Introduction to our organization
Nowadays, technology is improving faster than before, and people’s rhythm life is accelerating. People want to have more convenient payment method and faster lifestyle and students also need this.
So, we came with a company called Face ID and it was founded in September 2017. This is a start-up business firm for university students to go in cashless and make their living easier. The co-founders were looking for the opportunity in the market and they saw that there is a huge problem of carrying cash everywhere. There were many things which motivated the founders to introduce this product in the market. The struggle of people carrying cash everywhere and the possibilities of being robbed.
Also, this type of business has great future because E-economy is developing and becoming more and more important, which will make the company expand after implementing it to the universities.
Before starting any company, the first and a foremost thing which is required is to choose the type of legal organization which the company will adapt.
There are four types of legal organizations:
• Sole Proprietorship
• Partnership
• Corporation
• Limited Liability Company
Our company is a Partnership based company because there are many people who have put in their best efforts to create this company. Partnership based company means collaboration of two or more people to create a product or a company. The advantages of being a Partnership based company is that there are more ideas and creativity involved in the business, each member of the company is contributing to the profits and sharing the losses as well.
We didn’t choose another form of legal organizations because our company is more suitable for a partnership as there are many people involved in the creation of the company and it is better than running an organization as an individual. A primary advantage is that the Partnership does not bear the tax burden of profits or the benefit of losses-profits or losses are “passed through” to partners to report on their individual income tax returns. A primary disadvantage is a liability-each partner is personally liable for the financial obligations of the business.
In comparison to another type of organization, they all are either Sole Proprietorship which is owned by an individual and very risk-taking as the owner is responsible for everything in the organization whereas corporation organization is under shareholders total control. Founder owns and operates the business on behalf of the shareholder.
Product description
Our product is like a camera but with high technology updates and slightly bigger than regular cameras. The product is going to fulfill the need of cashless society in the market. A society where you can buy anything by scanning your face. This product will make everyone’s life easy. There are other companies providing similar technology such as ours but what makes our product unique is that our customers don’t have to carry liquid cash or card with themselves to pay for their things. Other company’s product is not as technologically advanced as ours is. They don’t have to carry cash but in some of the other way, they must carry something with them to pay.
Our unique selling point is that we have created a product through which our customers can pay by scanning their face which is easier, and this product will also minimise the risk of fraud and theft.
Logo:
Company name: Face Scanners
Product name: Face ID
Motto: All you need is your face
Figure 1 – Logo of the company. Figure 2 – Product of the company.
Strategic Management
As this is a start-up business and there are no other companies who are willing to provide the technology and product which we are, so at present, there are no competitors but as this technology will spread in the market, other big companies will provide similar technology then the competition might increase.
Market Position
We are launching a new product to an existing market, so it will fall into the category of Product Development. Since our product is innovative and new to the market that will help the business attain new revenues. Also, it’s more likely to grow our business because new products will always attract new customers, even outside our target market. We did not use Market Penetration because there are high chances of lowering our industry prices, also it puts the risk of having lack of results due to being ineffective and possibly set our products price low (Ansoff 1965).
Figure 3 – Strategic Management.
We are launching our product in a new market and it is a new product, so it will fall into the category of Diversification. This strategy is relatively riskier than others because the business is moving into a market in which it has little or sometimes no experience.
When a business is adopting this type of strategy it should keep some things in mind like a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. However, for the right balance between risk and reward, a marketing strategy of diversification can be highly rewarding. The greatest advantage of business diversification is the potential increase in the revenue.
Product Life Cycle
Figure 4 – Product Life Cycle
Like all other products on the market, our product will have what is called a product life cycle. The different stages of this process are introduction, growth, maturity, and decline.
Starting with the introduction, after all, research and development have been made we launched our product and begin its lifecycle. The introduction stage of the product lifecycle is when the marketing team emphasizes promotion and the product’s initial distribution. At this stage, our company has no competitors and the sales are low, and it will remain until the market starts to accept our product, at this stage the company will lose money with the product.
In the growth stage of the product lifecycle, the company expects that the products, stars to be accepted and the sales start to increase. At this stage, we aim to start making some improvements to the product to stay competitive. At this point, we expect to have no competitors or maybe only a few new entrants.
In the maturity stage of the product lifecycle, the company aims that sales reach their peak. We expect to have competitors at this stage with alternative solutions, making competition in the market fierce. Because of this, we will start to work on our new entries strategies and make sure our product is being developed according to the in the market. The company expects to extend this stage as maximum, as possible and delay the next stage through the promotional mix that the company uses in the market.
In the decline stage of the product lifecycle, we expect sales to decrease as the product reaches its saturation point. The company must avoid transmitting an image of an old and overcome product.
As our product is a start-up company the main goal is to give our product recognition in the market and create a market standing so that in near future it will act as a market leader.
Marketing Management Orientations:
• Production
• Product
• Selling
• Societal Marketing
• Marketing
We choose the Societal Concept, considering that our product is made for specific customers and the advantages that will bring, such as, increases the sales, provide a better
image of the company, able us to focus more on the production and a put us in a higher position in the competitive industry.
We did not choose the Product and the Production Concept because, not only, these concepts are very distinct from the way we conduct and process our business, but also, of the disadvantages, like, the huge cost of producing a quality product and spending all the marketing budget unnecessary, we can also lose customers, for the bad quality of the product and the needs of the customer.
Our Mission Statement
S.M.A.R.T
Our business objective is based on 5 objectives
S: Specific
M: Measurable
A: Agreed Upon
R: Realistic
T: Time Based
Specific Implement our company to the market and start selling our product to university.
Measurable To be able to sell 2-3 universities when we launch our product.
Attainable To be able to make profit and pay our debts.
Realistic Develop our marketing department advertising and others.
Time-Based Selling the products 2-3 times within our first six months to make profit and pay our debts within 1 year.
Organizational Structure
Figure 5 – Organizational Structure of the company.
The Management Team:
Aditi Bohra
C.E.O.
Aditi is currently studying International Business and Management at Brunel University London. She is responsible for managing the future of the company and manages the necessary steps that will help the company to expand and grow as she has strong communication skills, able to adapt necessary management styles, willing to take calculative risks and is very creative.
Abdallah Abuhejleh
Chief Financial Officer
Abdallah is currently studying Business and Management (Accounting) at Brunel University London. Fully understands and undertakes the knowledge of Accounting as he has done great in the past Accounting exams and enjoys working in Accounting as it is his passion and wanting to fulfill his future by becoming a Certified Accountant.
Ana Lúcia Silva
Marketing Management Director
Ana Lúcia is currently studying Business and Management (Marketing) at Brunel University London. She is responsible for strategizing and implementing the marketing of the company’s product and for choosing the best segments that are most suitable for the product and the customers. She was elected to this department because of her skills, such as creativity, imagination, and perfectionism.
António Soares
Research and Development Director
António is currently studying Business and Management at Brunel University London. He is responsible for research, planning, and implementing new programs and protocols into the company and overseeing the development of new products and strategies. We gave him this position due to his excellent time managing skills. He is an analytical thinker and a critical problem solver with the ability to work independently.
Ruoyang Zhang
Human Resources Director
Ruoyang is currently studying Business and Management (Marketing) at Brunel University London. She is responsible to hire employees and decide which position and the salaries’ workers and their performance evaluation. She was selected for this position because she can see potential in other people and their charisma in persuading others to adopt their ideas, enthusiastic and motivated.
Damira Kulzhanova
Production Director
Damira is currently studying Business and Management at Brunel University London. As a production manager, she will be involved with the planning, coordination, and control of manufacturing processes and is also responsible for ensuring that the cost of the production is effective, motivate the team workers, review the workers’ performance and other duties. She became Production Director because of her experience in this section, like Astana.
Krishan Chandnani
Operation Director
Krishan is currently studying International Business and Management at Brunel University London. The following job description includes the individual to coordinate the internal structure of a firm based on their goals and objectives to have efficient productivity and that deadlines are met consecutively as well. He has excellent communication and problem-solving skills. He has prior experience as a manager and aims to fulfill his goal as a successful C.E.O. of a firm.
Our company has chosen Divisional Structure: Market-based because this is a start-up company, so we don’t have a large number of employees working in our organization, division of labor is done according to the skills an individual hold. We have each individual responsible for the work that they do. The Market-based structure is ideal for an organization that has products or services that are unique to specific market segments and is particularly effective if that organization has advanced knowledge of those.
The Divisional Structure benefits the organization as it provides a great deal of flexibility for the overall organization because each division operates separately and focuses on the most pressing issues facing it rather than being triaged by a central authority. Since each division is semi-autonomous, operational decisions that you need to make are made by employees closest to the specific issues and problems. The structure allows all employees to focus on their location services.
For example, locations and employees were empowered to make their own decisions about customer service. Additionally, it’s easier to pinpoint problems in the overall organization as each individual hold specific division.
Nothing is perfect and Divisional Structure is no exception, this structure gives our organization few drawbacks as well like, maintaining an appropriate balance of power is difficult between central authority and the divisions is often difficult. People on the project team might be more loyal to their department or team manager than to their work on the project, which can create conflicts. It is difficult in terms of company culture also as they have separate cultures among each division, which depreciates from the whole company’s culture and it also leads to lack of communication between employees among the separate locations.
Our company has chosen ‘Flat and Wide Organisation Structure’ because in a start-up company there are fewer employees and work are divided among them, so this structure is more suitable for our organization. Each employee is assigned the work according to their ability as an individual.
Flat and Wide Structure is useful to the firm as it offers more opportunities for employees to excel while promoting the larger business vision.
For Flat Structures to work, leaders must share research and information instead of hoarding it. If they can manage to be open, tolerant and even vulnerable, leaders excel in this environment. Flatter Structures are flexible and better able to adapt to changes. Faster communication makes for quicker decisions, but managers may end up with a heavier workload. Instead of the military style of tall structures, flat organizations lean toward a more democratic style. Although this system can pose a problem to the whole organization when the ratio of employees to managers become too out of proportion. Since managers are on equal footing and involved in the same projects together, they may give employees different tasks in a confusing manner. Unless the process is very clear, an employee may be trying to work for two bosses at the same time, leadin
g to confusing and contradictory instructions. As a business grows and eventually goes public, the flat structure cannot stay.
A public business needs a board of directors to evolve into a corporation, and a more complex business structure to expand into multiple branches. So eventually our organization must adopt some other structure once it starts to develop.
Our company has chosen Decentralised Approach because there are few employees in the organization hence, it will be more efficient for the firm as workers will feel more involved and will work efficiently. There will be more ideas into the firm and less event of strikes as workers won’t feel discriminated saving firm from bad reputation and creating a healthier work environment.
The authority is Decentralised, executives in the organisation will get the opportunity to develop their talents by taking initiative which will also make them ready for managerial positions. The growth of the company greatly depends on the talented executives. Decentralisation ensures better control and supervision as the subordinates at the lowest levels will have the authority to make independent decisions. As a result, they have a thorough knowledge of every assignment under their control and are in a position to make amendments and take corrective action. Decentralisation brings decision making process closer to the scene of action. This leads to quicker decision-making of lower level since decisions do not have to be referred up through the hierarchy.
Decentralisation can be extremely beneficial. But it can be dangerous unless it is carefully constructed and constantly monitored for the good of the company as a whole. Decentralisation of authority creates problems of co-ordination as authority lies dispersed widely throughout the organisation. Decentralisation requires the employment of trained personnel to accept authority, it involves more financial burden and a small enterprise cannot afford to appoint experts in various fields. Decentralisation puts more pressure on divisional heads to realize profits at any cost. Often in meeting their new profit plans, bring conflicts among managers. In cases of emergency where quick decisions need to be taken decentralisation won’t be suitable as almost everyone will be involved in the decision-making process thus delaying the work.
Figure 6 – Decentralised Approach.
When we first started our business, there were some skill gaps that we needed to considerate, like, for example, in IT and Marketing Department. When we first launched our company, we did not have enough money to hire many employees, but we are a technological company and we need more people for propaganda.
Action Plan:
Company Name: Face Scanner
Product Name: Face ID
For the Period: October-December 2017
Prepared on: 28 September 2017
1/10
2017 12/10
2017 21/10
2017 28/10
2017 2/11
2017 9/11
2017 15/11
2017 18/11
2017 26/11
2017 1/12
2017 7/12
2017
Created Organization Face Scanner
Early Product Concept Meeting
Finalized Decision on Product Layout and Features
Location Research
Finalized Location
Budgeting Expenses for Set Up of Business
Renting Factory Location and Buying of Equipment
Contacting Suppliers for Capital and Set Up Factory
Mass Social Media Marketing
Grand Opening
Human Resources Management:
Considering our company’s situation, we are hiring 15 people for our company. Six directors, which are, Marketing, Production, Operation, Human Resource, Research and Development, and Financial. Since we are a company which provides technology to others, we aim to expand our popularity when we start our business. So, we will require more employees to work within the production and marketing department. There is one employee for each department except for Research and Development and Operations.
Our skill gap is the lack of employees within the departments because our capital is not enough. Since we can’t have too many employees we will need to hire employees who have comprehensive skills. For example, when our company has a technological problem we need fix it in the shortest time. For the marketing area, we need people can do emergency public relation and advertise our product at the same time.
To overcome these skill gaps, we will use a flow diagram to track whether we will need to either hire new employees or train and develop our current employees.
Figure 7 – Flow diagram of recruitment process.
To compensate our employees, we aim to motivate them financially and non-financially. Firstly, we will motivate employees according to Maslow’s Theory (1943). For the low-level employees, they will require physiological and security needs as they will need to meet their basic needs.
For those who are barely satisfied with the basic needs, the incentive method is to motivate them within the workforce. The best incentive is to improve working conditions. Also, their safety and security needs if staff are worried about losing their job, they should talk to their managers. Security requirements can also have achieved through a variety of benefits, insurance, and strict rules and regulations.
For the mid-level employee’s social needs is important. For this level of staff, the best incentive is to organize social group activities, for example, to travel together. In addition, these employees are eager to be recognized, the best way to inspire them is to pay attention to praise. To convey you appreciate the outstanding staff. When the staff successfully complete a work, the most needed is the recognition of the leader, but in the practical work, this is the most likely to be ignored by the leadership. Leaders need to learn to respect people, especially respect for talented and work hard people, and the effectiveness of work will be significantly increased. In this way, employees can not only satisfy the needs of the realization but also make them feel that they are valuable and respected. For the co-founders, self-actualization is significant. They need the power to provide their success. Challenge themselves and achieve personal goals. The best motivate way is stock right transfer. Overall, according to the different employees, manager should use different incentives methods, identify your employees in which levels are the key.
Also, the compensation for low-level employees, we decide to pay £1008 per month, for mid-level employees we pay £1050 per month and £1100 for the C.E.O. In addition, we will give £1000 more to low level, £1600 for mid-level and £2000 for co-founders as performance bonuses in the year ending.
Business Environment:
Description and introduction of the organization’s industry
As a producer and seller of a high tech technology product, our company is integrated with the Technology market standing side by side with companies like Apple or Samsung. Anticipating new developments can be challenging. The industry’s tremendous investment in research is a strong indicator that we will soon be witnessing the emergence of ecosystems and platforms that deliver a whole new level of value and opportun
ities for technology professionals. Our company can be included in the so-called “exponential” technologies including face scanners, robotics, virtual and augmented reality (VR) (AR), 3-D printing, and artificial intelligence (AI) are opening significant areas of opportunity. The UK technology industry adds £7 billion to the economy, supports 70,000 jobs, is growing four times faster than the rest of the UK economy, has the most highly skilled workforce in manufacturing, and enjoys 7% of the global space market – a market forecast to be worth £543 billion by 2020. (UK space).
Figure 8 – Growth Rate in Technology, from 2014 to 2018 (ABI Research).
Although the fact of our company is not a direct competitor with Apple and Samsung, this kind of companies may become direct competitors in future since they develop the same type of products as Face ID does. This said it is possible to claim that our market is Concentrated because a few number of large companies is already implemented in the market.
At this moment since our company is a newer in the market, the main challenge that we will face is trying to implement the product to our main targets, all universities across the UK, and design a strategy to compete with bigger companies that can create a similar product.
Nowadays buyers are more receptive to technologic products and innovative ideas, so this can become a great opportunity to implement and develop our company in the market.
Being a company based in the UK means that our company is constantly subject to political changes, such as alteration in trade laws our taxes per example. For a technology company like ours, some specific changes in some specific departments can affect us directly. A change in intellectual property law could prejudice our company directly since it could per example finish the patent rights and some other company just start copying, producing and selling our product.
With a high rate of foreign students, UK universities highly depend on these students from overseas, if some immigration law changes, teaching institutes all over the UK would lose students and with this money from the fees they received, and this leads to economic factors tach, may affect our company, if universities lose great part of their income they would be unable to invest in technology, our product, although useful and efficient, will be in an extreme situation considered to be dispensable, and this would seriously affect the prosperity of the business.
PEST Analysis
Political:
• Trade Laws
• Changes in taxes
• Brexit Economic:
• Recession due to Brexit
• Changes in interest rate
• Increase of labour cost
Socio-Cultural:
• Immigrants go back to their own countries
• Consumer attitudes and opinions
• Ethnic/ Religious factors Technological:
• Change in intellectual property law
• Technologic has short lifetime
• Need to provide more safety due to increase in cybercrime
SWOT Analysis
Strengths:
• Innovative design
• Convenience of using the product
• Company with a motivated workforce
• Good investors Weaknesses:
• Possible competitors are larger companies
• Not achieving profit in the first year
• Lack of labour force due to budget control
Opportunities:
• Able to expand to other niches of market
• Unique product
• Be an effective and efficient product Threats:
• Recent company
• Producing only one product
• Owing a high value to creditors
Porter’s 5 Forces Analysis
Through Porter’s 5 Forces Analysis is possible to identify and adapt the business according to industry’s attractiveness and likely profitability. To look beyond the actions of possible competitors and examine what other factors could impact the business environment we will relate this theory to our business analyzing the factors included on it. The very first factor is competitive rivalry, as said before on the moment our company does not have any direct competitor since our product is an innovation, perhaps this group of possible competitors that can create a similar product are larger and more powerful companies, there are recognised by the quality of their products and probably they would achieve a better deal with suppliers since they are developing a larger number of products. However, our company aims to take advantage of being the only company producing this product. The second factor is the supplier power factor that in relation to our company it is possible to say that does not have much power since many suppliers could produce the raw materials to produce our product. The third factor of this analysis is buyer power. Nowadays, in the UK are 109 registered universities (Times higher education) this means that each one of this universities is a potential customer, but nowadays with a wide range of offers, it is possible to say that we are a vulnerable and subject to pression of these buyers to decrease the price of our product.
Regarding with threat of substitution, now this should not be a problem however in the long term this can change, this said the possible substitute of product, at the moment, it is our costumers keep doing the process that we simplify in the traditional way and not using it.
Regards to threats of new entries in the short term our product and market should be protected by a patent, but rivals can easily enter this market and weaken our position.
After this analysis we defined how we would create barriers to entry in our niche of the market, this would be through a competitive response from us, give emphasis to the product differentiation, and the fact that our company has control of the distribution channels of this product.
As competitive strategy our company will be focused in Differentiation, due to be unique in its industry and in the producing of this product, with this we expect to be valued by clients and due to this once we start launching new products they will be more interested to buy from us.
Marketing Management:
Market Segmentation & Target Marketing Strategy
Market Segmentation Methods:
• Geographic
• Demographic
• Psychographic
• Behavioural
We segmented our market in Geographic Segmentation since our product is very specific and needs to be used for certain variables, education, and occupation. We are only going to sell it to two universities, since it is a brand-new technology and it still needs some adjustments, before we sell it to other customers, these types of segmentation will also bring many advantages, like, the chance to target new territory, easy to apply and use, to focus more on the sales locally, because is just two customers and seasonal cycles.
We elect only to sell it to universities since our product was thought and conceive for them and then, depending on the popularity of it, start thinking about what companies, stores, and banks would take advantages of this.
We did not adopt the others market segmentation methods because they do not fit into the goal’s product that is to make an easier life for students and teachers, so it is not Psychographic and Behavioural Segmentation since these to focus more on lifestyle, opinion
s, activities, and interests.
Target Marketing Strategies:
• Undifferentiated.
• Differentiated (Segmented).
• Concentrated (Niche).
• Micromarketing.
From these Marketing Strategies, we choose the Concentrated Strategy because we are a small and recent company in the market, our product is going to be sold to specific consumers, like universities, we have a low budget marketing plan and we have lack of resources. With this choice, we will be able to focus more on our business and we do not need to go into mass production, distribution, and advertising.
We did not choose the Undifferentiated Strategy as it is more suitable for large and global companies and it focuses on an entire target market, the Differentiated Strategy, as it is using to target more than two segments and the consumer needs, is diversity and Micromarketing as it is “used to target a small segment of consumers with specific needs for products in the market” (Mello 2014).
Pricing Strategy
Cost-Base Pricing:
• Market-Penetration
• Cost-Plus
• Target Costing
• Optional-Product
Value-Base Pricing:
• Market-Skimming
• Competitive
• Captive-Product
• Product-Bundle
We are going to adopt the Cost-Base Pricing: Penetration Pricing Strategy, since we are a new company in the market, with a product that is brand-new and original and which no company has. “Penetration pricing is the practice of setting an initial price much lower than the eventual standard price.” (Griffin), for when we gain recognition in the market, increase the price.
We decide to choose this strategy for several reasons, such as, potential entry competition, considering our future competitors, Apple and Samsung, since they are the strongest technology’s companies, positive image of the product from initial costumers, to attract the costumers’ attention and absence of direct competitors due to being a recent product.
We decided to choose the Cost-Base Pricing over the Value-Base Pricing because we want the product’s price to be based on the cost of production, distribution, and sales since we are going to make a huge investment in this business, so we must make some profit.
We are going to use this strategy by adding the cost of production, distribution, advertising and then a small amount of the total of the costs to the make the products’ price, so we can make some profit after a few months, since it is going to be a small price as the technology will not be the best, like Apple, and also our company it is not very known.
Promotional Strategy
Communication Objectives:
• Informative
• Persuasive
• Reminder
Our communication objective is the Informative Adverts, considering that, are introducing in the market a whole new product, that we need to communicate and describe all the details of it, like, the value, the brand and the uses of the product. We choose this type of communication because of the advantages that we bring to the company, such as, reputation and recognition among consumers and provide examples of how the product is useful and what are the benefits.
The Persuasive and Reminder Adverts were not adopted because the first one shows the comparison of two or more brands directly or indirectly as they are trying to make the customer change his thoughts about a certain product, we did not choose this one due to our product does not have any directly competitor, since it is a brand-new. The second one is for products that are more mature and make people thinking about it, which is not our type of product.
We are going to use all the 5 promotional tools since we are spending £5.000 in Marketing and we are a small and unknown company, so we can be recognized by the consumers to expand our business to other universities in other countries.
In Sales Promotions, we will use Consumer and Trade Promotion by giving coupons, price packs and cash refund offers to attract the consumers’ attention to the purpose of the product and “make” them buy it.
We will use the Pull Strategy because we conceive this product due to the needs of the consumers, which was to facilitate and make accessible, not only, the attendance, but also the daily life of the students and the teachers.
This strategy will reduce the inventory levels and the costs of the system and attract the people’s attention before the product is available to purchase.
We did not choose the other strategy, since “Push Marketing is a promotional strategy where businesses attempt to take their products to the customers. The term push stems from the idea that marketers are attempting to push their products at consumers.” (Robertson).
Our product was conceived to solve the issue of the universities but after we make some sales and receive some recognition by the universities, we can start to apply their needs into the product, so it becomes more suitable for them.
Place
Marketing Products:
• Selling Directly
• Marketing Intermediaries
We consider that Selling Directly to the consumer it will give us more advantages, such as, the opportunity to test and try the product, personal recognition, saved money since we do not need to pay the cost of the distribution and easier to enter the product into the market, these also why we did not choose the Marketing Intermediaries.
Our office is in the centre of London, England, UK, since it is a very well-known and powerful city to start our new business.
Figure 9 – One office in One Canada Square, Canary Wharf, London, England.
Figure 10 – The location of our office.