Free Custom «Business Startup Incubator Report» Essay Sample
Table of Contents
- 1. The Market
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- 2. Market Research
- Consumers’ Problems
- Market Segmentation
- Market Trend
- SWOT Analysis
- 3. Marketing Strategy
- 4. Competitors’ Analysis
- A List of Competitors
- Competitors’ Product Summary
- Competitors’ Strengths and Weaknesses
- Competitors’ Strategies and Objectives
- Quality Control
- Market Outlook
- 5. Operation and Logistics
- 6. Cost and Pricing Strategy
- Related Free Business Essays
Many offices and homes in Ireland seek the services of a professional cleaning company. Due to the high demand in the market, the services’ providers have not been able to meet the demand. Therefore, they recourse to charging a high fee for their services and products. The market for these products and services is predicted to expand due to the increase in population and the rise of awareness about the need for professional cleaners to carry out cleaning work. In addition, the economy of the country and the world is stabilizing; hence, the number of people who need quality cleaning services is increasing. Providing cleaning services for businesses and homes is a business idea that has been identified after a wide market research. The following research will examine the products and services, market, market research, marketing strategy, competitor analysis, and cost and pricing strategy. Other matters, such as legalization and funding of the business idea, will be explained. The project will explain why this is a viable business opportunity that needs to be funded.
1. The Market
The market for the cleaning service in Ireland is wide (Mccarthy 2012, p.3). For example, businesses, offices, and homes all require this service from a professional provider. Therefore, the demand for quality cleaning services is increasing, especially in the local market. Some of the major consumers of this service are learning institutions, hospitals, government offices, just to mention a few. However, due to the increased demand for high quality and unique services, the market has not been completely exploited. The following business will target the local consumers and national market. However, if the sale of the services increases, the business will enter the international market.
There are other businesses that are providing similar services similar to the business that is being proposed for funding. Therefore, the market provokes perfect competition whereby there are many consumers and sellers (Mccarthy 2012, p.8). The business is expected to face competition from other established businesses, but it will offer unique services at competitive prices thus attracting new customers. On the other hand, it will first start providing the services from the local market targeting the college staffs, students and institutions. The local market also includes businesses that are within the boundaries of Dublin. The business will later expand to the national market level. This step will be made after understanding the need of the local community because it will be easier to provide the similar service on the national market. Therefore, the local and national markets constitute the potential customers for the business.
2. Market Research
The market research for this business startup incubator report involved collecting critical information about the market in order to find out whether there is a demand for this kind of services on the market. The information gathered will be important for making wise and profitable decisions while operating the business. The research also involved two different types of data:
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Secondary information: comprises the data about the market for the cleaning businesses in Ireland and across the world that have been already compiled. The information includes reports, trade association, government agencies and other businesses in this sector (Mooi & Sarstedt 2011, p.13)
Primary information: comprises the research conducted by means of interviewing both the local and the national communities. In addition, questionnaires were used to get critical information about the local market.
The market research also involved several factors as explained below.
These are the challenges that the consumers face, such as low quality, price, just to mention a few (Beall 2010,p 5). From the market research, it has become possible to identify different consumer problems in both the local and national markets. The first problem that consumers face is the price that is being charged by businesses providing the cleaning services. Most of the reliable companies charge high fees for their services, and consumers feel that they are being exploited. However, this is the best business opportunity because the fee that the business is planning to set for its cleaning services will be competitive. Another problem that consumers experience is the quality of the services that are offered by the service providers. Most clients are not satisfied because they feel that these companies still have much to do in order to be competitive even in the international market.
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Reliability is another problem that consumers face when it comes to hiring a cleaning service provider. Sometimes, the consumers might need these services urgently, but most of the providers cannot meet their clients’ needs urgently. Some consumers claimed that they have experienced a delay for up to two days.
The market research also involved market segmentation. Market segmentation helps a business to speak directly to the consumers (Wedel & Kamakura 2009,p 14). At this point, different groups of service consumers have been identified. In such a way, the company will be able to target the specific needs of different groups in the market. Understanding the marketing segmentation is important for the proposed business to have a bigger market share thus become profitable.
The market research also involved understanding the market trend for the cleaning business. The market trend is the upward and downward movement of the market during a certain period (Wang 2010, p.5). For this proposal, the demand for the cleaning services has increased in the last five years. Major contributions include the improved economy and the increase in the number of new businesses that are created annually.
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From the market research, it is possible to identify the strengths, weaknesses, opportunities and the threats of a business (Böhm 2009,p.12). In the proposed business idea, the strength of the business is that the team that is coming with the proposal is ready to work for 24/7 to meet the high demand for the services. The consumers will enjoy a competitive price for the services that will be offered. The business is also expected to use modern equipment; therefore, the level of cleaning services that will be offered will be high. Another strength that the business is expected to have is a strong financial statement. Students who have introduced this proposal have degrees in business and economics. Therefore, they have the potential of keeping solid financial statements. Hence, it is expected that the company will have the competitive edge over its close competitors when it comes to book-keeping.
Weaknesses for the proposed business include lack of adequate financial resources to expand to target national consumers. The business is also expected to face stiff competition from the businesses that were established a long time ago. Some of these businesses have loyal clients, and they have the financial muscle to apply the latest technology. They also have enough resources to hire a team of well-qualified and highly experienced staff. Therefore, they might take advantage of this since; they understand the market better than the new businesses that are formed.
There are several opportunities for this business startup incubator. Once the competition for this service is high, therefore, the demand for the cleaning service is high, as well. Many businesses that are available locally are not able to meet the demands of the existing clients, such as the quality of the services provided, availability and the price. Therefore, this can be a great opportunity for the company if it takes the advantages of these market gaps.
The business is also expected to face some threats in the market. Among the greatest threats, there is the possibility of another large business entering the market. The business might have the capacity to offer the cleaning services at a lower price than that of the proposed business. Change in the customers’ preferences can also be a possible threat to the business (Pahl & Richter 2009, p.20). The customers might change preferences due to the change of technology. Government regulations can also be a possible threat. If the government starts regulating the business in terms of price floor and price ceiling, it can affect the operation of the business.
3. Marketing Strategy
An effective marketing strategy helps a business to determine how the products and the services would be delivered to the consumers (Roger 2010,p. 25). Therefore, it is important to develop special tactics to reach the potential consumers. One tactic that will be used is the marketing mix that involves the following:
- High technology will be used when delivering the services. Therefore, the quality of the service will be high. The price will also be competitive.
- The production will be promoted through social media, TV, newspapers and many other advertisement channels.
- The company will have a team of experts who will manage and market the business to have a great market share.
4. Competitors’ Analysis
It is important for a business startup to conduct competitors’ analysis before starting to operate. Competitors’ analysis involves identifying the weaknesses and strengths of the competitors (Oster 1999, p.32). The competitors’ analysis was done after conducting a market research about the close competitors of this business. The information about competitors was obtained from investigation and research of their pricing technique, pricing of their services and the way they make promotions. The information about the competitors was received from the conferences, seminars and trade shows. Several factors about the competitors were identified and explained below after the analysis.
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A List of Competitors
There are several businesses that are providing cleaning services in the local market. Most of these companies do not provide their services on the 24/7 basis. However, there are also other small scale businesses that offer the cleaning services in Dublin. Most of these businesses comprise sole trade where they are owned and operated by the owners. Small scale cleaning businesses target small consumers, and most of their clients are homeowners. On the other hand, well-established businesses target large consumers, such as learning institutions, companies, hospitals, among others. There are other companies that are expected to open shops in the near future. Most of the businesses that are planning to provide cleaning services are sole traders. From the list of competitors, the businesses that are expected to offer stiff competition to the current startup are the large companies that have already been established. The reason for this is the fact that they have studied the market well and understand their customers’ demands. In addition, they have acquired a large market share, and they have numerous loyal customers.
Competitors’ Product Summary
Small companies that provide cleaning services target the consumers locally while large organizations target local, national and international consumers (Corcoran & Share 2008, p.30). Large scale businesses advertise their services through the newspapers, television, radio, social media, among others. In addition, they have a large team of professional cleaners, but they are unable to meet the demands of the clients. Due to the high demand for their services from large organizations, they tend to charge a high fee for the services they provide. On the other hand, small businesses that provide cleaning services are managed by a few people. They do not hire well-trained professional cleaners because they do not have enough resources. In addition, they mostly do their advertisements through the social media, posters and the word of mouth.
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Competitors’ Strengths and Weaknesses
From the competitors’ analysis, it was possible to find out the strengths and the weaknesses of the potential competitors in the market. Among the strengths of the competitors, there is wide knowledge and understanding the local market. Since they have been in the businesses for long time, a few have mastered the needs of their existent and potential clients. Therefore, they have a well-established market for their services. Large organizations have financial muscles to hire experienced staff to provide the services (Organization for Economic Co-operation and Development 2008).
There are several weaknesses that cleaning services are facing. Among them, there is the inability to satisfy their clients. Customers are complaining that most service providers are unable to meet their needs. For example, they respond slowly even after they are called to provide services in case of emergency. The customers are also complaining about the quality of services that the cleaners are offering. It is evident that local cleaning businesses are unable to satisfy their clients in terms of quality of the services that they offer. Small scale businesses are not in the position to use the modern equipment due to the financial constraints. They also charge high prices for their services. Since the local market has been dominated by the small scale businesses, they have not exploited the market completely. There are many large organizations that require large scale cleaning services, but these small scale businesses cannot meet their needs. Some of the local service providers also use outdated means of advertisement, such as word of mouth and posters (Organization for Economic Co-operation and Development 2008). In addition, such companies do not have sound financial statements.
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Competitors’ Strategies and Objectives
One of the main goals of the competitors is to increase the market share (Porter 2008, p.35). To achieve this, they introduce a number of marketing tactics. Some are planning to invest heavily in the press releases and advertisement in order to have a bigger market share. Small scale businesses are likely to expand their market shares by reducing the fee they charge for their services in order to widen the market.
The major objective of the competitors is to increase profits. Large and small cleaning businesses have taken different steps that can help them increase their profits. Among them, there are the attempts to reduce the operation cost. Sourcing their machines from lower-cost suppliers is another way that these businesses are planning to do thus reducing the direct cost of acquiring the assets. Some of the large-scale service providers are planning to restructuring jobs in order to eliminate inefficiency and reduce the salary expenses.
Another strategy that the competitors are using or planning to use is the effective quality control (Porter 2008, p.11). Their aim is to reduce the operation costs. Large businesses are also planning to improve their job training programs for their staff in order to reduce costly employee errors. Therefore, they will be conducting training sessions for their staff at least once per year in addition to recruiting new employees. Moreover, some companies reward the employees who meet their quality standards in order to reduce employee errors.
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Large businesses are also finding new suppliers to improve the quality of cleaning machines that they are buying. They have adopted strict standards for quality of all assets that they order, and ensured that their supplies can consistently meet their requirements before they make a purchase.
The Market outlook is another factor that was considered when analyzing the competitors. The market for the services that will be first limited to the local one, and then the services will be expanded nationally. The demand for cleaning services is increasing as many businesses are opening shops in Dublin (Open 2010). Therefore, the demand for the services is high and will improve in future if the economy continues to stabilize.
5. Operation and Logistics
In regard with operations and logistics, the business aims to offer quality services that will be distributed to their clients within the appropriate time, which will make the organization work efficiently. In order to meet this objective, the process will involve the design, implementation and management of systems in order to deploy the physical facilities, personnel, and finished services. The process will cover the whole supply chain from the place where the assets were purchased to the point where the services will be offered to customers. To achieve this, the business management will be proficient in the use of the qualitative model and computers in order to communicate effectively. The operations and logistics will help the business achieve its goals. The process will cover the following:
- Supply: It will consider the supply of materials that will be required to offer the cleaning services from the suppliers.
- Facilities: The company will employ different facilities to meet its needs. The facilities will help the company to offer quality services to their clients at an affordable rate.
- Troubleshooting capabilities: The logistic managements will be in a position to handle complications that may arise in the day-to-day running of the business. If the clients need the emergency cleaning service, the business will be in a position to meet this demand.
- Keeping the clients informed: The customers also have the right to know when the services will be offered. They should be informed when the work will be done and how long it will take to complete it. Therefore, the logistic management will provide the customers with direct contact number in order to avoid blaming each other in case a problem arises.
6. Cost and Pricing Strategy
The business will also focus on how the pricing for the services. First, the overall cost of service production will be included in the final fee charged. It includes the cost of buying new materials, paying workers, advertisement, rent, and electricity, among others. The firm will then consider the percentage of profit that it would want to make. However, in order to be attractive on the market, the business will consider penetration pricing. Therefore, the price that is charged after considering all operation cost would be lower than that offered by the local competitors. There are several assumptions that were made before introducing this pricing strategy. In particular, the buyers are price sensitive, the market is large to certain low-profit margins, and the close competitors would also lower their prices. The business considered this pricing option because it was found to have several advantages that will help the business survive in a market where there are other businesses that have already been established. Some of the benefits of this pricing option are explained below.
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