Essay: Analysis of Property Services Company ‘Settle’ (SWOT, PESTEL, 4 Ps)

Executive Summary:

“Settle” is a business that provides services that include; home removal services, housekeeping and maintenance with an affordable price. It is located in London with its main office located in Holborn. The Unique Selling Point (USP) is providing the services all in one company to satisfy residents in London. This includes; removal, housekeeping and maintenance services. I decided to open a business due to its great financial reward and independence. The business is going to be a partnership due to its high costs, being able to easily achieve economies of scale and better specialist knowledge. My business relies on funds from myself, venture capitalists, a business partner and a bank loan. Financial support is necessary to help cut more costs and maximise revenues easily. The key financial figures are all stated in the cashflow statement which include, wages, cost of equipment, loans etc. The estimated cost of the business is £2,343,847.04. A break-even is expected to occur in the first year.

Business Objectives:

Aims:

• Maximising Revenues.
• Being the market leader and gaining a huge amount of market share.
• Increasing brand awareness.

Objectives:
S – Specific- Increasing sales, generating profits and investing in marketing.
M – Measurable- Making £ 255,652.96 profit in the first year
A – Agreed- Business partner agrees about the main objective with resources available.
R – Realistic- Services provided are highly demanded by residents in London and marketing helps increase demand.
T – Time-specific- Increasing sales with £ 255,652.96 profit and more consumers monthly can be achieved in a year
Short-term visions and Long-term visions:

• Doubling its revenues by contacting a marketing agency for a month to help to find methods to meet the needs of customers and lowering prices which leads to cost leadership.
• Achieving 100% customer satisfaction by conducting questionnaires for feedback, the preparation of bundles stating that as you buy more, you get way more and setting discounts.
• Achieving 100% employee satisfaction by giving employee of the month awards and check on them every week to investigate their concerns.

Mission Statement:

The main goal of “Settle” is to proactively offer a provision services which are removal, maintenance and housekeeping for customers with care and motivation to help customers settle comfortably in their homes.

Feasibility Study on Contracting:

I interviewed the manager of Chapter Spitalfields, a student accommodation building located in London about their contracts with other firms, who provide maintenance ,housekeeping and storage services. Chapter benefits because contractors perform these services without a heavy reliance on Chapter’s resources. There are many benefits of working with growing and expanding businesses like Chapter. This includes; increased demand and growth for the contractor’s company and working with a reputable and growing business which enhances brand reputation. The objective of contractors is to provide excellent and professional service, and it should be licensed and recognised.

The Business Environment:

The SWOT analysis plays a vital role in the business. ‘It is an analysis of the business’ internal strengths and weaknesses and its external opportunities and threats.’ (INTO City University of London,2018)

SWOT

Strengths:

‘Internal attributes that help the business achieve its objectives.’ (INTO City University of London ,2018)

• The diversification of services is a strength for the business. The business consists of three different types of services which include; housekeeping, maintenance and removal services. This leads to a competitive advantage for the business due to entering more markets.
• Having a motivated workforce is important for the business because it leads to producing goods and services efficiently. “Settle” aims to look carefully at the job applicants before hiring them.
• Being environmentally friendly is good as it helps increase demand by enhancing brand reputation.

Weaknesses

‘Internal attributes that work against a successful outcome.’ (INTO City University of London 2018)

• Limited brand awareness is a starting issue for the business as it is new, and it would to take high marketing costs for the business to get noticed by potential consumers. This is also due to the high number of competitors. Investing on marketing is required to increase brand awareness.
• Operating in one location limits options access to markets and more brand recognition.

Opportunities:

‘External factors a business can use as an advantage.’ (INTO City University of London 2018)

• ‘Operating in London is a beneficial advantage for “Settle” because of easily having access to diverse and talented workforce with an estimate of over 4.78 million workers.’ (Rozario 2018) ‘According to Jeff Brennan, Vice president of marketing in Finsphere Corporation, London is one of the strongest cities which offers one of the best prospects for business development and innovative thinking.’ (Business.London,n.d)
• ‘London offers flexible employment laws and low-cost legal structures, entrepreneurship visas and capital gains tax relief which very beneficial for business development.’ (Amaze London,2018) ‘It has a population of 8,787,892 which is beneficial as you would be able to find many potential consumers.’ (Worldpopulationreview2018) Many demand home improvement services, which helps maximise revenues easily.

Threats:

External factors that could jeopardise the business. (INTO City University of London 2018)

• Threat of New Entrants should be considered because almost every market is filled with many businesses who could have better business strategies which could lower chances of gaining competitive advantage. With that, strategies can easily be copied by obdurate competitors which could lead to the same issue.
• Brexit has an unpredictable outcome on the UK’s economy which could negatively affect businesses.

PESTLE

The PESTLE analysis also plays an important role in the business’ operations. ‘It is a type of framework that helps analyse the larger external environment in which the business operates. It also collects necessary information that enhances decision making and marketing plans which helps ensure legal compliance. It consists of six factors which are, political, economic, social, technological, environmental and legal.’(INTO City University of London,2018)
Political Factors:

‘Are governmental or political actions internationally or locally that may go against the business’s operations.’ (Hall, Chambers and Gray, 2008)

• Brexit is an unpredictable event and it is when the United Kingdom officially leaves the European Union (EU) by the 29th of March 2019. This could be a possible issue for the company because it relies on some imports like, trucks. The trucks are from Germany which, is an EU member. ‘There are fears that increased tariffs may be applied to imports by EU countries which would have a negative impact on the business. ‘(Milmo 2016).
• Corporate taxes could be an issue because in the beginning for the business due to the lack of profit. ‘The current corporate tax rate is 19%.’ ( Government UK,2019) This may affect the business in the beginning as a significant portion of the profit is taken away noting, the high costs faced in London. However, taxes are not high which is an advantage.

Economic Factors:

‘Are factors in a business’s market and the economy that may affect the business’ operations.’ (Hall, Chambers and Gray, 2008)

• ‘Consumer confidence is estimated by the degree of optimism felt by consumers about the economy and financial situation. It has faced a slow increase in 2018.’ (INTO City University of London,2018) This would negatively affect the businesses due to lower demand. However, “Settle” offers cheaper prices compared to competitors which would not be a leading competitive advantage.
• ‘The UK’s current interest rate is 0.75%.’ (Mason,2018) The effect of Brexit could increase interest rates even more which leads to higher costs. If rates increase in the future, it would lead to higher costs for the business.

Social Factors:

‘Are factors related to demographics and lifestyles which may affect the business’ operations.’ (Hall, Chambers and Gray, 2008)

• The business’ services are for residents in London. There are no social factors affecting the business as all certain lifestyles and social classes would be potential customers.

Technological Factors:

‘Are factors due to technological innovation that affects how the business functions.’ (Hall, Chambers and Gray, 2008)

• “Settle” invests in technology as it is used way often today and leads to improving the production process. It has a mobile application and website prepared for the customers about the information of services of the business. This can be an advantage for the company as it enhances customer relations. Consumers are fully able to book and pay for services online either on the app or website which helps improve the production process efficiently.

Legal Factors:

‘Are factors that are related to a country’s legislation which affects how the business functions.’ (Hall, Chambers and Gray, 2008)

• There are necessary laws “Settle” must follow like, the Minimum Wage Act 1998, Health and Safety Act 1974, Consumer Rights Act 2015 etc. It must follow these laws to not get shut down nor suspended for any reason which could easily ruin its brand reputation. These laws are necessary for the business to follow to ensure survival for the business.

Environmental Factors:

‘Are environmental factors which affect the business’ operations.’ (Hall, Chambers and Gray, 2008)

• “Settle” needs to consider specific regulations regarding the environment. It would then not face trouble by the government nor environmental activist groups.

Marketing section:

London offers many opportunities for business development and innovation with many potential markets to access. ‘According to the World Bank, it is one of the world’s easiest places to set up a business.’(Hodgson 2017) ‘Furthermore, being located in Central London, builds up reputation for the business as it a common area with many businesses.’ (360 ICT) There are many competitors for removal services, that the company will face like Abel’s Team and others. For other services like, maintenance and housekeeping competitors include St. Anne’s Housekeeping and ECMS. The segments targeted will be residents in London from all social classes, lifestyles etc. Typical customers would be residents, having maintenance issues such as, electricity problems, need housekeeping or request moving.

‘According to Manuel Minichberger, the removal industry is among the benefits in the huge increase in UK property transactions over the last few years.’ ‘However, current political and economic factors such as, Brexit are threatening them, especially smaller firms.’ (Minichberger 2017)

The outcome of Brexit is unpredictable, and it could affect markets negatively.
Maintenance services also plays a huge role in the market. ‘The Office for National Statistics Family Spending Survey estimates that the average UK household spends about £32 a week on repairs, maintenance and alterations, that aggregates nationally to £44 billion a year. In addition, housekeeping is also highly demanded in the UK as, there has been a 29% increase rely on domestic services which includes cleaning.’ (Davis 2018)
(Green,2017)

Marketing mix (4 Ps)

The marketing mix plays a vital role in the success of a business. ‘It contains elements that are designed to meet the needs of its customers. It consists of four elements, known as, “the 4ps” which includes product, price, promotion and place.’ (Hall, Chambers and Gray, 2008)
The product is basically the provision of services which include, maintenance which includes, plumbing, carpeting and electricity, removal processes and housekeeping for all homes in London.
The pricing strategy used is market-penetration pricing because it is always best to catch the customer’s attention with setting a lower price compared to competitors for gaining competitive advantage in the market. The prices of the company will be for removal services £60 with per 2 hours and £300 per day up to 8 hours. Moving to a one-bedroom property £120, two-bedroom property £175, and for three-bedroom property £225. As you pay more, you pay less additional costs. Maintenance prices depend on the type of maintenance offered are significantly cheap. ‘For example, carpentry per hour is £50. Housekeeping is relatively £15 per visit, prices increase slightly for bigger homes similar to the pricing of removal services.’ (Zesty Property Services), (Removal Reviews)
The place of the business will be serving the whole community in London, with the main office located in Central London in Holborn. London is one of the best places for business development. The channels of distribution for the company will be in London only and to order these services, you can contact the company online using an application or through the website or by telephone.
For promotion, “Settle” aims to promote itself with above the line and below the line techniques. Above the line, promotion will include, being on billboards and on Television and this is how the company will catch the attention of Londoners. Below the line, coupons will be available which allows the customers to get great offers, as they pay more, the additional costs are even less.
The USP is providing these different types of services in one company. This helps show customers that the business is mainly for home improvement. Services provided relate to home caring and this is not really found within other business especially, when it comes to low prices for a highly demanded service.

Financial section:

(The Prince’s Trust, n.d) / Wages (Indeed)
The following Cashflow statement shows the money coming in and out of the business. Two partners of the company presented a total of £1,000,000 as starting capital and a potential venture capitalist investment of £50,000. The other financial components are equipments, wages, loan from a bank and rent with a total of 1,293,847.04. The company is expected to make a profit of £ 255,652.96 in the first year after corporate tax was applied. The sales are increasing due to the investment of marketing strategies to help increase demand. This can help show the business how it can financially succeed.

Conclusion:

“Settle” has potential to succeed in the market even though, it may face harsh competition. London is beneficial and one of the best for business development. It also has a high demand for home improvements which is an advantage. It can invest in marketing strategies and set lower prices to gain market share. Job interviews are conducted strictly, and we care for motivation of employees for better productive efficiency. All of this proves that the business can succeed.
12.1.2019