Exit strategy

Business Finance

Valencia College

Question Description

I need an exit strategy for my business idea. Please check what I've done so far attached

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Business Idea: Gym towel with built-in cellphone holder - this is for guys and girls who frequent the gym and hate having to carry their cellphones in their pockets. Most pants for guys offer pockets that are not big enough for phones, especially if you consider the size of the new iPhone Pro Max or Samsung Note. Girls have even less options, as they just started making gym pants with built-in pockets for phones. But, in the end, the size of the pocket remains a problem. Since everyone takes their phone to the gym to listen to music and most people at the gym carry around a towel to wipe down equipment (one of the first rules every gym goer learns in their first years at the gym), combining the two would make sense. The pouch for the phone would be similar to those armbands you see people wearing at the gym, allowing users to make any input selection without having to remove the phone from the pouch. The towel would be machinewashable to make it as easy as possible to customers to wash and dry it. Swot Analysis: • • • • • • • • • • Strengths Small capital requirement for the startup. • Easy referrals by the customers to grow the • customer base. Strong customer relationship and partnership.• Observance of success culture and business ethics. • Weaknesses Small profit margins. Being a new product, perfectionism limits the output. Internal disorganization as this is a new venture. The employees cannot understand the actual expectations of the target buyers. Opportunities Potential for growth via social media • platforms and referrals. • Growing interests due to locally available raw materials. • Efforts to increase customer retention. • Quick understanding of customer purchasing• habits. Occasional tweaks for enhancing the culture. Exploring various geographical areas. Threat Uncertain economic environment. Dissatisfied customers can easily depart without the organization’s knowledge. The new product rollout is uncertain. Instability of customer support department. Staff member departures. Target Market The gym towel with built-in cellphone holder target all the gym-going enthusiast between the age of 10 and 35. Due to health issues and concerns, people of this age across the world tend to work-out as a way of maintaining good physiques and relaxing from their busy schedules. Again, the product respects that this age tends to be inseparable from their smartphones. Some work-outs come in the form of apps that are easy to follow. As such, this product is a perfect choice for gym lovers who heavily rely on their phones for entertainment and other forms of guidance. Also, the product traverses all the ethnic backgrounds without any prejudice because the gym is a universal engagement. One of the most exciting factors about the product is that it does not tend to breach any moral and ethical values of any society. Also, it does not have any discrimination on who should use it based on marital status. Its sole purpose is to provide the service of phone protection and to chip in if the tracks and other gym gears lack sufficient pockets. The product is pocket-friendly. The cost per piece is affordable to every willing buyer without stretching the pockets so much. As such, the product targets all gym lovers virtually. Lean Canvas Key Partners Key Activities Key Partners: Smartphone companies such as Apple Incorporation, Samsung Incorporation Market research Distribution to shopping centres , around the various gymnasiums, and online marketing. Key Good customer Suppliers: relationships. Cotton Cloth producers Transaction-based revenue Key Resources: Cotton cloth, tablet and smartphone dimensions Partners Key Activities: Producing tablets, smartphones, gym services, producing cotton cloths Value Proposition Value to the customer: Products in strategic locations such as shopping centres and gymnasiums. Customers’ problem: Inconveniences of lacking carriages for big phones and tablets. Gym towels with built-in cellphone holder. Customer need: Convenience of carrying big phones and tablets. Customer Relations Market research to establish the exact wants of the customers. Customer acquisition retention. Transactional-based revenue Gym enthusiast who are inseparable from their smartphones and All ages, all gender, all customer income levels The relations determine the success of the entire venture hence priority. Customer retention needs a cheap effort of providing them with their exact expectations. Key Resources Channels Efficient human MVP: Direct selling and GTWBICH (Gym selling through resource Towel With Builtintermediaries Effective distribution in Cellphone Holder) channels Other companies utilize social Distribution media platforms. channels: direct selling and selling Social media through platforms work intermediaries. better. Good customer relationships. Customer Segment Gym enthusiasts. Social media platforms are more costefficient. Direct selling and selling through intermediaries are integrated into the customers’ routine by availing the products to the shopping centres for the buyers’ conveniences. Cost Structure Revenue Streams Target customers are willing to pay for the value of tablet Most Important Cost: Cost of the raw and smartphone carriage. material. Currently, the customers are paying for the gym towel alone. Most expensive key resources: Ad-based revenue model. premises, tax, distribution channels. Value-based pricing tactic. Distribution across the globe Market Survey: While most of our interviews were done at the gym, we also made sure to interview non-gym goers. This helped us decide if our market resides solely within the fitness industry or not. Overall, all of us received positive feedback from the people we spoke to, many of them noting our product is unique, being able to combine hygiene and convenience. Two different personal trainers backed up our idea, saying how they would even recommend it to their clients – something we failed to recognize as a potential source of advertising when first discussing how to get the word out. The concerns expressed during the interviews centered mostly around the quality of the product, price, and how heavy it would be. Our hardest decision will be weighing cost versus quality, as we want to manufacture a high-quality product that can be produced inexpensively and sold for a profit, but not expensive enough to turn potential customers away. During the interviews, we came to realize that our product can be sold to nongym goers as well. One person noticed how this is something someone can even take it to go grocery shopping, as our product can also serve to store keys, credit cards, or money. This lets us know that our market is even bigger than first believed during initial discussions. Competitors: The gym towel with a built-in cellphone holder is a unique product; however there are other competitors who are in the business of making gym towels. The top competitors include; Towel Manufacturers USA, Oasis Towels, and Thomas Net. Among the three manufacturers, the most competitive is Towel Manufacturers USA. Towel Manufacturers USA They are innovative, coming up with different and unique designs of towels. The multiple designs make them competitive and preferred by most customers. They also have a strong brand. They also use a variety of fabric and make custom made towels. The company enjoys a huge capital base, which makes them a strong player in the industry. Oasis Towels Oasis Towels have been in the business for the last 20 years. They custom make towels according to age and other tastes. They also brand towels, which also makes them competitive in the industry. Mostly they manufacture their towels from cotton. Thomas Net Towels Thomas Net Towels is a strong player in the industry. Thomas Net Towels come in multiple colors and are mostly manufactured out of cotton and microfiber. They also come in different sizes, which is a feature that has enabled them to do well in the market. The towels also have hemmed edges, which also positions them as a strong force. Blue Ocean Analysis According to Mauborgne & Kim (2005), the blue ocean strategy aims at finding ways to differentiate businesses by opening up new markets and creating new demand. It entails creating and capturing the markets which are uncontested, thus making the competitors irrelevant. The blue analysis is the opposite of the red ocean, which focuses on the existing industries today and ways to make them stand the competition. For the analysis, Towel Manufacturers USA will be used since they are in existence and use the traditional model. Blue Ocean Curve The curve will involve our company with the new idea and Towel Manufacturers USA. Blue Ocean represents the new idea, while the Red Ocean represents Towel Manufacturers USA. Offering Level High Blue Ocean Red Ocean Low Durability Convenience Design Pricing Utility Competing Factors Note; The competing factors include durability, convenience, design, pricing and utility. Competitive Landscape Map Affordable High Towel Manufacturers USA New Business Idea High Low Oasis Towels Thomas Net Towels Thomas Net Towels Low Fundraising Utility Gym Towel with a Built-in Cellphone Holder: Fundraising Plan Type of Investor Angel Investor Amount of Investment Needed $1,000,000 Venture Capitalist $2,500,000 Crowdfunding $100,000 Family & Friends $50,000 Small Business Grant $25,000 Local Gyms Partnership $10,000 Restaurant Fundraiser $10,000 Total: $3,675,000 Explanation Individual who provides capital for business start-ups, usually in exchange for convertible debt or ownership equity. A private equity investor that provides capital to companies in exchange for an equity stake. Funding of a project by raising small amounts of money from a large number of people via the Internet. Tier options created for different levels of investments* FFF round for close family and friends who have shown interest in our product, have faith that we will succeed, understand our plan and are clear about the risks. Money that is given to a person, business or corporation from federal, state, county or local governments, or private business or corporations (FedEx, NASE Growth, IdeaCafe). For every person that signs-up for a long-term gym membership, we will receive a percentage of the membership due at signing. Social events targeting restaurants that promote healthy eating. A percentage of all profits will be used as Crowdfunding Strategy: Tier 1 - $10,000+ • First to receive our product, before it is even mass-distributed • Feedback considered into making the final product • Everything included in Tier 2, Tier 3, and Tier 4 Tier 2 - $5,000 - $10,000 • Second to receive our product, but before retailers are able to sell it • Personalized gym towel with your choice of embroidery • Everything included in Tier 3 and Tier 4 Tier 3 - $1,000 - $4,999 • Product shipped two-weeks before available for purchase in stores • Special edition gym-towel and water-bottle • Access to future products before public Tier 4 - $100 - $999 • Product shipped when ready for mass distribution • T-shirt • (2) Gym-towels in your preferred color ...
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