BUS302 ENTREPRENEURSHIP T217
Executive Summary
The main aim of this paper is to develop the business proposal for establishing a new company in Australia called Universal Social Media Solution. The company will offer social media marketing services in the Australian market. It is found that the target market of the company will be Australian companies that are involving in this kind of marketing. In this, it is also identified that the social media marketing industry contains moderate opportunities for the firm. Due to this, the company will take the help of the marketing mix that will help to make awareness of the product in the market. At the same time, it is also found that $100,000 is starting budget of the company. The company can face the issue of changing the marketing trend in the business environment.
Background
Increasing the completion level in the current market has become a critical aspect for the companies to conduct the marketing. In the current business environment, all companies are serious about the new aspect of the marking. It provides lots of opportunities and benefits in the context of increasing the customer base (Alihodzic, 2013). In the same concern of this, Universal Social Media Solution (USMS) as the social media consultancy will be developed to provide service in Australia. The main aim of the company is to provide consultancy services to companies that are involving in social media marketing. The company will provide assistance on the different channels and tools of social media marketing. The company will also be aimed to get a significant market share and offer effective consultant service. In the current business environment, social media marking has become a significant part of the marketing strategy of a company. It helps the companies to maintain a positive, authentic, presence across their social channels (Aylward, 2014). The involvement in social media marketing enables the companies to target a big market in a single time.
Mission
The mission statement of the company is below:
Spreading the Power of the Social Media Marketing
The mission statement of USMS states that the company wants to provide excellent customer service in social media marketing. In this, it helps the client to conduct effective social medial marketing.
Service offering
USMS will provide a full range of services in the social media industry. The main services of the company will provide assistance on social media marketing. In this company will assist on the different popular topics such as social media marketing, digital marketing, content marketing, B2B social media, social media advisement, social media measurement, social media monitoring and social customer service (Cameron & Quinn, 2011).
Along with this, the company will also provide a blog content creation service. In this, the company will offer content services to its clines. For each service, there will be a different expert in the company. It will be helpful to achieve the level of excellence.
Market analysis
Market analysis is a significant aspect of the business proposal because it helps the business owners to alternative their business strategies accoutring to the need of the business environment. Australia is a developed country that is one of the largest mixed markets economic in the world. The total GDP of Australia is AUD$1.69 trillion as of 2017. In the context of the income per capita, Australia is the second country after Switzerland (Chapman, 2011). The business operation in Australia will provide lots of opportunities to USMS. The market of Australia can be understood by PEST analysis that is below:
The below are some opportunities that can be adopted by USMS:
- The high income per capita
- Freedom of regulatory for the new business investment companies
- Low rate of inflation in the recent years
- Rapidly increasing the trend of the social media marketing
- 61% contribution of the service industry in the Australian economic
- Developed infrastructure
- Resources and energy are developed to the great extent
- Availability of the advanced technology
The above points determine that there are lots of business opportunities in Australia. By adopting these opportunities, USMS can get high profits in the Australian market. The above aspects also depict that USMS has an immense chance in the market of Australia for social media services providers and consultants (Ferrell, 2012).
Industry analysis
Social media marketing has become a leading industry in the current business environment. Its main cause is that nowadays, 60% of participants use social media marketing that shows the company can get a good profit from this industry. In order to analyse the social media marketing industry, Porter’s five forces analysis is conducted (Gido Clements, 2014). It analyses the industry on the basis of five forces of the industry which findings are discussed below.
Competitive Rivalry: The force in the analysis measure the number of the companies industry and find out the level of the competition in the industry. In the context of the social media marketing industry, it is found that their completion is increasing from moderate to high (Gorgenlnder, 2011). It means that companies are rapidly increasing in this field.
Supplier Power: This force in the analysis depicts how much easy for the supplier to increase their price. By analysing the social media industry, it is identified that the power of the supplier in this industry is low. The role of suppliers is less in this industry that is why they are not able to affect the industry.
Buyer Power: In industry, the power of buyers shows their strength to drive price in the market. In reference to the social media marketing industry, it is found that the power of the buyer is moderate because there are lots of companies that are providing social media marketing services (Jackson, et. al. 2011).
The Threat of Substitution: The threat of substitution indicates the different way of doing what you do. In this, it is found that there are lots of ways of doing marking such as advertisement, digital marketing, content marketing etc but the cost and effectiveness of these ways are not effective. Due to this, it can be said that threat of substitutes is moderate (Pride, et al. 2013).
The threat of New Entry: The threat of new entry shows the ability of companies to entering the market. In this context, it is analysed that threat of new entry is moderate because to make the customer is based in this industry is not an easy task.
| The social media marketing industry | Intensity |
| Competitive Rivalry | Moderate To High |
| Supplier Power | Low |
| Buyer Power | Moderate |
| Threat of Substitution | Moderate |
| The threat of New Entry | Moderate |
From the above analysis, it can be concluded that doing business in the social media marketing industry is not easy because the completion and power of buyers are moderate.
Competition
There is high competition in the social media industry in Australia due to several social media providers. The organization need to develop effective social media for the public. The most powerful social media providers in Australia are Bruce Clay, Newpath WEB, DGM Australia, etc. More than 60% of the population of Australia is regularly using social media. In the current scenario, most internet users are registered on different social media. The competitors are providing different facilities in social media like communication, chatting, uploading pictures, videos and messages to the subscribers. The market shares of the competitors are high because of the past strategies (Ananda et al., 2014). The main strength of the competitors is providing fast speed data sending process but it consumes the high data. The company can focus on the low data for sending the message or images. The Australian market for social media is very good and the company can use the opportunity of providing new technology in social media. The social media service can be covered by providing the effective technology in social media application and website both. The above analysis provides the effectiveness in the service of the competitor.
Quality
High
DGM Australia
Newpath WEB USES
Price
low high
low
Primary Target market
The company will target the market for the USMS services by segmenting and positioning their services into the minds of customers. The market for the USMS services is segmented on the basis of geographical and behavioural segmentation. Under the geographic segmentation, USMS services will focus on the Australian market for imparting their social networking services (Jung & Park, 2014). While, USMS in case of behavioural, it segments the Australia market on the basis of perceived value, benefit or advantage that consumer perceives from the services. Thus, through this segmentation, it becomes easy for the USMS services to identify their target clients under the country of Australia. While USMS position their services through using quality and features.
| Segmentation Strategy | USMS segments the markets on the basis of Geographical and behavioural segmentation. |
| Targeting Strategy | It targets the Australian market by offering the Universal Social Media Solution (USMS) to the local clients of Australia (Pedersen et al., 2014). |
| Positioning strategy | It positions the services based on the quality and features of services. |
It can be stated that the USMS targeted the Australian clients by providing them the quality services in the form of promoting the company effectively in the digital platform. For targeting the market, USMS could follow the undifferentiated targeting strategy in order to appeal and attract the Australian clients in order to avail their services. However, USMS focuses on the needs and requirements of the clients in order to make changes in the services accordingly. Thus, such practices help in perceiving the quality services by the clients (Ananda et al., 2014). Hence in regards to this, USMS to enter into the Australian market focused on the geographical and benefits strategy for segmenting the market of Australia.
Marketing
- a) Product: USMS will offer a wide range of services in the social media industry. The main service consultancy provides to the company is assistance with social media marketing. It means that consultancy could assist companies related to how to promote the particular company on social sites and digital platforms (Wymer et al., 2010). Likewise, consultancy offers multiple services under the USMS and these are social media marketing, digital marketing, content marketing, B2B social media, social media advisement, social media measurement, social media monitoring and social customer service.
- b) Pricing: USMS adopt the competitor pricing strategy in which the company provide the best social media solution to the Australian clients at the competitors’ price. Under this, the company for their services charge the price as per the competitors’ product price as it helps the clients to attract the maximum customers. The major benefit achieves from this strategy is that company could achieve a larger customer base and be able to retain them for a longer time duration.
- c) Distribution: The distribution place of USMS will be the Australian market where ideal locations will select in order to open the consultancy office so that clients could easily find the place and avail the services. In order to attract the maximum clients, the consultancy will use an effective distribution channel so that services could be providing in a reliable manner (Kim & Hyun 2011). Besides that, the consultancy also focuses on the competitor’s distribution channel in order to bring improvements in the delivery of their own service pattern.
- d) Promotion: Consultancy could promote their services through using the print and broadcast media in the Australian market. The consultancy will use magazines, hoarding and television to promote their services to the target audiences (Gordon, 2012). At the same time, consultancy can use the digital platform for promoting their services to larger audiences as the trend of digital sites is growing day by day. Thus, such a promotion strategy will provide support to the consultancy to get high recognition in the Australian market.
Financial plan
In any business proposal financial plan is an important activity that is associated with the financial objective of the company. The main objective of preparing the financial plan is to develop an understanding of the financial activities. A financial plan is also essential to know the availability of cash in different aspects. However, the financial plan includes a budget that determines that how much the company will spend on the different elements of the budget. It also determines the actual need for the capital that helps the business owner to manage the fund. It is also helpful to develop the financial policies for the company (Radwan & Pellegrini, 2010). USMS is going to start the business in the social media service sector so the company will need money for the completion of the different tasks. The following tables show the financial budget and balance sheet for USMS.
| Start-up Expenses | Cost (in AUD) |
| Website | 40000 |
| Office and furniture | 20000 |
| Advertisement | 30000 |
| Insurance | 15000 |
| Stationary Expenses | 1000 |
| Promotion Equipment | 52000 |
| Computers and IT equipment | 42000 |
| Total Start-Up Expenses | 200000 |
| Balance sheet | ||
| Particular | 1st year | 2nd year |
| Assets | ||
| Current assets | ||
| Cash | 200000 | 224000 |
| Other current assets | 50000 | 56000 |
| Total current assets | 250000 | 280000 |
| Fixed assets | 0 | |
| Plant | 5000000 | 5600000 |
| Delivery vans | 30000 | 33600 |
| Furniture equipment | 1350000 | 1512000 |
| Accumulated depreciation | 150000 | 168000 |
| Total Fixed assets | 6530000 | 7313600 |
| Total assets | 6780000 | 7593600 |
| Liabilities | ||
| Current liabilities | 200000 | 224000 |
| Current borrowing | 200000 | 224000 |
| Account payable | 25000 | 28000 |
| Total Current Liabilities | 425000 | 476000 |
| Bank loan | 1200000 | 1344000 |
| Total noncurrent liabilities | 2550000 | 2856000 |
| Total liabilities | 4175000 | 4676000 |
| Owner’s equity | 2000000 | 2240000 |
| Retained earnings total equity | 605000 | 677600 |
| Total liabilities and equity | 6780000 | 7593600 |
Critical risks
There are various critical risks that could arise in the successful implementation of services in the Australian market. These can be the changing market trends as it influences the target market behaviour and attitudes towards the purchasing decision. Besides that, investing time, money and resources for the implementation of the services is also considered critical to the success. The risks which exist to the success of the company could be the customer, product design, development, promotion, sales and customer services (Mintz & Currim, 2013). Therefore, these are the key risk that will affect the consultancy to successfully deliver to the Australian clients. Other than that, an ineffective distribution channel would also be a critical risk for the consultancy as inefficiency in any element of the marketing mix could have deep influences on the quality of services. Likewise, in case the company did not have an effective distribution channel then they didn’t provide the quality in their offering.
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