D-Bamboo

Report
Redhawks Consulting
D-Bamboo Home & Garden Shop
Key Concern
• To ensure the long-term survival of
D-Bamboo Home and Garden Shop
PESTEL Analysis
Political
• 3 Branches of Government: Executive, Legislative, Judicial
• Parliamentary democracy
• Political pressure from Jamaat-al Muslimeen
Economic
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Turbulent economic climate
Excellent investment site for international business
Growth Rate: 5.5%
GDP Per Capita: $18,300 USD
Public debt: 26.6% GDP
Inflation:
Social
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Population: 1.3 million
Literacy rate: 98.6%
Cultures: African 40%, Indian 40%, European Chinese, Middle Eastern
Religions: Catholic 26%, Hindu 22.5%, 9 others each at approximately 10% or lower
Languages: English, Caribbean, Hindustani, French, Spanish, Chinese
Crime rate: Steadily increasing over past 3 years
Technological
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Internet usage: 163,000 people
Cell phones: 1,655,000
Televisions: 425,000
Radio: 680,000
Ecological
• Climate: Tropical with Rain season June-December
• Natural Resources: Petroleum, Natural Gas, Asphalt
• Current issues: Water and oil pollution, deforestation, soil erosion
Legal
• Under English Common law
• Licensing required for importing plants and seedlings
Porter’s 5 Forces
New Entrants
• Rumor of new company entering market
Suppliers
• Customers turn into
suppliers
• Several local suppliers
are used
• Large network of
suppliers
Buyers
Industry Competitors
• New shop 1 km away
• New shop entering shopping mall
• Larger competitors offer similar
products
• Equipment from larger
hardware retailers
Substitutes
• Self-grown
•Home gardens
• Willingness to travel
significant distances
• 60% Working women
• 15% Retirees
• 10% Expatriate workers
• 10% Teenagers
• 5% Farmers
SWOT Analysis
Strengths
Weaknesses
• Large product line
• Expansion of car park decreased plants
available for sale
• Limited promotion
• Lack of proper signage
• Shop not clearly visible to motorists
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Offers unique and exotic plants
Loyal customer base
Extended hours of operation
Located in a high traffic area of town
Excellent bookkeeping practices
Opportunities
Threats
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•
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•
• Nearby shop opening offering similar
pricing
• Turbulent economic state of Trinidad
• Competitors beginning to supply similar
items
Provide plant rental service
Relocation
Increase pricing
Partnering with local science teachers
Better control supply chain
Provide landscaping service
Customer incentive program
Marketing Mix
Product
Place
- Medium- to low-end plants
- Located in heavily traffic area
- Gardening supplies
- Recessed angle of building
- Ornamental flowers
- Across the street from popular gas station
- Plant and vegetable seedlings
- Main highway 200 meters from shop
- Bonsai, turtles, aquariums
Consumer
60% Working women
15% Retirees
10% Expatriate workers
10% Teenagers
5% Farmers
Pricing
- 100% markup on plants < $20
- 50% markup on plants > $20
- 50% markup on shop items
- 35% markup on items > $150
Promotion
- Flyer distribution for grand opening and special events
- Plant and balloon giveaways
- 30% discount on seedlings
- No outdoor sign
- Posters on roadside wall periodically
Monthly Sales & Expenses
2007
Sales
Revenue
Expenses
2008
2009
Sales
Revenue
Expenses
Sales
Revenue
Expenses
January
$19,870
$10,531
$37,730
$20,752
June
$34,945
$18,521
$43,475
$23,911
August
$25,650
$13,595
$22,910
$12,601
October
$34,865
$17,781
$36,235
$19,205
$21,820
$12,001
December
$79,945
$47,967
$88,290
$54,740
$65,000*
$35,750*
Note: Amounts are in Trinidad and Tobago dollars
* Projections for December 2009 by D-Bamboo owner.
Estimated Financials
2008
2009
Sales Revenue
$491,000
$458,000
Expense
$280,000
$252,000
Profit from Operating
$211,000
$206,000
Note: Amounts are in Trinidad and Tobago dollars
Identification of Alternatives
1.
2.
3.
4.
5.
6.
7.
8.
Relocation
Major IMC
Limited IMC
Providing additional services
Price increase
Retreat
Stay the same
Customer Incentive
Alternative 1:
Relocation
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$80,000 Initial Cost
Depreciated over 10 years = $8,000
$5,000 annually
20% increase
$81,000 per year
Alternative 2:
Major IMC
• $40,000 Expense
• 40% (Conservative)
• $189,600 per year
Alternative 3:
Limited IMC
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Three times current expense
$2,250 Expense
7.5% (Average)
$33,338 per year
Alternative 4:
Additional Services
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$100,000 Total Expenses
35% Markup on high prices
$135,000 Revenue
$35,000 per year
Alternative 5:
Price Increase
• 7.5% Decrease sales volume
• 5% Sales increase
• ($12,582)
Alternative 6:
Retreat
• Decreasing equity
• Potential for growth
• Not feasible
Alternative 7:
Stay the Same
• Decreasing profits
• Not feasible
Alternative 8:
Customer Incentive
• $47,000 Discounts paid
• $51,700 Additional revenue
• $4,700 per year
Feasibility
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•
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Relocation
Major IMC
Limited IMC
Providing additional services
Price increase
Retreat
Stay the same
Customer Incentive
Weighted Average Competitive
Strength Analysis
Relocation
Major IMC
Limited IMC
Additional Services
Customer Incentive
Profitability
0.4
3
1.2
3
1.2
1
0.4
1
0.4
1
0.4
Brand Image
Customer
Loyalty
0.3
3
0.9
3
0.9
2
0.6
2
0.6
2
0.6
0.1
1
0.1
2
0.2
2
0.2
2
0.2
3
0.3
Accessibility
0.2
3
0.6
1
0.2
1
0.2
2
0.4
1
0.2
1
2.8
2.5
1.4
1.6
1.5
Budget
• $55,000 Cash Reserve
• $110,000 Credit Available
• $30,000 Cash
• $70,000 Credit
Recommendations
Relocation
Major IMC
Limited IMC
Additional Services
Customer Incentive
Score
2.8
2.5
1.4
1.6
1.5
Rank
1
2
5
3
4
85,000
40,000
2,250
25,000
5,000
Direct Cost
Available
Yes
No
Yes
No
Yes
Phases of Implementation
I. Customer Incentive Program
II. Relocation
III. Integrated Marketing and
Communications Campaign
IV. Milestone Review
V. Long-term Planning
Phase I:
Customer Incentive Program
• Time Frame: Upon approval of plan
• For every $100 spent
– 10% discount on next purchase
– Encourages return of customer
Phase II:
Relocation
• Time frame: 0-12 months
• Ideal location:
– Close to the current location
– Availability of a green house
– Easily seen from street
– New sign installation
Phase III:
Limited Integrated Marketing &
Communications
• Time frame: The move - Ongoing
• Use of Flyers and posters
• Internet exposure
– Increase in technology
– Use social media
Phase IV:
Milestone Review
• Time Frame: 12 months - Ongoing
• Periodic Reviews
– 3-6 month intervals
• Criteria
– Customer Satisfaction
– Owner Perception
– Profitability
Phase V:
Long-Term Planning
• Time Frame: 5 years +
• Expansions as Budget allows
– More extensive Marketing
– Additional Services:
• Commercial Landscaping
• Science/Biology Education
Timeline
Months
Phase I: Customer
Incentive Program
Phase II: Relocation
Phase III: IMC
Campaign
Phase IV: Milestone
Review
Phase V: Long-term
Planning
0
3
6
9
12
+
Spending Summary
Move
Customer Incentive
Limited IMC
Reserve
Total:
85,000.00
5,000.00
2,250.00
7,750.00
100,000.00
Revenue Summary
Move
Customer Incentive
Limited IMC
Total:
81,900.00
4,700.00
33,338.00
119,938.00
Redhawks Consulting
D-Bamboo Home & Garden Shop

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