7034: Planning for New Business Ventures
[DATE]
Student numbers: 19065697, 19138946, 19125991, 19172960, 19172488 & 19172913
Word count: [words]
Business Plan
1
Executive Summary
4
Introduction
6
Business Model
2.1 Value Proposition
2.2 Business Model Canvas
2.3 Mission & Vision Statement
8
8
8
9
The Market
3.1 Identification of target market
3.2 PESTEL
3.3 SWOT
10
10
10
11
Marketing Strategy
12
4.1 The Marketing Mix
4.1.1 Product
4.1.2 Place
4.1.3 Price
4.1.4 Promotion
4.2 Segmentation, Targeting and Positioning
4.3 Clustering the Market
4.3.1 Targeting approach
4.4 Positioning
12
12
13
13
13
14
14
14
14
Operations
5.1 Transformational Model
5.2 4 V’s
5.3 Legal Compliance
5.4 CSR
16
16
16
16
17
Human Resources
18
Financial Plan (Akshit)
6.1 Sales Forecast
6.2 Profit Model
6.3 Cash Flow Model
6.4 Break Even and 12 months cost
6.5 Contingency Plan
We have created a Gantt chart (refer appendices) to know the targets for each month.
This will allow us to assess deviation each month and make relevant adjustments in
order to accomplish our set goals.
20
21
21
21
21
Risk Assessment (Maayan)
21
Growth and Exit Strategy (Gina)
23
References
27
21
Appendix 1: Competitor overview sports nutrition
31
Appendix 2: Competitor overview endurance sports nutrition
32
Appendix 3: PESTEL analysis
33
Appendix 4: Value Proposition
34
Appendix 5: Business Model Canvas
34
Appendix 6: Transformational Model
36
Appendix 7: Customer Segment
38
Executive Summary
Introduction
Champ is a company started in 2022 to meet the needs of athletes fueling their training and
sharing a community of like minded athletes. In summer of 2020 our marketing director,
Jenny, started a pick and mix company that accelerated when athletes started promoting the
product. She found that there was great need from athletes in endurance sports to gain
access to easy to eat, tasty and inspiring sweets that fuel performance and aid recovery.
This gap in the market paved the way for Champ. Our business plan that follows discusses
how our six cofounders
Business Model
Our mission at Champ is to athletes perform their sport longer and stronger. We do this
through our value proposition and business model canvas. Our sales director Brook McIntyre
has worked to develop a strategy to deliver a product to customers. With a focus on
customer experience our value proposition is to deliver a high performance sweet that is
easy to eat, tasty and inspiring. We relieve customer pains of existing sticky, bland tasting
gels and blocks with our candy. Our product delivers taste and accessibility while our athlete
community provides inspiration. The channels through which we deliver our product helps
us to connect with customers and create a brand that celebrates a community of athletes
who use Champ to perform longer and stronger.
The Market
The sport nutrition industry has grown by nearly 60% in the last five years with continued
growth predicted. The growth potential for entering this market is high so we feel now is the
time to launch Champ. We investigated the competition within the market that specifically
focuses on endurance sports and found targets to compete with these brands. Our PESTEL
also supported the opportunity for growth in the industry after an increase in cycling due to
the COVID 19 pandemic, growing e-commerce market, and our ability to comply with food
safety standards. In conclusion the market is open for growth and Champ is ready to take
on the challenge.
Marketing Strategy
Our marketing director Jenny Bates has created a plan with will help customer connect with
our brand and develop the identity that sets Champ apart in the market. Identifying the 4
P’s, customer segment, targeting and positioning make up our marketing plan to bring the
product to customers. Our customers are involved in endurance sports, young to middle
aged and interested in performance enhancement. These customers also have a general
internet literacy and will be able to use our online platforms to connect with our product.
Primarily we will sell our product via a website direct to customers. Secondarily our
promotion will be carried out on social media platforms. The rise in accessibility to
Instagram, Tic tok and Facebook will aid the growth of our product by connecting a
community of users online and in person. Furthermore we will use online advertising
through Google and Facebook.
Operations
To keep a close connection between customer feedback and production, we will produce our
candy in house. Our operations director Dries has a great role within our business plan to
make sure we deliver the highest quality product. We will take raw materials such as recipe
ingredients, packaging and customer feedback to create our final product. Furthermore our
staffing, delivery and IT infrastructure will play a key role in business operations.
Human Resources
Our six co-founders will have key roles within our business in partnership with a freelance
website designer, food consultant, legal consultant and part time factory worker. The roles
each founder will play in the business are to develop and run the teams generally outlined in
the business plan. The website designer will be responsible for establishing our online store,
and creating content for our website. The food consultant will become an essential partner in
order to develop and update the recipe for Champ. Our legal advisor will support us in
contract negotiations and manage other legal issues. Lastly our factory worker will help run
machinery and produce the sweets.
Financial Plan
Our CFO Akshit Gupta has developed a financial plan that will help our business grow from
day one. Our research and development phase will last four months and beginning in
September we will start selling our product. Included in our finances is the plan for
marketing and sales to promote growth. Our initial financing will include £60,000 from our
co-founders and another £60,000 from investors.
Risk Assessment
Growth and Exit Strategy
1. Introduction
Using our combined skills, knowledge and passions in a range of industries, we are proud to
introduce: Champ, a high performance sweets company. The product is easy to eat,
nutritious and delicious.The business model below covers our management team’s expertise
and builds a strong foundation for growth.
Jenny Bates Marketing
Manager
I am a Marketing and Entrepreneurship student, high performance rower
and rowing coach. I have previous experience marketing my own sweets
company, Jellees.
Akshit Gupta Financial
Manager
I have done my undergraduate degree in accounting and business
administration. I have managed the finances of many events conducted
in my previous university and also one private construction project. I've
always been curious about how to raise funds for any project, and I'm
looking forward to working in finance for this organisation and learning
from it.
Juxhina
DemiriCEO/Growing
and exit
strategies
I have completed my first MSc in translation and interpretation and now I
am studying international business management and entrepreneurship.
Also I have been working in the aviation industry for the last 7 years as a
corporate flight attendant. I have always been interested in business and
I am looking forward to expanding my knowledge in this sector through
shared knowledge and learning.
Dries Beer Operation
In 2018 I graduated from the undergraduate Sport, Management and
Business at the University of Amsterdam. I am a proactive and
Manager
entrepreneurial young professional, interested in sport and business.
Furthermore, I have worked for two different companies, both in the retail
sector. I think I can contribute with my working experience.
Brookmyer
McIntyre Sales Director
I began my high performance sporting experience in 2017 at the
University of Tennessee. I became a rowing student athlete competing at
the highest levels of the NCAA while completing a degree in Sport
Management. My love of rowing, business development and community
building has brought me to Oxford Brookes University. As Sales Director
I am excited to bring together our Champs to enjoy their sport for longer
and perform better.
Maayan
Kalakuda Risk
Management
and Problem
Solving
I am a Structural Engineer and I have experience as a manager in
different companies. My passion for innovation and business
development led me to do a master degree in International Business
management and Entrepreneurship. I have always been interested in
analysing risks and providing solutions. Therefore, I am very excited
about my role in this company and look forward to providing athletes with
great products.
2. Business Model
2.1 Value Proposition
See full Value Proposition statement in Appendix 4.
2.2 Business Model Canvas
See Business Model Canvas details in Appendix 5
2.3 Mission & Vision Statement
Mission Statement
Champ helps athletes perform their sport longer and stronger.
Vision Statement
We will create a global network of athletes who use Champ to celebrate a shared
love of sport. Champs across the world get more out of their sport by aiding performance
and creating a community of competitors. With Champ no one is ever alone so athletes can
go longer and stronger.
3.The Market
In this chapter, the market will be analysed. How big the target market, what is the growth
potential, what is the percentage that we want to claim and questions like this will be
answered in this part of the business plan.
3.1 Identification of target market
Our product will be part of the sport nutrition industry. The current market size in sport
nutrition in 2021 in the United Kingdom is 1,021.9 million pounds (Passport, 2022). This is
almost 60% more than in 2016 (Passport, 2022). The predicted growth for this market is
8.7% per year until 2025 (MarketLine, 2021). Taking these figures into account, we can see
that there is a lot of growth potential in the market and the past 5 years the industry has risen
enormously. Therefore we think our product will have a bigger chance of succeeding in this
industry. If the industry would have been decreasing in market size, we might consider
changing our product.
61.4% of people aged 16 and over were ‘physically active’, meaning they did 150 minutes or
more of moderate intensity physical activity a week (GOV, 2022). This is information that
there is a large group in the UK that is physically active, however, we focus our product on
people who are exercising 4 times a week or more, so therefore this information is satisfying.
To get a better understanding of the current environment in the sports nutrition industry, we
made an overview of the top ten biggest brands in the sports nutrition industry, this table can
be found in appendix 1. Then we categorised these brands in their positioning strategy, this
gives us a better understanding of what companies are our main competitors, because our
product specifically focuses on endurance sports, which separates us from the competitors
who are focussing on the fitness or other niche markets. This gave us the information that
the biggest competitors in our niche are Maxinutrition, SiS and PowerBar. In order to
concentrate more on the brands who focus on endurance sports, a table is created with the
top 9 brands in the sports nutrition industry in the United Kingdom (Passport, 2022), this
table is added in appendix 2. These brands own between 3.5% and 0.1% of the total market.
0.1% is a total of 1.9 million of revenue in 2021, this is the brand Etixx, a Belgium sports
nutrition brand. For us, competing with a brand like this would be a good target to achieve in
the future, 5-10 years.
3.2 PESTEL
In the macro environment organisations are influenced by political, economic, social,
technological, ecological, and legal forces. These forces are mapped in a PESTEL analysis,
for our new business such an analysis is created and can be found in appendix 3. The
macro-environment is dynamic, and the questions give answers where possible
opportunities and threats are for the organisation (Johnson et al., 2017). From this analysis
are three factors highlighted and these will be critically evaluated.
Increasing popularity of cycling due to Covid and the introduction of ‘Gear change, a
bold vision for cycling and walking’. The Covid cycling boom was real and increased the
amount of people owning a racing bike enormously. This led to the ‘Gear Change’ plan from
Boris Jonson to improve the cycling infrastructure and invested 2 billion pounds to make the
UK a real cycling country (Kingdom of The Netherlands, 2021). Also, running experienced
the same growth, people started to run more because of the pandemic (Nielsen Sports,
2021). This presents an opportunity for the business, since the target market is growing.
However, it will be interesting to see if these changes will stay after the pandemic is gone.
Growing opportunities of e-commerce. Especially in the last few years e-commerce has
been responsible for a much bigger percentage of the total revenue in almost every sector
(Clark et al., 2018). This factor is very important for our business, because the main sales
channel is the website.
Comply to the Food Standard Agency requirements to set up a food business. In order
to set up a factory to create the candy, we will have to conform to the regulations from the
Food Standards Agency of the UK government (FoodStandardsAgency, 2018). This will be
the most important macro environment factor. In order to start a food business, there are a
lot of regulations to confirm. Laws about the ingredients for the product, safety in the factory,
working conditions in the factory, etc. Therefore, this part has to be well researched and
applied to the business.
3.3 SWOT
In order to give a complete SWOT analysis, the PESTEL analysis will be used to fill in the
opportunities and threats. The strengths and weaknesses are created by critically analysing
the attributes of Champs.
Strengths
- Young and ambitious founding team members
- Innovative product
- Big network within university sports teams
Weaknesses
- No knowledge about developing food/candy in the team
- Barely experience running a startup
Opportunities
- Increasing popularity of running and cycling
- Growing opportunities for e-commerce
- Growing importance of CSR
Threats
- Comply to the food standard agency requirements
- Increasing inflation
(801 words)
4. Marketing Strategy
4.1 The Marketing Mix
Ehmke, Fulton and Lusk (2005) report that marketing is about positioning the business to
satisfy the market's needs.The marketing mix considers product, price, place and promotion,
identified as ‘The Four P’s’ of branding (McCarthy, 1964, cited in Constantinides, 2006).
4.1.1 Product
According to, Yudelson, (1999) product can be defined as all the benefits, anticipated or
present, that the customer aquiers from the exchange. Whilst Ehmke, Fulton and Lusk
(2005) state that it is about finding the right product to satisfy the target customer’s needs.
Products that are marketed include services, events, persons, places, information, ideas and
properties (Kolter, 2006). The product is sweet for athletes and those interested in
maintaining a high level of health and fitness. It will provide energy and aid recovery as well
as tasting and looking delicious. The target personas are sporty people ranging from age
18-50 who are interested in health and wellness. The packaging and brand image will be
professional and sports orientated and draw in those who like trendy and cool brands.
Product
A sweet
Core Product
A packet of high performance
sports sweets
Actual Product
Specialised recipe that creates a
delicious and nutritious sports
sweet
Trendy packaging
Easy to eat and carry product
A selection of individual sweets in
one packet
Augmented Product
Join a community
Discounts to sponsored
competitions and events
Source: Author (2022).
4.1.2 Place
Place is usually defined by ‘distribution’ in a commercial marketing mix (Constantinides,
2006). Saracevic and Wood (1981) identify interpersonal delivery where products are
specially delivered to consumers and strategic location where products are placed at
strategic locations as two major channels for dissemination. Both of these methods will be
deployed. Consumers will purchase sweets online via the website and will receive orders via
the post. The business will be launched in Oxford and circulated amongst universities as a
strategic way to boost sales amongst an accessible network of sports teams.University
brand ambassadors across the country will help the brand to grow nationally because
utilising an ambassador scheme is deemed an effective way to grow a brand (Smith et al.,
2018).The long term goal will be to take the sweets to international sporting events such as
an Ironman to trigger global growth.
4.1.3 Price
Virvalaite, Saladiene and Skindaras (2009) expressed that a price is an essential factor to
consider for determining customer’s satisfaction because when customers estimate the
value obtained from the product, price is often considered. Nakhleh (2012) reports that price
is how much consumers pay for the product. Production costs, distribution and promotion
costs must be considered. The price must reflect the supply and demand relationship
(Grönroos,1997). In order to increase customer satisfaction, organisations must manage
price perceptions of customers by carrying out appealing pricing and offering reasonable
prices and lower prices whilst maintaining a high quality product (Berman, 2005). From the
market research questionnaire, people are most willing to spend 0.5-1 per serving, closely
followed by 1-1.5 per serving so we will work around this price category (Smith, 2016).
4.1.4 Promotion
Promotion is considered to influence or encourage customers to enter into the
transaction/relationship. Costs and benefits of the transaction will be communicated as well
as information designed to reduce the perceived costs such as ‘low price’ and ‘free delivery’
(Yudelson, 1999). Promotion involves mechanisms by which the target market are informed
about the available products and services offered by the company (Padhy, et al.,2008).
The plan is to send sweets to celebrity athletes from a variety of sports with a large social
media following and ask them to promote the sweets on various social media pages
including Instagram and TikTok. Create social media accounts for the brand and actively
post memorable and captivating content. Use instagram, Tiktok and Facebook and create a
website to promote and sell products which has a customer reviews and blog section. Create
giveaways and competitions to boost sales. Work on search engine optimization so that
specific words lead customers to the website. Utilise Google and Facebook adverts to draw
people to the brands page. Create an offline advert that can be posted in newspapers and
around the University.
Long term Promotion Create a blog which can be linked to our website. Interview athletes
and imitate Red Bull’s marketing style where sponsored athletes' lives are investigated and
shared with fans so that the product is advertised in a subtle way. Create an email
campaign and organise a podcast with famous athletes. Take the sweets and sell them at
sporting events such as the Ironman which group members have a personal connection
participating in in July. Work with sporting events and companies to be sponsors, such as at
marathons, rugby games or in the long term, companies such as Nike. Circulate amongst
Brookes university students and sports teams, capturing moments on social media. Set up
the university ambassador scheme where a representative from all major universities
promotes sweets on campus and receives free samples.
4.2 Segmentation, Targeting and Positioning
Segmentation involves identifying the most profitable segments of the market. STP is a
market strategy which divides the market into segments and creates products which appeal
to those segments with customers being the central focus (Goyat, 2011). The segments
generating the most profit are then identified with individuals of the same characteristics,
traits and interests grouped together (Camilleri, 2017).
4.3 Clustering the Market
The psychographic, behavioural, demographic geographic variables were considered to
build customer profiles (Dibb et al., 2016) and from this analysis, three different clusters
emerged (See Appendix 7).
4.3.1 Targeting approach
A differentiated marketing strategy was chosen where a single marketing strategy
will be used to target one segment (Dibb et al., 2016) after carefully considering all
potential customers. Primarily, the market plan will adhere to ‘The high-performance
athlete’ because this segment is the most accessible, profitable, measurable and
distinct (Kolter, 1984). According to IHSA’s statistics (2020) 20-40-year olds are the
most physically active and the most frequent gym goers, indicating a strong potential
customer base.
The high-performance athlete was chosen because athletes struggle to find an
enjoyable energy replenishment to meet exercise demands. With companies
such as SIS and My Protein supplying gels and powders, there is a need for a
more convenient and tasty sweet that will provide energy and aid recovery.
4.4 Positioning
Positioning is a technique used by companies to allow a durable competitive
advantage related to opinions on the product or service (Gwin and Gwin, 2003). This
positioning diagram has been developed, showing how ‘Champ’ differentiates, giving
future customers reasons to purchase (Baines et al., 2019).
5.Operations
In this chapter the operations will be critically evaluated. How do the operations work and
what can give Champs a competitive advantage.
5.1 Transformational Model
By changing inputs into outputs, all companies create their own product or service. They do
this by using a ‘input-transformation-output’ (Slack & Brandon-Jones, 2019 p. 14). The
transformational model is used to describe the operations in detail. This model can be found
in appendix 5.
There are a couple of important steps in this model, however there is one topic which should
be discussed, the quality control. As a small company, it is critical that the product is
outstanding from the beginning. Because reviews from customers are critical for a small
business, this can really give a push to grow (Capoccia, 2018). Therefore Champ will assign
three different staff members to have a role in the quality control. One person will control
what is ordered, one person will control what is delivered and check this, and the last one
controls what is used and if the stock levels are still accurate.
5.2 4 V’s
The 4 V’s model is ideal to see what companies distinguish from each other (Slack &
Brandon-Jones, 2019 p.23). In figure (X) the 4 V’s are applied to Champs.
5.3 Legal Compliance
As a company, there are a lot of laws and regulations to comply with, however as a food
manufacturer there is even more. Champ will hire a legal advisor, so an external person,
because we don’t have this knowledge about laws regarding labour, wages, and food. This
person will focus on the following topics:
- Annual account every year
- Health and safety at work
- Compliance to the Food Standard Agency
- Data protection of the customers
- Contract with suppliers and delivery companies
- Employee regulations
- Intellectual property
5.4 CSR
As seen in the PESTEL analysis, CSR is becoming more important for businesses
(Heyward, 2020). The 17 goals for sustainable development give a good frame of reference.
For this business plan ‘Responsible Consumption and Production’ is the most important
factor from these 17 goals where Champs will contribute (United Nations, 2021). Champs
will therefore have the following policies:
1. The waste will be recycled as much as possible.
2. Our packaging will be made from recycled plastic and cardboard.
3. The logistics will be organised as clustered as possible to limit the amount of pick ups
and deliveries.
6.Human Resources
Our team consists of the six co-founders, a freelance website designer, food
consultant, legal consultant and part time factory worker. As described in the appendix our
six co-founders have strong management skills in their departments and will lead
development of Champ. Below are our employee profiles and company hierarchy.
Function description for our functions as well
Role
Definition
Expectation
A freelance web designer is
a professional who creates
websites. They generate a
page's layout, incorporate
brand specifications and
select visual elements.
We are looking for someone
with experience in building
ecommerce websites.
However we are looking for
a junior designer who’s
salary expectations fit our
budget. They should be
creative and organised and
willing to work within our
timeline. They should be
able to create an efficient
and good looking page
layout so customers can
purchase our products and
navigate the webpage with
ease.
Food consultant
A food consultant will
provide expert analysis,
opinions and
recommendations for the
nutrition part of the product
based on their own
expertise.
We expect the food
consultant to work with us to
create our recipe for our
product, using scientific
knowledge. The product
must be easy to eat, hit the
nutrition requirements and
taste good.
Legal Advisor
A legal advisor supplies
legal support such as
contracts and
documentation.
Contracts with suppliers,
customers, delivery
companies
We expect the legal advisor
to manage the legal side of
the company including
trading law, employment,
health and safety and
contracts. We will expect to
meet three times a year.
Part Time factory worker
A part time factory worker
will work in the factory
The part time factory worker
will help run the machinery
Freelance website designer
helping to run the
machinery.
:
and create the sweets when
we require more assistance.
7. Financial Plan (Akshit)
A financial strategy is a forward-looking and effective tool to examine funding requirements
which are needed to support and achieve organisational objectives, as well as to prepare for
future development and self-sustainability of business (CGMA,2022). We have prepared a
financial plan for one year with a sales forecast, cash flow statement and profit and loss
statement .
Within one year of operation we aim to sell 166,000 units (8 months from operations). One
unit will be sold for 1.5 pounds, bringing our total sales for the first year to 249,000 pounds.
This forecast is based on the number of individuals we can reach. According to our
marketing strategy, we target to reach 1000 individuals per month for the first two months,
and then 5000-10000 people each month after we start paying for social media
advertisements. We hope to convert 10% of reached people into actual sales. According to
our market research, most individuals exercise 4–5 times each week, thus we predict that
the average consumer will purchase 20 servings per month.
Food chemist consultation fees will be a major expenditure for the first three months. From
the fourth month onwards, it will be replaced by the purchase of machinery and salaries.
The following profit model illustrates the return generated by the business. This business is
expected to turn profitable in the first year itself with a small profit of £4360. The cash flow
statement describes how the money will be spent in the first year. It also aids us in
determining the amount of investment required for long-term liquidity. To get the firm off the
ground, we will need £120,000 out of which £60,000 will be invested by the founders and the
other £60,000 will be raised from angel funding or pitching competitions.
In the month of May, just before we finish one year of operations, we aim to reach the
break-even point. Financial ratios are shown in the table below for a better financial
overview.
Gross profit ratio
= (Gross profit/ total sales) x 100
= 57.43%
Net profit ratio
=(Net profit/ total sales) x 100
= 1.75%
Return on investment
= (Net profit/ Amount Invested ) x 100
=3.96%
In the future, we will boost the machine's capacity with additional workers leading to lower
per unit cost of manufacturing. Profit margins will enhance as sales increase, which will be
beneficial to investors relations.
6.1 Sales Forecast
6.2 Profit Model
6.3 Cash Flow Model
6.4 Break Even and 12 months cost
6.5 Contingency Plan
We have created a Gantt chart (refer appendices) to know our targets for each month. This
will allow us to assess deviation and make relevant adjustments in order to accomplish our
set goals.
While making the calculations we have tried to maximise every cost, to avoid an unpredicted
risk. Furthermore, we will establish a contingency reserve for any unanticipated event, which
will be £10,000.
8.Risk Assessment (Maayan)
A risk assessment is an essential process that helps analyse potential and existing hazards
that might affect a business. An organisation must determine an appropriate risk assessment
methodology that takes into account identified events that have the probability to affect the
business and evaluate their consequences (Calder & Watkins, 2007).
In order to provide an extensive risk assessment, a company should create a team
composed of varied elements of the company, depending on the type of the business.
Common roles that should participate are management, engineers, operators, health and
safety professionals and maintenance (Ostrom & Wilhelmsen, 2012).
An analysis of potential risks can be found in appendix 8. Two major risks that might affect
the business were identified with a medium probability and high severity. The first, failing to
reach sales goals which is a risk under the responsibility of the Sales Director. Evaluating
this risk, we decided not to produce more than necessary in order not to have unsold
products that expired and can possibly lead to losing money. Therefore, trying to mitigate
this risk we decided that we will not utilise the full capacity of the machine and will make
products only for a week ahead. Moreover, the production will be performed according to the
actual sales that we will analyse on a weekly basis, and we will make sure that the product’s
marketing strategy is working well.
Another major risk is having a low-quality line of products. The Operation Manager is
responsible for this risk and in order to minimise this risk he will set a high standard of quality
control and standardisation of raw materials. Constantly monitoring the quality of the
products and the materials will help minimise the potential to have defective products.
Workers operating the machine will have to go through training and work in accordance with
an extensive protocol that will be written by Operation Manager. Every production day the
operator of the machine will have to sign once and to confirm that all rules were followed.
It was decided that another analysis of risk assessment will be performed in case of every
change in the company such as a new machine or product. However, if no change is
expected, an analysis will be conducted every six months.
Think about where to add a section of Action Plan
9. Growth and Exit Strategy (Gina)
We are aiming for an organic growth by increasing revenue that is driven by the firm
capabilities in areas such as innovation, marketing, operations, and finance. Organic growth
comes from expanding one’s organization’s output and by engaging in internal activities that
increase revenue. (Vance, 2020) We are going to do this without merging with other
companies.
Organic growth drivers and barriers are going to be identified through a SWOT analysis (see
Appendix 9). (Merson, 2016)
Strengths
1.Internal expansion has the benefit of being low risk. (BBC, n.d.) Without the interference of
stakeholders, we can keep our own values. Higher output means the company may take
advantage of economies of scale and lower average expenses.
2. Use the company’s existing capabilities to pursue a new strategy can enhance
organisational knowledge and learning. (Regner, 2020)
3. Acquisitions typically require an immediate upfront payment for the target company while
organic development allows the spreading of investment over the whole-time span of the
strategy’s development. (Regner, 2020)
4. Organic development allows new activities to be created in the existing cultural
environment, which reduces the risk of culture clash. (Regner, 2020)
Weaknesses
1.Slow growth could a potential weakness of our business. It's possible that there will be a
considerable time between investment and ROI (return on investment) and growth may be
restricted, and it is reliant on the accuracy of sales estimates. (BBC, n.d.).
2. Lower competitive edge. Growing organically should be done at a sustainable pace and at
the same time the competitors need to be overpassed. If they are growing quickly, then
growing too slowly can mean we’ll be quickly overtaken by competitors. (Vance, 2020)
Opportunities
It is very important to follow the customer because customers satisfied with our product
might invite us to service their requirements in another country or industry segment. Their
feedback should be considered very important because it will help us with innovation.
Threats
One of the identified threats of organic growth is that we can become stale in ideas.
(Merson, 2016)
How to overcome it?
-
By plan processes designed to challenge existing thinking
continuously.
-
By incorporating radars that investigate changes in the market &
industry
-
New staff who are debriefed shorty after arrival for any insight they
might have about changes outside
-
By rotating managers/partners through different positions of the
company, so that they remain fresh with ideas.
-
Up or out promotion strategy with new staff. (Maybe too aggressive?)
a tenure or partnership system that dictates when a leader must be
promoted in a hierarchical organization. If a leader is not determined
to be ready for promotion and does not achieve a certain rank within
a certain period, they are removed.
We are developing a new sports candy to cater to the existing market through R&D and
expansion of the businesses’ product range. By having a strong understanding of the
current market, we can provide innovative solutions to meet the needs of the existing
market for further future growth.
How to implement: (Appendix 10)
When it comes to judging growth (Wickham, 2006) has developed several perspectives
respectively being: financial growth, strategic growth, structural growth and organizational
growth. Regarding financial growth, our strategy will be firstly by investing in R&D to develop
new products and that would be measured by an increase in the turnover of the business.
We are also planning to increase our assets (inventory, machineries) so that the value of the
business increases therefore adding value to the stakeholders. By reducing our prices, and
investing in advertising, we would have reduced costs, increased sales, and more income.
Cost innovation through economies of scale is considered by us as another growth strategy
being measured by having an increase in the number of sales together with bottom line
growth measured by an increase on out net income.
In terms of strategic growth, we need to have assets to create sustainable competitive
advantage. Our approach is to acquire the competitor’s product and merging resources to
create a new better product. This would be measured by having good customers reviews,
growing demand, and more sales. Another growth strategy would be responding to customer
request so that we would have on time payments, strong brand awareness, easy innovative
to serve a bigger number of customers. Forming strategic partnership with other firms is
seen a strategic growth perspective and this would be measured our business having
access to our partners distribution channel and brand.
Structural growth refers to changes in the way a company's internal processes are
organised, including managerial roles and duties, reporting relationships, communication
channels, and resource control systems (Wickham, 2006). We aim to have the managers
able to be independent in their work and able to delegate duties and responsibilities so that
we would have a more productive relationship within the business structure. This would be
measured by an increase in employment.
Organisational growth relates to the changes that take place in the organisation’s processes,
culture, and attitudes as it grows and develops. It is also concerned with the changes that
must take place in the entrepreneur’s role and leadership style as the business moves from
being a ‘small’ to a ‘large’ firm. (Wickham, 2006). In order to improve our organisational
culture, we aim to have open minded people and apply an inclusive culture but with no blind
loyalty to colleagues. To grow successfully, the firm will need to become independent of the
founding entrepreneur. A heavy reliance on one person rather than on expandable
assets such as equipment, makes it difficult for the firm to scale its operations (Gilbert,
2005).
Exit strategies
1. Going public through IPO. In this case we would be selling a portion of our
shares to the public but through Direct Listing for cost related reasons. The
corporation pays a commission fee to the underwriter for each share it sells.
The commission ranges from 3 to 7 percent of each share. Following a
successful IPO, a company may pay millions of dollars to the underwriters
who made it possible. Companies who don't have the money — or don't want
to spend it — could choose a direct listing. (Clay, APRIL 01, 2021). Therefore,
the process would be cheaper and faster with time expectancy of 6-9 months.
2. Management buyout. (Hargrave, 2020) suggests that management buyout
(MBO) is a transaction where a company’s management team purchases the
assets and operations of the business, they manage. Negotiations with the
current management team will help us to ensure that management
information stays within the company, allowing for more privacy and
confidentiality.
3. Merge and Acquisition refer to transactions between two companies
combining in some form (CFI, 2022). We are aiming to gain synergistic gains
here in terms of R&D. It is important for us to discover new products because
it would enable Champ to be more profitable and have greater funds.
According to (Pettinger, 2019), there would also be potential economies of
scale related to bulk buying, in this case our first raw ingredients would
enable lower average costs; technical economies would enable us to have
larger production machines and investment is more efficient spread over a
large input; (Appendix 2)
4. Boston Consulting Group (BCG) cash cow. Once Champ has established
itself in the market and it is profitable, it is a good time to be used as a cash
cow. A cash cow is a business or unit that, once it has been paid for, will
produce steady cash flow over its lifespan. (Twin, 2020). Our aim here is to
have the business operating at a minimum maintenance, by retaining
ownership and enjoying the annuity.
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Appendix 1: Competitor overview sports nutrition
10 biggest brands with the biggest market share in % of the total market within sports
nutrition in the United Kingdom, categorised in positioning of the brand.
Brand name
Positioning
2021 market share
Grenade
Fitness
15.9
Myprotien
Fitness
15.4
USN
Fitness
5.3
Maxinutrition
Fitness, endurance
3.4
Bulk Powders
Fitness
3.3
Fulfil
Healthy lifestyle
3.2
Optimum Nutrition
Healthy lifestyle
3.0
SiS
Endurance, all sports
2.5
BSN
Fitness
2.1
PowerBar
All sports
2.1
Appendix 2: Competitor overview endurance
sports nutrition
10 biggest brands with the biggest market share in % of the total market within sports
nutrition in the United Kingdom, only focussed on the brands that are specialised in
endurance sports.
Brand name
Focus
2021 market share in %
Maxinutrition
Fitness, endurance
3.4
SiS
Endurance, all sports
2.5
PowerBar
All sports
2.1
Trek
Endurance, adventure
1.7
Kinetica
Endurance
1.0
High5
Endurance
1.0
Nature Valley
Endurance, adventure
0.8
Clif Bar
Endurance, adventure
0.6
Etixx
Endurance
0.1
Appendix 3: PESTEL analysis
PESTEL
P
Russian invasion in Ukraine. On the 23rd of February 2022 the Russian army invaded
Ukraine (BBC, 2022/a). The western world reacted shocked and on the 27th of February
they decided to cut Russia off from Swift (BBC, 2022/b), this was considered as the biggest
measurement against Russia so far. This can be a big threat to the business, for example if
a crisis starts, prices rise, etc.
United Kingdom leaving the European Union. At the start of 2020, the United Kingdom
left the European Union (The Guardian, 2020). Nobody knew what would happen regarding
the economical situation for the United Kingdom. The beginning was sometimes a struggle
for the UK and EU, however, two years later, the trade policies of the British government
were maturing (The Economist, 2022). Possible threat if the business wants to expand
outside of the UK.
E
Inflation fears hit consumer confidence. Inflation has risen enormously, causing living
costs to rise. This has its toll on consumer confidence, which declined (Nachiappan, 2022).
This can be a threat, people could see this product as a luxury product and might cut their
expenses for products like this.
S
Increasing popularity of cycling due to Covid and the introduction of ‘Gear Change, a
bold vision for cycling and Walking’. The Covid cycling boom was real and increased the
amount of people owning a racing bike enormously. This led to the ‘Gear Change’ plan from
Boris Jonson to improve the cycling infrastructure and invested 2 billion pounds to make the
UK a real cycling country (Kingdom of The Netherlands, 2021). Huge opportunity for the
business as our target group is growing.
T
Growing opportunities of e-commerce. Especially in the last few years e-commerce has
been responsible for a much bigger percentage of the total revenue in almost every sector
(Clark et al., 2018). Very important information, since our main sales channel will be our
website.
E
The UK government wants to eliminate avoidable plastic in 2042. The Government’s
£30 million investment targets innovative projects to create packaging that can be refilled,
more easily recycled, and made of materials that are far more sustainable for the
environment (Moore, 2022). Meaning that we have to take this in account as well.
The growing importance of social responsibility in business. Corporate social
responsibility (CSR) is a growing factor in business, customers expect nowadays that
companies contribute to the local communitie and have a positive impact to the
environment, or at least show that they care (Heyward, 2020). This is important information
for the business, because it shows the urgency of CSR.
L
Comply to the Food Standard Agency requirements to set up a food business. In
order to set up a our factory to create the candy, we will have to conform to the regulations
from the Food Standards Agency of the UK government (FoodStandardsAgency, 2018).
Appendix 4: Value Proposition
Champ is a high performance sport candy that helps athletes get the nutrition they need
before, and during sport in a tasty, exciting candy. Unlike existing products Champ is
delicious, easy to eat and accessible. Our community of athletes on social media and
ambassadors at local clubs help bring our product to others and develop strong customer
loyalty. Our product isn’t just candy, it helps our customers do what they love longer, better,
stronger.
Appendix 5: Business Model Canvas
Key Partners
Our key partners will help us build the brand and community that helps make Champ
special. Our production will be managed in our facility to give us higher quality control, and
flexibility. Essential to this process is our food consultant, with constant communication we
will continue updating our product from customer feedback. Furthermore our partner
athletes and brand ambassadors will be integral in facilitating the relationships between the
brand and customers to develop our Champ community. Partner athletes will come from a
range of endurance sports and promote our product on their social media and through
events. Brand ambassadors will be members of local sport clubs that will connect
customers with our product through word of mouth, and social media. These relationships
will aid us in creating a connected community from production to customers.
Key Activities
The development of our recipe and community will guide our key activities. Research and
development of the product is an ongoing process aimed at increasing sales and
strengthening customer relationships. Our continual development will be aided by our in
house production. This activity will be carried out in our facility and flexible to customer
needs. Fostering our community will guide our marketing and sales teams to build the
relationships with customers that will make them lifelong users of Champ. Making our
product accessible and enjoyable will be an integral function.
Key Resources
Our key resources will fall into four categories: physical, financial, human and IT systems.
As listed in the chart above among these four categories include the resources for
production, delivery, administration and sales. Essential to these activities are the facilities
for production, our website for sales, offices and training for employees, and intellectual
property of our recipe.
Customer Relationships
Our customers are the core Champ’s mission. We aim to create a product that meets the
needs of our customers through an easy to eat, delicious and accessible candy. The core
function of our business is to deliver a product that will aid performance and recovery.
Secondary is our community of athletes. We want to bring together different athletes
celebrating sport and achievement in our community of customers. Our candy will help
athletes work stronger and longer, celebrating success in sport with the community of
Champ users. Brand ambassadors who are members of local sport clubs will help us
facilitate these community relationships by connecting our brand with individuals. Our
athlete partnerships will help create greater visibility for our product and connect customers
to other sporting people.
Channels
Our main channels will be online through social media and our website. We will sell directly
to customers through our online shop. Other selling channels include through our brand
representatives at events or sporting clubs. Marketing will be done primarily through social
media with other channels including brand ambassadors and partner athletes.
Appendix 6: Transformational Model
Input
Champs Transformational Model
Output
Appendix 7: Customer Segment
4.3.1 Customer Profiles
High Performance athlete
-Age range 18-30 year-olds
-Men and women
-Students, part time workers and full time athletes
- Urban, living in a shared home
- Low to high income depending on status
- Life stage: live away from home, independently
- Strong desire for success, want to train as much as possible. Life fits around their sport
rather than sport fitting around their life
- Limited time and busy schedules
- Need for quick and easy meals
- Interest in sport specific improvement, nutrition and sports science
- Minimal disposable income but lives comfortably
Average Working Class
Age Range 25-40
Man and Woman
Occupation: Full time work, parent
Suburban and rural
Mid - high income, have disposable income
Average income: 30-100k p/y
Has a family of their own
Busy life, always thinking of others and balancing work with family life
Always rushing meals and lacks energy
Survives off coffee and sugar to get through the day
- Casual exerciser and occasional gym goer for improved self esteem, likes a group
fitness class and a dog walk but gym is not the priority
- Interest in health, fitness and wellbeing and eats a balanced diet
Adrenaline Junkie
- Age Range: 16-28
Mostly men. Lives Urban/rural
Low – middle incomes. Adventurous lifestyle
Life stage: Living in short term rentals or with parents
Prepared to take risks and thrill seeking
Loves a challenge. Likes to master skills, always high on life. Lives off caffeine.
Appendix 8: Risk Assessment Matrix
●
It’s ready, I’ll add it on Tuesday (I cannot change the orientation to be landscape)
Appendix 9
Growth Strategies and how can they be measured
Appendix 10
Average production costs of small firms versus mergers
Source: (Pettinger, 2019)
Two smaller firms producing Q1 would have average costs of P1. A merger which
led to a firm producing at Q2 would have lower average costs of P2.