The Resurgence of Croatia’s Tourism
Business: Trends and Future Prospects
LAW 6003 - Business Law
University of Cincinnati
October 15, 2024
Introduction
Background
Croatia is an exciting tourist destination in
Europe. In the past, Lonely Planet has named
the country among the top tourist
destinations in the world (IBP, Inc.,
2015). National Geographic Adventure
Magazine has given the same ranking for the
country in its 2006 report of the best holiday
destinations in Europe (George, 2013).
Statistics from 2014 reveal that the country
receives more than 14 million tourists
annually (Eurostat, 2015).
The tourist numbers have been increasing
steadily after the end of the 2007/2008
global financial crisis (The Croatia Tourism
Cluster, 2013). The Croatian government
expects to double the number of tourists in
2020 and increase the revenue generated
from the sector to more than $18 billion
annually (IBP, Inc., 2015). Authorities in the
country’s tourism sector have registered
eight regions as protected national parks
where tourists would like to visit (George,
2013).
Istria, Kvarner & Highlands, Dalmatia,
Šibenik, Dubrovnik, Central Croatia,
Slavonia, and Zagreb are the main tourist
regions in Croatia. Croatia also has seven
world heritage sites that tourists come to
visit. They include Stari Grad Plain, Cathedral
of Saint James, the historic city of Trogir,
Episcopal Complex of the Euphrasian
Basilica, Old City of Dubrovnik, Historical
Complex of Split, and Plitvice Lakes National
Park.
Most of the activities that go on in these
regions revolve around enjoying outdoor
activities. For example, many tourists who
visit such regions like to participate in diving
activities, hiking, biking, and similar ventures
(The Croatia Tourism Cluster, 2013).
However, beach activities are the most
commonly preferred recreational ventures
for foreign tourists. Companies, which own
yachts and operate along the country’s
coastline, provide such services.
Comprehensively, the resurgence of tourism
business in Croatia has led many experts and
observers to argue that the country is
experiencing a renewal of the sector as a
vibrant economic hub of the Eastern
European nation (The Croatia Tourism
Cluster, 2013; Eurostat, 2015; IBP, Inc.,
2015).
Selection of a Scenario
According to The Staff of Entrepreneur
Media, Inc. (2015), many business
development plans have emerged from
different scenarios that include a new
company start-up (by an entrepreneur),
establishment of a new company (as an
existing company owner), establishment of a
new company in an employment
organisation, and the establishment of a
non-profit organisation. This business plan is
for the establishment of a new company,
with the business promoter as the
entrepreneur. The motivation for choosing
this type of business start-up is to apply the
promoter’s knowledge on entrepreneurship
and business market analysis to a real
business.
The Business Opportunity
Rationale behind the Business Idea
As mentioned in this report, Croatia has
recently been posting positive results in its
tourism performance. The country has many
tourism products that people from different
parts of the world come to enjoy (The
Croatia Tourism Cluster, 2013). However, for
several reasons, the industry’s stakeholders
have not fully exploited the country’s
tourism potential (George, 2013). The
proposed business owner, having come from
Croatia, has extensive knowledge of the
country and its tourism potential.
Furthermore, he has existing links with
business contacts in Croatia who could
provide attractive tourist products and
services to foreign tourists.
Therefore, besides exposing tourists to
conventional tourism products, such as
cruises and national park visits, which have
always characterised the Croatian tourism
experience, the business owner could
expose new tourists to other activities in the
countryside, which will appear in later
sections of this report. Having an operational
base in London, the business owner could
also exploit the growing number of people
who want to visit Croatia from Britain (Elton,
2016).
Target Market, Customer and Accessibility
The target market for Blue Lagoon will come
from Britain as an attractive source of
tourists. The target customers would be
British nationals and foreign tourists who
wish to travel to Croatia. The market is
accessible.
Business Model
The business model would be a tour package
deal for the customers. Stated differently,
the customers would pay for a holiday
package that includes transport,
accommodation, meals and various outdoor
activities that they would do when in Croatia
(Cobb, 2011).
Structure of the Work
Collectively, this paper has five chapters. As
seen above, the first chapter introduces the
business idea, and sets the framework for its
conception. The second chapter highlights
the business opportunity and concept. Key
sections of this chapter explain the
company’s mission, vision and proposed
services/products. The third chapter
evaluates the feasibility of the business plan,
considering the context of implementation
and the prevalent industry dynamics. The
fourth chapter analyses the strategies
chosen for the execution of the business
idea. It also contains information about the
development of the business model. The last
chapter provides an overview of the business
plan by highlighting important information
about it, such as the marketing plan,
operational plan, and financial plan.
The Business Concept
The purpose of this chapter is to explain the
business idea in detail.
Business Opportunity
The business opportunity that justifies the
establishment of Blue Lagoon emerged from
a market research, which happened by
analysing the Croatian tourism market and
the tourism potential of Britain, as an
outbound tourism market. The market in the
gap emerged from undertaking a market
segmentation strategy through a review of
secondary research information.
Business Concept
Business Idea
There is potential for a viable business for
Blue Lagoon if British nationals and foreign
tourists gain access to these markets
(Lickorish, 2012; Eurostat, 2015). The
promoter provides an opportunity for
achieving this goal by developing holiday
packages that would exploit this potential.
This is the business idea.
Mission
Blue Lagoon would be a service-centred
travel agency that offers unique and
competitive tourism products that appeal to
British nationals and foreign tourists.
Vision Statement
Blue Lagoon would become the leading
British tour travel company that organises
for holiday trips to Croatia.
Services
Blue Lagoon would offer three main
products – Spirited Croatia, Real Food
Adventure, and Jewels of Croatia. They
appear below
• Spirited Croatia: The Spirited Croatia
package would mostly be for the young
and energetic people who enjoy outdoor
activities, such as trekking, biking, and
kayaking. This package would be
available for young and middle-aged
customers because Croatia is home to
some of the world’s most amazing
national parks, waterfalls, and
mountains, which could host these
activities (The Croatia Tourism Cluster,
2013; Eurostat, 2015; IBP, Inc., 2015).
This package would include a seven-day
stay at a villa, transport to the location,
meals, and sightseeing.
• Real Food Adventure: The Real Food
Adventure package would mostly appeal
to an older audience. The package
involves farm visits to rural parts of
Makarska where the promoter comes
from. Here customers would partake in
different activities that include cherry
picking, wine tasting, and potato digging.
The visitors would also sample the local
dishes served in the Croatian
countryside. The Real Food Adventure
package would include a seven-day stay
at a villa, transport to the location, and
meals.
• Jewels of Croatia: This holiday package is
best suited for the younger customers
because it involves exposing visitors to
some of Croatia’s most exciting “jewels.”
This package would mostly involve
organising for cultural interactions
between the visitors and residents of
Croatia. In detail, the customers would
visit historical city centres, such as Zadar
and Split, which have a rich cultural
background. The trip would include a
seven-day stay at a villa, transport, and
meals.
Positioning
Different companies have unique positioning
strategies that hinge on different product
attributes including pricing, demographics,
distribution, and affinity (among others)
(Possel, 2013; Sengupta, 2005). Blue
Lagoon’s positioning strategy would hinge
on affinity as a key product positioning
strategy. Stated differently, the business
owner would position the company’s
products to appeal to people who have a
strong spirit of adventure, and, at the same
time, appreciate quality service.
Scale and Growth Anticipation
The anticipated sales growth for Blue lagoon
hinges on the financial projections of the
business revenue that appear in chapter
three. However, a snapshot of the same
appears in the graph below
Figure 1: Scale and growth expectation
(Source: Created by Author)
According to the graph above, the business
owner of Blue Lagoon expects that the
company’s sales would rise by 15% each year
(figures are in British pounds).
Business Model
The business model would be a packaged
tour model. In other words, Blue Lagoon
would offer holiday packages to its
customers. As mentioned above, the holiday
packages would include accommodation,
travel and meals. Therefore, customers
would be required to make a one-off
payment and enjoy the trip.
Feasibility
Market Research Methodology
Defining the Research problem
Problem Formulation
The tourism industry is a traditional
economic sector that has thrived in different
eras of human history (Tourism Alliance,
2016). In Croatia, and most parts of Eastern
Europe, it remains a vibrant economic sector
and a significant foreign exchange earner
(The Croatia Tourism Cluster, 2013).
However, the full potential of this sector, in
Croatia, remains untapped because most
people are not aware of the amazing tourist
attractions the country has to offer.
Part of this problem rests in the failure of
existing tour companies and travel agencies
to highlight some of the country’s “hidden
gems” because they mostly focus on
providing traditional tourism products, such
as hiking, biking, ship cruises, deep-sea
diving and similar products (Visit Croatia
Tour Operators, 2013; The Croatia Tourism
Cluster 2013). Therefore, the hope of fully
exploiting Croatia’s tourism potential rests in
setting up enterprises that could holistically
display and exploit what the country has to
offer. This background outlines the basis for
the formulation of this business proposal.
Aim of the Current Market Research
To identify a business opportunity in the
Croatian tourism industry
Design of the Market Research
According to IBP USA (2012), there are
different methods researchers could use to
undertake business research. The main
techniques include descriptive methods,
exploratory methods, qualitative
techniques, quantitative techniques, and
casual research techniques (IBP USA, 2012).
Each technique suits unique research
circumstances, or market conditions. For
purposes of writing this proposal, the
exploratory technique is the most
appropriate technique to use because this
research is exploratory in nature, in the
sense that it identifies a gap in the market
that the proposed business would fill using
this proposed business plan as an execution
tool.
For further analysis, the market
segmentation method would be applicable
in this paper to find out the specific target
market that would use the services offered
by the proposed business. Therefore, the
exploratory research design would help to
identify unsaturated areas in the Croatian
market where other tour companies have
not fully exploited. The identification of
these areas would provide the impetus for
the introduction of Blue Lagoon, as a viable
business, to fill the market gap.
For purposes of finding the most accurate
information about the market segmentation
strategy, the proposed research would
consider useful market informatics, such as
the demographic profile of the target
market, the geographic segmentation of the
target market, behavioural segmentation of
the target market, price segmentation of the
target market, and the psychographic
segmentation of the same. For purposes of
understanding the potential for market
segmentation, the business owner would
consider the effects of important details
surrounding the market entry strategy, such
as the presence of oligopolies, monopolies,
competition, rivalry, licensing laws, and
similar factors.
Information types and sources required
For purposes of preparing this report, the
business promoter would use secondary
data sources, like books, journals, and
government reports.
Proposed Methods of Data Analysis
For purposes of data analysis, we will use
descriptive presentation techniques, such as
graphs, tables, and flow charts, to explain
different segments of the business proposal
and its associated data.
Formulation of Findings
After completing the above market research,
there would be a clear picture of the best
marketing strategy to use when introducing
Blue Lagoon to the British tourist market.
Similarly, there would be a clear
understanding of the kinds of services the
business would offer and the best resource
requirements for developing an effective
marketing strategy (The Staff of
Entrepreneur Media, Inc., 2015). These
solutions would be tested for financial,
organisational, and resource availability in
the sections that follow
Market Research and Product Service
Feasibility
Before setting up Blue Lagoon, the business
owner would carry out a market feasibility
test to make sure the business plan works.
The aim of undertaking the market feasibility
study is to have a neutral point of view
regarding the possibility of the business plan
working, or not (The Staff of Entrepreneur
Media, Inc., 2015). This section of the paper
uses information from an analysis of the UK
tourism industry, as a source market, and
Croatia as a tourist destination market to
find out the market opportunity that Blue
Lagoon would exploit.
During the global recession that lasted from
2008 to 2012, the Croatian tourism industry
suffered decreased tourism numbers
because of a low demand for tourism
products (IBP USA, 2012). However,
throughout the years, there has been a slow
and steady rise in the demand for the
country’s tourism products (Visit Croatia
Tour Operators, 2013; The Croatia Tourism
Cluster 2013). In fact, as of 2012, Croatia’s
tourism industry accounted for more than
30% of the total employment in the country
(Usa International Business Publications,
2015).
The hotel, catering, and restaurant sectors
accounted for the highest numbers, in terms
of employment growth, because they were
responsible for three out of four
employment opportunities in the tourism
sector (Usa International Business
Publications, 2015). The Croatia Tourism
Cluster (2013) affirms the country’s recovery
story by saying “Tourism industries in Croatia
recorded a total turnover in 2011 of EUR 4.2
billion, corresponding to 5.4 % of the total
turnover of the non-financial business
economy in Croatia” (p. 2). Relative to other
European Union (EU) countries, Croatia’s
recovery path is only slightly below 5.8% of
the total turnover of the non-financial
business in the EU (Eurostat, 2015).
The above findings reveal that the Croatian
tourism industry is on an upward trajectory
and doing better than most countries in the
EU. The proposed establishment of the Blue
Lagoon tour company aims to capitalise on
this trend. Statistics from Tourism Alliance
(2016) also reveal that the value of outbound
tourism supports the possibility that Blue
Lagoon would capitalise on the potential for
increased tourism between the UK and
Croatia. According to the diagram below,
many British tourists spend the highest
amount of money on accommodation
services, food, beverages, and railway
transport services (Tourism Alliance, 2016).
Conversely, they spend the least amount of
money on exhibition, conferences and
sports-related activities (Tourism Alliance,
2016).
Figure 2: Outbound Tourism Expenditure for
British Tourists (Source: Tourism Alliance,
2016)
The table above also shows that the main
services Blue Lagoon would offer
(accommodation, food, and transport) rank
high in the list of products that British
tourists spend their money on. Based on this
analysis alone, coupled with the thriving
nature of the Croatian tourism industry,
undoubtedly, the potential for Blue Lagoon
to tap into the positive economic indices
characterising the tourism exchange
between Britain and Croatia exists. Indeed,
the above statistics reveal that the
businesses plan to establish a tour and travel
business to tap into the tourism potential
between Britain and Croatia is feasible.
Market Segmentation
According to Kotler (cited in Fifield, 2008)
“Market Segmentation is the sub-dividing of
customers into homogenous sub-set of
customers where any sub-set may
conceivably be selected as market target to
be reached with distinct Marketing Mix” (p.
193). In this proposed market segmentation
plan, the targeted clients would be British
and foreign tourists. This choice of target
market stems from the fact that Blue Lagoon
would be London-based and a high traffic of
British tourists visit Croatia annually (Bhatia,
2012).
The primary target market would mainly
consist of three groups of travellers – family
vacationers, soft moderates, and general
enthusiasts. General enthusiasts are the
main clients because they often travel with a
partner and usually have a medium to high
income (Wedel and Kamakura, 2012).
Similarly, they are likely to participate in
challenging outdoor activities that
characterise most of Blue Lagoon’s proposed
holiday packages. Family vacationers would
be the second most desirable target market.
Similar to the first group of holidaymakers,
this group of clients often travels with their
kids and possibly spend a couple of days in
one holiday destination (Wedel and
Kamakura, 2012). However, the first group of
clients would be more appealing than this
group of tourists because they are more
adventurous than the family-oriented
travellers are (Fifield, 2008).
The target market would also include “soft
moderates” who mostly comprise of middle-
aged people with medium, or low, income.
They are also adventurous people, but prefer
low-risk activities. Nonetheless, they would
fit in the profile of the targeted market.
Therefore, holistically, this market
segmentation strategy identifies three
groups of customers – family vacationers,
soft moderates, and general enthusiasts. The
table below summarises their key
characteristics
Table 1: Market Segmentation for Blue
Lagoon
Market
Segment
Key characteristics
Family
vacationers
• Often travel with their kids
• Possibly spend a couple of days in
one holiday destination
Soft moderates
• Adventurous people
• Prefer low-risk activities
• Have medium, or low, income
General
enthusiasts
• Often travel with a partner
• Usually have a medium to high
income
• Likely to participate in challenging
outdoor activities
(Source: Created by Author)
As part of the business marketing strategy,
the promoter would give out flyers to
potential clients in London. More
importantly, since the promoter works at a
restaurant in London, he would hand out
flyers to different customers who patronize
the establishment. This strategy would be
the primary market entry plan because it is
cheap and aligns with the promoter’s daily
routine. Therefore, the business owner
could participate in the normal day-to-day
activities of his work and promote the new
business at the same time.
An auxiliary marketing strategy would
involve linking with Expedia to increase the
marketing scope. Expedia is one of the
world’s most recognisable travel brands
(Tourism Alliance, 2016). It provides
different services to its clients, including
hotel bookings, car rental services, and
similar offers (Tourism Alliance, 2016). By
linking Blue Lagoon with this travel agency,
the company could gain access to a wider
pool of clients. Similarly, it could benefit
from the “spill over effect” of many clients
who would possibly
outstretch Expedia’s company infrastructure
during high tourism seasons. Alternatively,
the company’s long-term plan involves
creating a website for the company as
another avenue for Blue Lagoon to increase
customer traffic to the business.
Identification of Product/Service
Gap in the Market
The proposed tour company will organise
and arrange trips for British and foreign
tourists willing to travel to Croatia. The
destination (Croatia) is deliberately selected
for this study because, being a citizen of the
country, the promoter understands it well.
Blue Lagoon would offer different types of
services to its clients. At the core of its
service model would be the ability to provide
its clients with an excellent holiday
experience by organising adventurous trips
to different and exotic locations in the
Eastern European nation.
Market in the Gap
After analysing the opportunities that
emerged in the market segmentation plan,
the business owner found that the market
opportunities for reaching the target market
were present. Particularly, on completion of
the exploratory research, the emerging
demand for Croatian tourist products stood
out (Eurostat, 2015). For example, the
increased tourist numbers of British tourists
to Croatia emerged as an opportunity that
Blue Lagoon could exploit. Furthermore, the
growth in different metrics of Croatia’s
tourism industry shows that the country is
ready to receive more tourists from different
parts of the world (Eurostat, 2015). These
factors, when combined, paint a picture of a
market opportunity for setting up a tour
company that would meet the increased
demand of British tourists to Croatia and
satisfy Croatia’s appetite to receive more
tourists
Description of Product/Service
Blue Lagoon’s holiday adventures would
involve sightseeing and bird watching, just to
mention a few. Visitors would stay at
different villas, depending on their
demographic profile, off the coast of
Dalmatia. The picture below shows this
location
Figure 3: The Croatian tourism destination of
Dalmatia (Source: Demes, 2015)
Blue Lagoon would also offer trips and
excursions to some of the most adventurous
locations in Croatia, such as Mount Biokovo.
The same adventures would expand to suit
different needs and preferences of different
groups of customers to include visits to other
tourist destinations in Croatia, such as Lake
Imotski and Pritivice lakes.
Visitors would also take ferries to some
remote islands, such as Hvar and Brac, and
sample the topography of the region, or the
different cuisines offered at these locations.
They could also engage in different outdoor
activities, such as deep-sea diving, bird
watching, and play different “beach games,”
such as volleyball and the likes. However, the
kinds of services that the company would
offer to its clients would depend on the types
of customers who have paid for the trips.
For example, instead of staying at the coastal
villas, older clients could get accommodation
in quieter places in the countryside. In these
locations, they could also engage in less
physically demanding activities, such as wine
tasting, potato digging, and cherry picking
(just to mention a few). Younger customers
could participate in fun music festivals, such
as the Ultra music festival and beach parties
at Zrce beach. Nonetheless, the main travel
destination would be Makarska where
tourists would first visit and get to learn
about Croatia before they move to other
places. Makarska is the promoter’s
hometown.
Industry/Market Analysis
For purposes of undertaking this industry
analysis, the porter’s five-force analytical
tool, which focuses on investigating the
bargaining power of customers, threat of
substitute products, supplier bargaining
power, threat of substitute products, and
the threat of new entrants, will be the main
analytical framework for the external market
analysis. This analysis appears below
• Threat of Substitute Products: The
threat of substitute products emerges
from the fact that tourists could choose
to visit other destinations besides
Croatia. However, according to the
diagram below, the Croatian tourist
market could record more than 62
million guest nights per year (Eurostat,
2015). Compared to other EU countries,
the vibrancy of Croatia’s tourism sector is
relatively higher because Croatia has an
index of 14.1, while EU states have an
(average) index of 5.0 (Eurostat, 2015).
The only EU countries that have a higher
vibrancy index than Croatia are Malta
(18.8), Cyprus (16.9), and Montenegro
(14.7) (Eurostat, 2015). Compared to the
same countries, many foreign tourists
prefer to stay in Croatia, as opposed to
other European Union countries (The
Croatia Tourism Cluster, 2013). In fact,
foreign tourists account for 92% of all
night bookings in Croatia’s tourism
industry (The Croatia Tourism Cluster,
2013). Other EU member states report an
average figure of 44% for all non-resident
bookings (The Croatia Tourism Cluster,
2013). Indeed, as reported in this paper,
most of these guests come from the EU
member states (the number of non-EU
guests who come to Croatia for a holiday
is 11%) (Eurostat, 2015). There is a lot of
potential for attracting tourists from
Britain because the top five sources of
tourists from Croatia are Germany,
Slovenia, Austria, Czech Republic, and
Italy, in that order (Ferguson-Kosinski
and Price, 2012). Because Croatia
outperforms most of its EU rivals, who
offer similar tourist products, it is safe to
say the threat of substitute products is
low.
• Customer Bargaining Power: In the
context of this paper, the customer
bargaining power emerges from an
understanding of the holiday options
available for British and foreign tourists
whenever they want to travel for a
holiday. Their bargaining power
emerges, in this regard, because if they
choose to go to other destinations
besides Croatia, Blue Lagoon would have
a low demand for tourism products from
this market (Doganis, 2002).
Furthermore, if they have many
destination choices, Blue Lagoon could
have to offer low prices for its holiday
packages because it would be
aggressively competing for the same
customers with other tourism markets
(Richardson, 2016). Nonetheless, Europe
remains among the top tourist
destination for British customers
(Barrow, 2013). In fact, according to
Barrow (2013), 80% of British tourists
prefer to visit tourism destinations in
Europe. This fact supports the feasibility
study highlighted in this report because it
shows that there is a high traffic of British
tourists willing to travel to European
destinations. However, the most popular
holiday destinations for British tourists
remain the traditional European
destinations, such as France and Spain
(Barrow, 2013). Other top tourist
destinations for British nationals are the
Irish Republic, Italy, Germany, Greece,
Netherlands, Portugal and Belgium, in
that order (Barrow, 2013). According to
the Usa International Business
Publications (2015), there is a high
growth in the number of British visitors
travelling to Croatia. Relative to this
assertion, TSA (2016) says “Croatia is
among most wanted tourist destinations
to visit this summer for British tourists.
Research done by British travel agencies
reveals that Croatia has placed itself side
by side with big tourist destinations
British travellers want to visit this
summer” (p. 1). Figures reported by
Kaynak (2013) reveal that Croatia
received more than 241,000 British
tourists between January and August of
2013. This figure is a 23% increase in
tourist numbers from the same
destination, compared to the same
period the previous year (Kaynak, 2013).
Some tour operators have recorded
more than a 200% rise in bookings within
the last few years (Usa International
Business Publications, 2015). Prestige
Holidays is one of them (TSA, 2016). The
most common destination, in Croatia,
preferred by British tourists is Dubrovnik.
However, with the abundance of options
that these tourists have, safely we could
say the customer bargaining power is
high. The high number of competitors in
the Croatian tourism industry, and the
elastic demand of hotel clients
emphasise this fact.
• Supplier Bargaining Power: The supplier
bargaining power in the Croatian tourism
industry is low because of strong union
activity that favours employers, as
opposed to employees. For example, the
Association of Employers in Croatian
Hospitality (2016) is among the most
vibrant unions in the industry and it
mostly caters to the needs of employers.
Through such union activity, employers
get economies of scale in business and
benefit from favourable law changes that
increase the ease of doing business
(Association of Employers in Croatian
Hospitality, 2016). Comparatively,
employees often have a weaker
bargaining power because there is an
abundance of workers who are willing to
work in hotels and other tourist facilities
without much hesitation. The high
number of available workers makes it
easy for employers to reduce their
operational costs by paying lower wages.
Indeed, there are adequate workers to
work in their firms. Furthermore, many
tourism colleges and universities in
Croatia churn out qualified graduates
who could work in different tourism
firms (Association of Employers in
Croatian Hospitality, 2016).
• Competitive Rivalry: Despite the
potential that Croatia has in terms of the
diversity of its tourism products, the
country still has an underdeveloped
tourism industry (Demes, 2015). The
scarcity of hotels in many tourist
destinations underscores this fact
(Demes, 2015). Furthermore, some of
those available are substandard (Kaynak,
2013). The entertainment and catering
industries are also sub-standard and
generally look like they are in the infant
stages of development. The slow
development of the hotel industry is
mostly because of the slow transition of
economic ideals from a socialist
framework to a liberal framework
(Demes, 2015). This issue has not only
affected the tourism sector because
other facets of the economy have
suffered the same problem. Similarly,
relative to other developed tourist
destinations, Croatia does not have an
even spread of high-end to low-end
hotels (Demes, 2015). This situation
leaves some segments of the market
unattended and underdeveloped. The
degree of product and service
differentiation is also high because
tourists could easily distinguish the level
of service they could get between
different hotels. Based on these findings,
the competitive rivalry among different
hotels is low.
• Threats of New Entrants: Based on the
nature of the Croatian economy, which is
increasingly diversifying and adopting
liberal economic policies, the threat of
new entrants in the market is high
(Kaynak, 2013). This threat is particularly
high in coastal areas of the country
where new hotels come up every year
(Kaynak, 2013). New investments are
also flowing into the sector through the
introduction of new types of tourism
products (The Croatia Tourism Cluster,
2013). Although the cost of setting up
new hotels is high, there is a relatively
low cost of participating in other sectors
of the tourism market, such as starting
transport companies, catering services,
or even setting up a tourist agency (The
Croatia Tourism Cluster, 2013). The low
inhibitive costs have seen an increase in
the number of players in the Croatian
tourism industry (Demes, 2015). The
same is true for Britain, which will be the
home of Blue Lagoon. Although there are
some established tourism agencies in the
country, there are few, or no, inhibitions
to prevent other people from
participating in the business (Kaynak,
2013). In this regard, there is a high
threat of new entrants. The table below
summarizes the strengths of the five
forces characterising the Croatian
tourism industry
Table 3: Porter’s Five Force Analysis of Blue
Lagoon
Force
Strength
Threat of Substitute Products
High
Customer Bargaining Power
High
Supplier Bargaining Power
Low
Competitive Rivalry
Low
Threats of New Entrants
High
(Source: Created by Author)
Organisational Feasibility
The purpose of undertaking this
organisational feasibility plan is to find out
whether the proposed business could be
organised via management expertise and
organisational competence. It also strives to
establish the motivation of the business
owner to make sure the business plan is
executable. The business owner conceived
the idea of starting Blue Lagoon because he
has a strong interest and passion for the
tourism and hospitality industry.
Having had some experience in this sector,
working as a service agent, the promoter
knows how the business works and hails
from a country that has immense tourism
potential (Croatia). Makarska, which is the
hometown of the promoter, is also a
relatively unexplored tourism market where
many of Blue Lagoon’s customers would
visit. Considering these insights, the checklist
for organisational feasibility is as follows
Table 4: Organisational Feasibility Plan for
Blue Lagoon
Attribute
Finding
(Yes) (No)
Passion and motivation to undertake the
business
Yes
Market understanding of management
team
Yes
Structure of the enterprise (legal form of
operation and risk of operations)
Yes
Availability of employees at different
levels of operation
Yes
Internal and external business principles
Yes
Government relations
Yes
Social, ethical and cultural values
Yes
(Source: Created by Author)
Financial Feasibility
Estimation of Market Share and Sales build
up
From the market research done in section
3.2, this report demonstrated that Croatia
receives more than 240,000 British tourists
yearly (Eurostat, 2015). During the first year
of operation, it is projected that Blue Lagoon
would have a 2% market share of this
population. The business promoter also
projects that the company would have 5% of
the market share of British tourists who want
to visit Croatia for a holiday. This estimation
comes from the understanding that there
would be deliberate efforts to market the
company through different types of media
and establish connections with other
industry players to get business. The returns
for these efforts should materialise in the
second year of operation. The company’s
sales numbers and market share should also
increase as a result (The Staff of
Entrepreneur Media, Inc., 2015). The sales
projections for the proposed business are as
follows
Sales Forecasts
The table below shows the sales estimation
for the first five years of operation
Table 5: Sales Estimation for Blue Lagoon
Year 1
Year 2
Year 3
Year 4
Year 5
£160,000
£184,000
£211,600
£243,340
£279,841
(Source: Created by Author)
Based on the above table, the business
owner estimates that the sales would
increase substantially within the first two
years of operation and thereafter increase
exponentially for each year of operation.
Project Funding
It would cost around £25,000 to start the
proposed business. This cost would cover
the fixed costs and the capital requirements
of the business. The source of funding would
be contributions from family, friends, well-
wishers and personal savings. According to
appendix 3, there would be no depreciation
to erode the capital base.
Cash flow Projections
The projected cash flow for the business is as
follows
Figure 4: Projected Sales Cash flow for Blue
Lagoon. (Source: Created by Author)
A detailed analysis of the cash flow
projections appears in appendix 2
Profit and Loss Projections
In the first year of Blue Lagoon’s operations,
the business owner would conduct a
marketing trial to see if the business can
reach a target of £158,400. To attain this
target, the promoter would charge £550 per
tourist. The monthly target for tourist
numbers would be 24 people (this number
would also include group travels).
Nonetheless, it is important to note that this
target mostly applies to the first year of
operation. After the first year, the business
owner projects that the sales numbers
would rise by 15% annually. The profit and
loss statement shown below gives more
details regarding the business’s financial
flows.
Indeed, as mentioned above, the company’s
profits should rise exponentially from the
second year of operation, after people have
known about the company and the returns
for the company’s marketing efforts suffice.
The total expenses for the same period
under analysis are could fluctuate within a
narrow margin of between £27,500 and
£33,000. Using these figures, the ROEI index
should rise from a low of -4% to 69% within
the same period under analysis. The profit
and loss statement shown in appendix one
highlights these projections.
For the first year of operation, the business
owner intends to work from his apartment.
The equipments he plans to lease include
computers and printers. The capital cost for
the business would be low because of the
leasing strategy, as it is cheaper to lease
equipments than to buy them. The wages
included in the profit and loss statement
would mostly include the salary that the
business owner would get from the business.
Therefore, the aim of adopting a lean
business strategy is to reduce the risks and
costs of running the business, at least in the
first year of operation.
Break-even Analysis
The purpose of undertaking this break-even
analysis is to find out when Blue Lagoon
would make enough money to cover all its
expenses, and start to make a profit (Usa
International Business Publications, 2015;
Demes, 2015). To do so, it is important to
understand the start-up costs of the
business, the business expenses, and how
much money it would cost to run the
business. To come up with the break-even
analysis, the business owner used the
following formula
Break-even sales value = Average fixed
cost/%contribution
The graph below shows the outcome of the
application of this formula in the business
proposal for Blue Lagoon
Figure 5: Break-Even Analysis of Blue Lagoon
(Source: Created by Author)
According to the diagram above, the
breakeven point would suffice when sales hit
£300,000. This figure is inclusive of the effect
of fixed cost and company contributions to
the business plan.
Risk Evaluation
As part of the risk management plan of the
proposed business, this paper has already
shown that, the business owner would lease
some of the company’s assets for short-term
business operations. The purpose of doing so
is to reduce the financial risk of the business.
The risk management plan would also
include insuring the customers when they
travel to Croatia. This insurance plan would
mostly protect them from bad health and
injury.
Resource Sufficiency
The purpose of this section of the proposal is
to determine what resources are available,
or not, for the owners to start the business
(The Staff of Entrepreneur Media, Inc.,
2015). Key factors under review would be
the availability of financial resources,
technical knowledge of undertaking the
business, availability of human capital, the
availability of physical space to run the
business, and organisational characteristics
that would support the business plan (The
Staff of Entrepreneur Media, Inc., 2015).
Details surrounding the resource efficiency
plan are as follows
Availability of Financial Resources
As highlighted in this report, the capital for
financing the business would come from a
combination of personal savings, and
contributions from friends, well-wishers, and
family.
Technical Knowledge of Undertaking the
Business
Computers and stationery would be the
main items leased. Since the promoter is the
only employee during the first year of
business, there would be no need to hire
workers and increase the company’s initial
operating costs. Furthermore, in terms of
technical expertise, the equipments leased
would be easy to use and, therefore, not
require technical knowledge.
Availability of Human Capital
The promoter would be available to manage
all operational processes of Blue Lagoon.
Availability of Physical Space to Undertake
the Business
The business would be physically located in
London. The area of operation would be in
the owner’s apartment
Organisational Characteristics That Would
Support the Business Plan
The business owner would make efforts to
support the new business by forging
partnerships with existing businesses, and
become part of existing business networks
because looking for business in the tourism
and hospitality sectors involve plugging into
profitable networks with stakeholders who
are already in the industry (Tourism Alliance,
2016). The owner would also make efforts to
establish connections with suppliers and
customers, directly. He would also seek
public liability insurance to cover the
customers from injury.
Business Model
Internal Analysis
Resource-Based Theory for developing
Competitive Advantage
The resource-based view is essential to
developing a firm’s competitive advantage
because it views a company’s internal
resources as key to its overall competitive
performance (Kirsch, 2007). According to the
diagram below, the resource-based view
assumes that a business depends on its
tangible and intangible resources to remain
competitive (Kirsch, 2007).
The tangible resources could be a firm’s
profitability, superior accommodation,
luxurious transportation and such resources
(Jurevicius, 2013). Intangible resources could
simply mean a firm’s resources and
capabilities. These resources must either be
heterogeneous, immobile or have VRIO
attributes to become VRIO resources
(Jurevicius, 2013). These resources help to
create the competitive advantage that
companies need to outperform their rivals.
The diagram below explains different tenets
of the resource-based view.
Figure 6:
Resource-Based Theory (Source: Jurevicius,
2013)
The main tangible asset for Blue Lagoon
would be its gross profit numbers. According
to appendix one, the company’s projected
gross profit would be £32,000, £36,800,
£42,320, £48,668, and £55,968 for the first
five years of operation. It is difficult to
undertake a comprehensive comparative
analysis of the competitors’ gross profits
because most tour and travel companies in
Britain are private companies (Harris, 2015).
Therefore, they are not required to publish
their financial statements. However, some of
the giant tour companies in Britain, such as
Thomas Cook make more than 470 million in
profits annually (Hay, 2016). Nonetheless,
Greitemeyer (2002) says tangible assets do
not generally offer a strong competitive
advantage even for established businesses
because a company that has enough money
could buy the same tangible assets, as a rival
owns.
Using this analogy, the main sources of
competitive advantage for Blue Lagoon
would come from its intangible assets.
Quality customer service, brand reputation,
and intellectual property are a few of the
intangible assets that Blue Lagoon could
leverage for better market positioning. Some
of these intangible assets are difficult to
replicate, as the business owner would
develop them over a long time (Nothnagel,
2008).
Furthermore, some of them are intertwined
and interdependent. For example, the
business’s reputation would be subject to
excellent customer service because poor
customer service would ultimately dent the
business’s image (Jurevicius, 2013). Relative
to this reasoning, the business owner
intends to trademark the company’s name
to, possibly, trade it in future. Based on the
focus on excellent customer service, the
company’s name should be a source of
competitive advantage for the business.
The main assumptions of the resource-based
view are that these resources are often
heterogeneous and immobile (Salonen,
2010). However, these assumptions alone
cannot guarantee the potential of internal
competencies to create a competitive
advantage. This is why experts formulated
the VRIO framework to investigate the
sustainability of these competitive
advantages in a business.
This framework was developed by Barney
(1991) as he tried to explain that the
sustainability of organisational resources
often emerges when the resources are
valuable, rare, difficult to imitate, and
difficult to substitute. Stated differently, the
resources that meet these attributes are the
only ones that meet the criteria for
sustaining competitive advantages
(Wernerfelt, 2011). Later years of research
have fine-tuned this area of analysis by
investigating whether organisations are
equipped to benefit from these competitive
advantages through proper organisation
(Jurevicius, 2013).
Based on the resource competencies that
Blue Lagoon has, the best way to improve
the firm’s resource capabilities is by adopting
the lean intervention strategy. Often, many
companies make the mistake of increasing a
firm’s resources whenever their resources
are not yielding as much productivity as they
would like (Grant, 1991). However, experts
warn against this approach because adding
more resources to a system that is already
running at full capacity is a bad idea (Barney,
2001; Grant, 1991). Blue Lagoon could hit
the same point one time in its business cycle.
This is why it is important to understand how
the promoter would improve its resource
capabilities.
As mentioned above, lean intervention
would be the best way to increase the firm’s
resource capability because the technique
focuses on an organisation’s processes and
highlights how the same processes work
towards fulfilling organisational demand
(Hay, 2016). A lean intervention would
uncover different things about the business,
including its purpose (why the organisation
exists), measurement (how the organisation
is performing viz-a-viz its purpose), and
method (how the promoter intends to
achieve the purpose of the business) (Hay,
2016).
Another strategy to improve Blue Lagoon’s
competitive advantage revolves around
digital marketing optimisation. It involves
being smart about where the company is
advertising its products in the digital market
space. Although details about this plan
would be clearer after executing the “clicks
strategy,” the business owner would
consider placing online ads in places where
there is a high potential for a deep customer
engagement and customer loyalty (Hay,
2016). The aim of doing so is to promote the
organic growth of the business through
repurchases and referrals. Since Blue
Lagoon’s competencies mostly revolve
around fulfilling the demand requirements
of its clients, it is important to understand
the value of transactional demand for the
business and the value that lean intervention
could add to the business.
Value demand emerges when a business
receives inquiries from customers that could
potentially lead to new sales (Hay, 2016).
This type of demand differs from failure
demand, which often emerges when
customers inquire about a purchase they
had already made (Hay, 2016). Lean
intervention helps to improve value demand
by freeing up an organisation’s internal
processes, or resources, that go to failure
demand and instead redirects them towards
improving value demand (Hay, 2016). This
strategy would increase the organisation’s
capability to manage its processes, without
necessarily increasing the resources needed
to achieve the organisation’s goals (Barney,
2001; Grant, 1991).
Sources of Business Competitive Advantage
and Sustainability
To analyse the strengths and weaknesses of
Blue Lagoon, it is vital to undertake a SWOT
review of the company to understand its
internal environment. In other words, the
SWOT analysis tool would help the business
owner to identify the sources of business
competitive advantage. It is a practical
framework for identifying the strengths and
opportunities of Blue Lagoon. The
company’s SWOT analysis appears below
SWOT Analysis
Table 6: SWOT Analysis of Blue Lagoon
Strengths
Low-cost of operation
Profitable business
partnerships
Weaknesses
Limited start-up
capital
Opportunities
Expanding the market to other
countries besides Croatia
Incorporating work, wellness
and nature in modern holiday
packages
Threats
Rivalry and intense
competition in the
market
Uncertain status of
Britain in the EU
(Source: Created by Author)
The table below shows how Blue Lagoon’s
competencies appear in the VRIO framework
of analysis
Table 7: Blue Lagoon’s competencies in the
VRIO framework
Resource
Value
Rare
Difficulty
of
Imitation
Difficulty of
Substituting
Durability
5
5
5
5
5
Site and
Location
5
5
4
5
5
Brand
Strength
1
1
5
1
3
Positioning
4
4
4
4
4
Superior
Hospitality
5
3.5
4
3
4
Managerial
Vision
5
4
4
4
5
(Source: Created by Author)
Concepts in Strategy, which could be used
Different researchers use different strategic
tools to develop business strategies. Some of
the most common ones include Ansoff
matrix, BCG growth matrix, balanced
scorecard technique, and Porter’s generic
strategies (among others) (Kuhn and
Johnson, 2013). For purposes of this business
plan, the business owner used the balanced
scorecard technique because it resonates
with the nature of the business and the
context of its operations. Researchers have
used this strategic planning technique in
different quarters of the society, including
government, industries and non-profit
organisations, successfully (Niven, 2010).
Companies that have done so successfully
have used the strategic management tool to
align different business processes to their
strategic goals and vision (Makhijani and
Creelman, 2011). This strategic management
tool argues that managers should look at
their business processes from four
perspectives – the learning and growth
perspective, the business process
perspective, the customer perspective, and
the financial perspective (Makhijani and
Creelman, 2011; Niven, 2010).
The customer perspective emphasises the
importance of satisfying customer needs.
This customer-focused perspective
recognises that customers could easily seek
the services of other service providers if they
are unhappy with one business owner (Kuhn
and Johnson, 2013). Using this line of
reasoning, the customer-focused
perspective looks at customer dissatisfaction
as an indicator of future company decline.
The financial perspective looks at
organisational performance in the context of
how its operational activities should improve
its financial position (Kuhn and Johnson,
2013). Many people consider this view the
traditional perspective of strategic
management (Makhijani and Creelman,
2011; Niven, 2010). However, this approach
changed because the extreme focus on
finances was unbalanced as it could not
measure all aspects of organisational success
(Niven, 2010).
The business process perspective of the
balanced scorecard technique underscores
the need to examine business operations to
achieve organisational success (Makhijani
and Creelman, 2011). The focus on this
perspective highlights the need for
managers to understand how well their
businesses are running and how their
internal organisational processes work
towards meeting organisational goals
(Niven, 2010). Therefore, the business
process perspective is best implemented by
those who understand an organisational
process well and not outsiders.
Lastly, the learning and growth perspective
of the balanced scorecard technique refers
to the need for organisational self-
improvement through the framework of
cultural growth and employee training
(Makhijani and Creelman, 2011). In line with
this framework of reasoning, Kuhn and
Johnson (2013) say that in the current tech-
dependent economy, the need for workers
to adopt continuous learning, as one of its
mantra in employee development is vital.
Proponents of the balanced scorecard
technique argue that learning should be
more than training because the completion
of a training course does not necessarily
mean that learning and growth should stop
(Makhijani and Creelman, 2011; Niven,
2010). Collectively, the four perspectives of
the balanced scorecard technique
underscore some of the main strategic
approaches businesses could use to improve
their performance. However, the customer
perspective emerges, as the best strategic
approach for developing Blue Lagoon’s
strategies because the proposed company is
a service-oriented enterprise and customer
satisfaction is at the heart of its success.
The Customer Perspective
The first step of implementing the customer
perspective approach on Blue Lagoon’s
strategic blueprint involves understanding
the company’s key performance indicators
(KPIs). Blue Lagoon would have five key
performance indicators as follows
KPIs
• Customer retention: Customer retention
refers to the degree to which customers
are likely to stick with a company and do
more business with it. Businesses that
succeed in this regard often bring back
customers and have a steady stream of
clients who would repetitively choose to
do business with the company, as
opposed to moving to its competitors.
Having high customer retention numbers
would be a positive outcome for Blue
Lagoon (Wedel and Kamakura, 2012).
• Conversion Rate: The conversion rate
refers to the likelihood that a potential
customer would do business with a
company. A high quality customer
service would increase the conversion
rate of a business. Conversely, a low
quality customer service would exert a
downward pressure on the conversion
rate (Wedel and Kamakura, 2012). Based
on this analysis, Blue Lagoon would strive
to have a high conversion rate by
implementing effective marketing
strategies and collaborating with the
established businesses in the sector.
• Resolved Issues: Many service-oriented
businesses often register customer
complaints. While the number of
customer complaints could be an
abstract indicator of the quality of
customer service, the number of issues a
company resolves are a better indicator
of how well it is addressing its customer
needs (Kuhn and Johnson, 2013).
Therefore, having a high number of
resolved issues is a good indicator of
excellent customer service, while having
a low number of resolved issues is an
indicator of poor customer service.
Having a high number of issues resolved
would be a primary objective of Blue
Lagoon.
• Complaint Escalation Rate: The
complaint escalation rate is a reliable
indicator of customer service and is an
inverse understanding of the rate of
resolved issues because the failure to
resolve customer issues leads to an
escalation of complaints (Kuhn and
Johnson, 2013). Therefore, the two
indicators intertwine. Wedel and
Kamakura (2012) say that most
companies, which receive a huge number
of complaints and do not realise a growth
in customer numbers, should be worried
about their customer service standards.
In line with this reasoning, experts
encourage companies to investigate their
customer escalation rates and customer
growth percentages (Kuhn and Johnson,
2013). Blue lagoon will strive to have low
complaint escalation rates.
• Cash flow: A business’s cash flow is a
good performance indicator for different
aspects of its operational attributes. At
the same time, customer service is an
important attribute for most businesses,
such that it could mean the success or
failure of a business. This is why
Stillwagon (2015) says,
“If your service is bad, it could drive
customers away, decrease referrals, and
cause potential customers not to complete
purchases. But if it is good, customers are
likely to come back, tell their friends, and
have a big impact on your company’s overall
profits” (p. 14).
A business’s service quality is likely to reflect
in its cash flow numbers. Therefore, cash
flow will be an important indicator for Blue
lagoon’s business success because low cash
flow numbers would mean that the business
is not offering good customer service, while
high cash flow numbers would probably
mean that the business is doing well (Kuhn
and Johnson, 2013). Since the company aims
to provide quality customer service, the
business owner expects to have a strong
cash flow.
Development of Appropriate Business
Model
Blue Lagoon would use a packaged tour
model for the business. In this model, the
promoter would advertise the company’s
products to potential customers as a holiday
package, which includes transportation and
accommodation options. As part of the
package, customers would also participate in
different activities and outings for the
holiday. In detail, the tourism package would
allow customers to enjoy the unspoiled
coastline of beautiful beaches and islands
that dot Croatia’s oceanfront and indulge in
exquisite cuisines that are synonymous with
the country (Demes, 2015).
As part of the outing package, visitors would
also visit historic towns and castles that are
characteristic of Croatia’s heritage (Demes,
2015). Therefore, the packaged tour model
would allow customers to enjoy a variety of
activities when they choose to travel with
Blue Lagoon. By choosing to purchase one
tourism product, customers would enjoy
different activities for one price (Shimomura
and Kimita, 2012).
9 Building Blocks of the Business Model
This section of the report highlights key parts
of the overall business plan that collectively
create the vision of the business model.
These key parts appear below
• Value Proposition: The value proposition
of a business plan refers to the areas
where a business creates value for its
customers (Demes, 2015). Blue Lagoon’s
value proposition would be excellent
customer service. The company strives to
be a leader in this regard because the
industry analysis in chapter three
revealed that, although there may be
different travel agencies that operate in
the same market as Blue lagoon, their
customer service standards are poor
(Singh, 2009). Therefore, Blue Lagoon
intends to fill this research gap through
its value proposition.
• Customer Segments: According to
McDonald (2012), customer segments
are often either single-sided or multi-
sided. Blue Lagoon’s customer segments
would be multisided because the
company acts as an agent for two parties
– tourists willing to visit Croatia and
Croatian service providers willing to
serve foreign tourists.
• Channels: The business channel used by
Blue Lagoon would adopt a bricks and
clicks framework. A bricks and clicks
business model often works when
companies have an online and offline
presence. The business promoter chose
this business model because Blue Lagoon
is a service-centred business and a bricks
and clicks strategy would increase
different ways of serving and engaging its
clients (Shimomura and Kimita, 2012).
The bricks and clicks strategy will work in
a complementary fashion because the
promoter expects the online strategy to
complement the back office work. For
example, when approaching potential
customers through face-to-face
interactions, the promoter would
encourage them to learn more about the
company by visiting the company’s
website. This way, the clients would learn
more information about the company
than what the promoter tells them
through the face-to-face interactions. As
highlighted in this paper, part of the
bricks and clicks strategy involves having
a virtual presence. In other words, Blue
Lagoon would have an e-commerce
website where customers could engage
with the company in real-time. This site
will handle customer complaints and
replicate the same services that
customers could receive if they went
(physically) to the business. Therefore,
bookings, ticket purchases, and product
plans would appear on the website. The
online strategy would also be a
marketing platform for the company
because in the website, customers would
have a chance of looking at the kinds of
destinations they would be going to, the
kinds of events they would be attending
and the kinds of places they would be
staying in. Nonetheless, the promoter
would establish the online presence as a
medium time goal because most of the
company’s resources, within the first
year, would go towards establishing a
strong physical presence of the business.
Indeed, the bricks strategy would involve
having a physical location where the
promoter could undertake most of the
business’s operations. As mentioned in
this report, the physical location would
be the promoter’s apartment. The
business owner would undertake most
logistical operations of the business from
this location.
• Customer Relationships: the customer
relationship strategy involves
“discovering and validating the right
market for your idea, building the right
product features that solve customers’
needs, testing the correct model and
tactics for acquiring and converting
customers, and deploying the right
organization and resources to scale the
business” (Shimomura and Kimita, 2012,
p. 54). As part of the customer
relationship plan, part of the initial cost
of investment would go to market
testing. Feedback would be included in
developing the finer details of the
business plan and its results would be
included in the execution plan.
• Key Activities: There would be three
main activities in the business plan. The
first one would be setting up a physical
location to operate the business. This
plan includes buying equipment, like
computers, chairs, tables, and stationery
(business cards and flyers) for the
business. The second activity in the
business plan involves arranging for
meetings with managers of Expedia to
establish a working partnership with the
enterprise. As mentioned in this paper,
the motive for doing so is to establish a
market for Blue Lagoon’s holiday
packages. By doing so, the promoter
would increase the options of meeting
new clients (to add to the direct
marketing strategy of handing out flyers
to prospective customers). The last
activity in the business plan involves
establishing an online presence for the
company. Here, the promoter would
develop a website that markets the
company and accepts online bookings
and payments. This activity is part of the
brick and click strategy that
complements the overall business plan.
• Key resources: Some of the key
resources in the business model include
the financial resources to buy computers,
stationery and to undertake market
testing. The promoter would also provide
the human resources needed to start the
business during the first few months of
operation.
• Key Partnership: The business
partnership with Expedia would emerge
as a key resource in Blue Lagoon’s
business plan because it would play an
important role in creating a customer
pool for the business. The promoter
would also forge partnerships with
service providers in Croatia who would
offer accommodation, catering, and
transport services for the customers. This
activity would meet the “demand
aspect” of the business plan.
• Revenue Streams: The main revenue
stream for Blue Lagoon would come from
the sales made through the tour package
model. Indeed, a high number of holiday
packages sold to customers through this
business plan would amount to higher
revenues for the company.
• Cost Structure: As mentioned in this
paper, customers of Blue lagoon would
pay £550 to buy a holiday package. This
cost would be inclusive of transportation,
accommodation, and activity costs. Since
the promoter intends to run the business
from his apartment, there would be no
fixed costs for the first year of operation.
Business Plan Review
Overall Assessment of the Business Plan
Product and Service Ideas
Although the Croatian tourism industry is
relatively underdeveloped, as is the case in
many Eastern European countries, many
service providers have focused on providing
traditional tourism products, thereby
shunning the need for creativity and the
importance of providing new visitors with an
experience that they would typically lack if
they visited other destinations (The Croatia
Tourism Cluster, 2013).
Existing London-based tour companies have
also made the same mistake of offering
similar products by adopting a mass-market
business strategy where they do not
particularly focus on one market because
they try to offer different tourism products
to different types of customers, at the same
time (Eurostat, 2015). A review of chapter
three findings reveals that this is the reason
why their service standards have
deteriorated because some of their sales
agents are unable to understand, or
describe, the kinds of services they offer to
their customers well enough for potential
customers to understand (ACS Distance
Education, 2011).
Blue Lagoon offers a different approach to
the same business model because it uniquely
focuses on Croatia and offers unique holiday
packages that are rarely in the market. Since
the promoter hails from the country of
destination, the company would also give its
clients a personalised approach to their
holiday because the promoter knows the
different locations and attractions in Croatia,
which the visitors may like to see. Blue
Lagoon would strive to expand the scope of
tourism products offered to British
customers by offering uniquely designed
tourism products.
Legal Issues
According to Hall (2016), setting up a
business in the UK could be a legal nightmare
for most new business owners. However,
with the right advice, and through a proper
understanding of the legal responsibilities
that a business owner has to fulfil,
registering a business should not be a
problem. There are five main issues to
consider when setting up Blue Lagoon. The
first one is the legal structure of the business
• Legal Structure: According to Hall (2016),
a business’s legal structure has a long-
term implication on the type of activities
it could engage in and the kinds of
operations it should participate in. The
three main types of legal structures that
most businesses could engage in include
the sole trader framework, partnership
framework, and a limited company
framework (Shimomura and Kimita,
2012). The business owner of Blue lagoon
would register the company as a sole
trader type of business. According to the
IBP, Inc. (2015), a sole trader type of
business is the easiest to register, but has
the highest level of personal risk for any
type of business category.
• Licensing: According to Hall (2016), the
UK law may require businesses to apply
for a licence, depending on the type of
industry they choose to engage in and
the nature of business they wish to do.
The establishment of travel companies in
the UK requires licences (Shimomura and
Kimita, 2012). Therefore, Blue Lagoon
would have an operating licence and an
insurance cover for its business risks. This
provision would be included in the
business insurance policy.
• Health and Safety: Blue Lagoon would
assume the health and safety risks for its
clients. In this regard, it would have a
duty of care to all its customers
whenever they are abroad. The
business’s work practice would
incorporate these attributes.
• Business Insurance: Blue Lagoon would
be assuming responsibility for its
customers when they are on holiday.
Since public liability claims could be
expensive to cover, Blue Lagoon would
have a business insurance policy that
would ordinarily be included in the
business insurance policy. This policy
would be useful in saving money during
the crucial first stages of setting up the
business.
• Value Added Tax (VAT) Registration: As
a business owner, the promoter would
have several tax obligations to the
taxman. VAT payment is one of them
because the business owner would file at
least one annual tax return.
Financial requirements
As mentioned in this report, the capital
financing for Blue Lagoon would come from
personal savings and contributions from
friends and family. According to the Staff of
Entrepreneur Media, Inc. (2015), this is the
most common form of equity investment in
the world. In fact, statistics from Canada
reveal that business owners finance 76% of
small businesses, in British Columbia, from
personal savings (The Staff of Entrepreneur
Media, Inc., 2015).
Since Blue Lagoon adopts the same financing
model, the main assumption is that the
business owner assumes most of the risks of
the business. However, at the same time, the
same financing model implies that he is
responsible for the business’s success (The
Staff of Entrepreneur Media, Inc., 2015).
Risk Issues
Starting a new business often comes with
multiple risks. However, the nature of such
risks often depends on the type of business
venture (The Staff of Entrepreneur Media,
Inc., 2015). Five types of risks could
potentially affect the operations of Blue
Lagoon. They include product risk, market
risk, and financial risk (Entrepreneur Press,
2013). Their details are as follows
• Product Risk: A Product risk, in the
context of the Blue Lagoon business plan,
refers to the possibility that the
customers would not fully understand
the kinds of holiday products that the
company would be selling to them. This
is a significant risk for the company
because it would affect its financial
performance (Shimomura and Kimita,
2012). Indeed, if customers do not
understand the company’s products, it
would be difficult for them to part with
their money. Therefore, it is important
that they understand the kinds of holiday
packages Blue lagoon would be offering
them. As mentioned in this report, Blue
lagoon would be selling three holiday
packages that include Spirited Croatia,
Real food Adventure, and Jewels of
Croatia. All these products have different
activities to suit different audiences. The
contents of the different holiday product
are intentionally different because
researchers have said that one strategy
of overcoming product risk is making
sure they appeal to a wide audience or a
big enough market (The Croatia Tourism
Cluster, 2013; Eurostat, 2015; IBP, Inc.,
2015). Since the promoter has
undertaken an effective market research
of the British tourism market, he clearly
understands how the products fit within
the needs of different market segments.
• Market Risk: In the context of this
business plan, market risks often occur
when the targeted market fails not
resonate well with the kind of services
Blue Lagoon would offer (Shimomura
and Kimita, 2012). To overcome this risk,
the promoter has spent a lot of time
investigating where the potential market
would alternatively go to get the same
services as Blue Lagoon offers if they do
not want to do business with his
company. He has also understood the
proper marketing channels that would
appeal to the target markets and
whether they could promote the
business, or not. By evaluating the
impact of these market dynamics, the
promoter effectively minimises market
risk (The Staff of Entrepreneur Media,
Inc., 2015).
• Financial Risk: Financial risks often occur
when a business owner fails to gather
enough capital to finance a business (The
Staff of Entrepreneur Media, Inc., 2015).
In the context of this business plan, the
main financial risk for Blue Lagoon would
be the failure of friends and family
members to support the business by
refusing to contribute to the capital
investment.
This is a risky outcome for the business
owner because he intends to get enough
capital to finance the business through
contributions from family members and
friends. To minimise financial risk, the
promoter would have to subdivide the
business plan into different milestones and
investigate the financial requirements
needed for meeting each milestone
(Entrepreneur Press, 2013). By articulating
these requirements and understanding the
business growth plan, the targeted friends
and family would feel confident enough to
write up a cheque for financing the business.
Marketing matters
The marketing issues in the Blue Lagoon
business plan relate to the process of making
sure that the company’s business products
appeal to the needs of the target market
(Shimomura and Kimita, 2012). As
mentioned in the above chapters, the
promoter would use a direct selling
technique during the first few months of
operation to popularise the business. This
strategy involves printing flyers and handing
them out to potential clients at the
promoter’s place of work. Later, he would
use an online platform to attract customer
traffic to the business. Generally, this
business plan would represent a bricks and
click model discussed in earlier sections of
this report.
Organisational Feasibility
The strength of organisational feasibility
needed to undertake the proposed business
plan comes from a review of the company’s
SWOT analysis. It revealed that Blue
Lagoon’s main strengths were the low-cost
of operations and the potential to create
profitable business partnerships. These two
attributes are at the core of the
organisational feasibility plan because from
a position of low operational costs, Blue
Lagoon could minimise its resource
expenditures and invest the same in
expanding its market (The Staff of
Entrepreneur Media, Inc., 2015).
The profitable business partnerships Blue
Lagoon intends to build with its partners,
such as Expedia, emerge as an important
hub for the business’s growth, as the
company would gain access to a wider pool
of clients and possibly learn valuable
knowledge about the tourism, and the
hospitality industry at large (The Staff of
Entrepreneur Media, Inc., 2015).
Overall Resource Sufficiency
The design of this business plan alludes to
the fact that Blue Lagoon would need
minimum resources to start. In fact, most of
the resources the company would need are
intangible. For example, the conviction of
the business owner to look for business
through direct selling eliminates the need for
incorporating physical resources in the
marketing plan of the business (aside from
the cost of printing flyers), thereby
maintaining the resource requirements at a
minimum. Furthermore, the availability of
the promoter to work as a sole employee
reduces the need for depending on many
people to execute different aspects of the
business plan. Comprehensively, securing
the capital investment of the business would
largely cover most parts of the overall
business plan.
Proposed Plan of Action
The main tasks that underlie Blue Lagoon’s
overall business plan appear as follows
Table 8: Main tasks that underlie Blue
Lagoon’s overall business plan
Task
Number
Description
Week
Dependency
1
Market survey and
feasibility
1 and 2
1
2
Funds arrangement
3 up to
6
1
3
Product and Service
Development
7 to 8
1
4
Infrastructure
Development
9 to 10
1
5
Sales and Marketing
11 to
15
1
6
Establishment of
online Presence
16 to
19
1
(Source: Created by Author)
Gantt chart
Table 9: Blue Lagoon’s Gantt chart
Activity/Week
1
2
3
4
5
6
7
8
9
10
11
12
13
Market Survey and
feasibility
Funds arrangement
Product and Service
Development
Infrastructure Development
Sales and Marketing
Establishment of online
Presence
(Source: Created by Author)
Discussion of Critical Success Factors
According to the Staff of Entrepreneur
Media, Inc. (2015), critical success factors
refer to specific goals that a business has to
achieve to be successful. Therefore, these
critical success factors should be vital to the
organisation’s success, benefit the company
as a whole, be synonymous with a high-level
goal, and have a direct link with the
organisation’s goals. Blue Lagoon’s critical
success factors appear below
• Increase of market share through the
acquisition of new customers
• Promote service-orientation as a key part
of business success
• Achieve high standards of order
fulfilment by improving in-line processes
The above-mentioned critical success factors
are products of key assumptions made by
the business owner. They include the
following
• The success of the business would mainly
depend on increased customer
satisfaction
• Excellent customer service would be the
main competitive feature to distinguish
Blue Lagoon from its rivals
• The business would mainly be service-
oriented
Reflection Questions
Question 1: Research Methods and
Processes
A Reader of your Major project
In the third chapter of the business proposal,
I mentioned that there are different
methods researchers could use to undertake
a business research. The main techniques
included descriptive methods, exploratory
methods, qualitative techniques,
quantitative techniques, and casual research
techniques. Each technique suits unique
research circumstances, or market
conditions. For purposes of writing the
business proposal, the exploratory
technique was the most appropriate
technique to use because the underlying
research was exploratory in nature, in the
sense that it identified a gap in the market,
which Blue Lagoon would fill using this
business plan as an execution tool.
I chose the exploratory research technique
because it helped me to discover ideas and
insights about the proposal. Indeed, when I
started the project, I only had a few points of
references to guide my proposal. Therefore,
I had to find out what works, and what does
not work, for the business proposal.
Furthermore, I needed to conduct a market
feasibility test to determine whether my
business proposal was feasible, or not. This
process required the implementation of the
exploratory research design.
Another motivation for using the exploratory
research design was its open-ended nature.
Concisely, I could use many other research
methodologies for the paper, but I chose to
use the exploratory research technique
because it was not fixated on using one
framework of review to guide the
formulation of the business plan. For
example, I used the exploratory research
technique to define the target market
because I wanted the facts to guide the
selection of the target market and not vice
versa, where the target market defines the
facts.
Therefore, for purposes of finding the most
accurate information about the potential
customers, I used useful market informatics,
such as the demographic profile of the target
market, the geographic segmentation of the
target market, behavioural segmentation of
the target market, price segmentation of the
target market, and the psychographic
segmentation of the same to define the
target market. For purposes of
understanding the potential for market
segmentation, I considered the effects of
important details surrounding the market
entry strategy, such as the presence of
oligopolies, monopolies, competition,
rivalry, licensing laws, and similar factors to
outline my potential customers and rivals.
The market segmentation method was
applicable to the paper because it identified
the specific target market that would use the
services offered by the proposed business.
The exploratory research design also helped
in the identification of the market gap by
identifying unsaturated areas in the Croatian
market where other tour companies have
not fully exploited. The identification of
these areas of business provided the
impetus for the introduction of Blue Lagoon,
as a viable business, to fill the market gap.
These techniques helped me to get a
comprehensive understanding of the
research context and set the framework for
the completion of the other sections of the
business proposal.
My Future Employer
My choice of research methods highlighted
my interest in having an open-ended
approach to addressing the research
problems. I believe this approach is an asset
to any employer because employees should
not have closed-minded approaches to
solving organisational problems, especially
when they occupy decision-making
positions. My skill in this regard manifested
through the justifications for using the
exploratory research technique, which
advocates for an open-ended nature of
gathering facts and information.
Question 2: Literature and Sources
Most Important Literature Sources
I used secondary research data as the main
source of information for the business
proposal. The preferred sources were books
and journals.
Why are these Sources Important and
Fundamental to your Work?
For purposes of writing the business plan, I
chose to use secondary research findings to
formulate the business proposal because I
wanted the business to be as practical as
possible. Using primary research information
to do the same would have consumed a lot
of time and, based on the international
nature of the business plan, would have
been impractical to do, considering the
minimum resources available to finish the
business plan.
Therefore, secondary research sources
emerged as the best research materials to
use for the study. The sources were
important and fundamental to my work
because it helped in the clarification of the
research question and the definition of the
business problem. I believe that this type of
research source is important in the
clarification of research information because
it defines the research focus and provides
valuable information that may be used in
future research.
The justification for the use of the secondary
research sources emerged from the above
advantages because I needed a reliable
source of information that would provide me
with a holistic analysis of research
information needed for the business
proposal. Furthermore, different aspects of
the proposal required research of a wide
scope, which I could not practically do using
primary research.
For example, when conducting the industry
analysis, the secondary research sources
that I used in the paper were useful in
providing the comprehensive scope of
information concerning the Croatian and
British tourism industries. Furthermore,
using the secondary research sources, I
discovered different facts underlying the
development of the business plan. Some of
these discoveries were common knowledge
for me, as a person who has worked in the
tourism and hospitality industry, but the
secondary research sources helped to affirm
some of them.
The use of secondary research information
also gave me a deeper insight regarding the
market trends and consumer behaviours of
British tourists, which were pivotal to my
conception of Blue Lagoon’s operations and
the potential it had to attract new
customers. For example, tourism experts
revealed that many people who use
specialist tourist travel agents would use the
same agents again. The researchers also
revealed that many more of the same
customers would use direct tour operators,
or general travel agents, when booking a
holiday trip abroad (Bhatia, 2012;
Entrepreneur Press., 2013).
Comprehensively, the secondary research
helped me to identify the growing uptake of
tourism products in Croatia, and the
business opportunities that emerged from
improving the quality of service delivery in
the market. In this regard, I understood that,
by developing holiday packages to Croatian
destinations where most British customers
have not visited, or would not visit if they
chose to use other tour companies, Blue
Lagoon would be the “go to place” for
tourists who have a wild spirit of adventure.
Question 3: Your Knowledge
Key Areas of Knowledge I have Gained from
Undertaking the Research
The key areas of knowledge I have gained
from undertaking the research include
conducting internal and external market
analysis, developing workable marketing
strategies, developing effective business
models and understanding the legal
considerations for starting new businesses in
the UK.
Why are these areas Important to you?
The above-mentioned knowledge areas are
important to me because they outline key
considerations for starting a business. For
example, I identified the packaged tour
model as the best business model for Blue
Lagoon by understanding the process of
developing effective business models.
Within this business model, the goal of Blue
Lagoon was to provide its clients with a high
quality tourism experience that would make
them appreciate the beauty of Croatia’s
natural and cultural assets.
The packaged tour model also gave me an
opportunity to expand the scope of tourism
products offered by Blue Lagoon in Croatia
by including “rare” tourism activities like
cherry picking, wine making, and fun
festivals for different types of target
markets. This way, the company would not
only provide an unforgettable experience to
its clients, but also provide a sustainable
source of livelihood for Croatians who would
be working as tour drivers, caterers and such
like jobs.
By developing the business plan, I also
learned new information about the legal
ramifications of starting a new business in
the UK. This area of analysis was important
to my conception of the legal aspects of new
business development because it helped me
to understand my responsibility as a
business owner and the legal responsibilities
required of different types of business
entities. This experience was particularly
informative to me because I often thought
the legal responsibilities of new business
owners were complex and intimidating.
However, after learning the legal obligations
of starting Blue Lagoon, I have finally
understood that registering a business
should not be a problem for anyone.
Concerning the process of undertaking the
internal and external market analyses of Blue
Lagoon, I also had an opportunity to apply
different analytical tools in an area of
industry that I was familiar with – tourism
and hospitality. The SWOT analysis tool was
useful in undertaking the internal
environment and analysis, while the Porter’s
five-force analysis tool was useful in
undertaking the external market analysis. I
have always used these tools theoretically,
but applying them in a real business setting
gave me a new experience of doing so
because I found the process to be realer for
me and, frankly, more interesting. I had the
same experience when developing the
marketing strategies for the new business
because I have worked in the tourism and
hospitality sector for many years now and it
was interesting to apply strategic analysis
tools in an area that I was familiar with.
Question 4: Your Learning
What are the most important Aspects of
Learning that you have gained from:
Undertaking the MBA Program
The most important aspects of learning that
I have gained from undertaking the MBA
program include how to use reasoning skills
in business development and how to apply
communication skills for my professional
development. Concerning the latter, I have
learned useful information, such as the
importance of using professional language
when developing business plans and
strategies, when formulating, or developing,
reliable research work.
Through my interactions with my professor,
I have also learned the importance of
participating effectively in discussions and
comprehended the importance of positive
engagements with other members of the
academic space, who would contribute to
the exchange of ideas. I have also improved
my reasoning skills by undertaking this
project because I used different models and
theories to develop unique aspects of the
business proposal. The business model
formulation highlights the development of
my reasoning skills, which I learnt from the
entire process.
Following through Your Research
Following through the research, I developed
a good grasp of enquiry skills and
information processing skills, which were
essential in my overt understanding of how
to develop a workable business plan. My
enquiry skills emerged throughout the
period of developing the business plan
because I often asked relevant questions
about different aspects of the proposal and
the possibility that they would all fit in one
cohesive business blue print. Using this
important aspect of learning, I identified
problems and plans of actions that formed
part of the business plan. The use of
information processing skills also helped me
to use the information I received from the
secondary research sources effectively.
Applying what you have learnt in your
Major Project
When writing the business proposal, I came
to understand that writing the plan involves
some level of creativity. This was especially
true when developing the holiday products
because I had to develop unique tour and
travel packages that the customers would
not easily interpret as an imitation of what
other travel companies have to offer.
Therefore, the process of developing the
business proposal was not to apply existing
business concepts only; instead, it
demanded some creativity from the business
owner.
Question 5: Critical Thinking and your Ideas
When evaluating research information
about the business plan, I came to learn that
the UK tourism and hospitality industry is a
cutthroat sector, fuelled by the high number
of players in the industry. For example, from
the analysis, I discovered that Blue Lagoon
would be fighting for customers with
hundreds of other companies that offer
similar services. This was just an abstract
statement showing the high level of
competition that characterised both the
Croatian and British tourism industries. For
example, I found that the Association of
Croatian travel agency had more than 220
members who offered the same logistical
services as Blue lagoon intends to do.
Most of the companies were private
enterprises, or privatised recently, because
of the ongoing trend to liberalise Croatia’s
business environment. Most of these
companies undertook ground operations by
organising tours, excursions and cruises for
different types of clients. However, I realised
that this category of travel agencies was not
the primary competition for Blue Lagoon,
although they could fight for some of the
company’s clients. This is why I did not
include their effects in the paper. Instead,
the primary competitors for Blue Lagoon
were UK-based tour companies that offered
logistical travel services to British clients who
wanted to visit Croatia.
Concisely, I found that many tour companies
in Britain offered logistics services to tourists
travelling to different destinations around
the world. While the services offered by
these companies varied, their levels of
service quality differed across the spectrum.
A handful of these travel companies are in
the UK. The major ones included Croatian
Villas, Completely Croatia, Transun, Balkan
escape, Footsteps in Croatia, Cookery
Workshops, in Makarska, G Adventures, and
Affair Travel (Visit Croatia Tour Operators,
2013). The major travel agencies highlighted
in this paper showed the high level of
competition that characterised the tourism
industry because these companies have an
established client base and have many years
of experience in the industry.
Despite the discovery of the high level of
competition in the sector, I found a market
gap in the varied levels of services offered by
these companies. In other words, I found
that the competitive business strategy for
Blue Lagoon would be in attracting and
retaining customers who value quality
services.
Furthermore, with the quest to collaborate
with some of the most experienced travel
agencies in the country, such as Expedia,
Blue Lagoon could provide the most updated
and relevant travel information and logistical
services to its clients. By focusing primarily
on the Croatian market, and being a
Croatian, I believe I have sufficient
knowledge of the market, which I could use
to develop a workable business plan.
Therefore, this strategy aligns with the
marketing strategy of positioning Blue
Lagoon to as a company that provides quality
services.
Question 6: Barriers Met
What were the main Barriers your were
faced with when:
Undertaking your Research
When undertaking the research, I
encountered several challenging issues that
revolved around exploiting the existing
opportunities that Blue Lagoon had to offer.
For example, when undertaking the
research, I found out that the current lack of
leaders in the Croatian tourism industry
poses an opportunity for Blue Lagoon to
create a name for itself as the most
preferred travel company for British and
foreign tourists who wish to visit Croatia.
However, the methodology for doing so, or
meeting this goal was unclear. Nonetheless,
this difficulty did not negate the fact that
Blue Lagoon had an opportunity to develop
a dominant presence in both the British and
Croatian tourism markets, from a demand
and supply perspective.
In the same process, I also found out that
there were new opportunities available to
expand Blue Lagoon’s primary market
beyond Croatia. These opportunities also
included expanding the scope of tourism
packages the company could offer. Lastly,
the company could also cash in on the trend
towards incorporating work, wellness and
nature in modern holiday packages.
This opportunity inspired the development
of the holiday packages, as we saw through
the inclusion of work-related activities, such
as farming, in some of the company’s holiday
packages. Although I developed unique
holiday packages, I was not sure about how
well these packages exploited the existing
opportunities available for Blue Lagoon.
Furthermore, the changing economic and
political space of Europe, following the
“Brexit” vote made it difficult to predict
(correctly) the feasibility of the proposed
strategies.
Completing your Major project
When finalising the major project, my main
barrier to completion was procrastination
and the differing views between my
professor and I. However, procrastination
was the most dominant issue here because
when writing the fifth chapter of the report,
I believed there was no hurry in finishing the
project because I had completed the main
parts of the business plan.
This problem slowed me down in the last
phase of project completion. Lastly, as
mentioned above, I had differing views from
my professor regarding the direction the
proposal would follow. Although we reached
a consensus regarding most issues, I had to
change different aspects of the proposal to
align with a common view of the business
plan.
Question 7: Your Professional Development
Risk management is the most important
management skill I came to learn from
undertaking the business plan. In chapter
five of the proposal, I identified three main
types of risks that included product risk,
market risk, and financial risk.
A Product risk, in the context of the Blue
Lagoon business plan, refers to the
possibility that the customers would not fully
understand the kinds of holiday products
that the company would be selling to them.
This was a significant risk for the company
because it would affect its financial
performance. Market risks often occur when
the targeted market fails not resonate well
with the kind of services Blue Lagoon would
offer. I had different strategies for managing
each risk.
For example, I managed the product risk
through effective market research. It helped
me to understand how the products fit
within the needs of different market
segments. To overcome market risks, I spent
a lot of time investigating where potential
customers would alternatively go to get the
same services as Blue Lagoon offers, if they
did not do business with the company. I also
understood the proper marketing channels
that would appeal to the target markets and
whether they could promote the business, or
not. By evaluating the impact of these
market dynamics, I had the basis for
managing the market risk.
To manage financial risk, I understood that
the main risk for Blue Lagoon would be the
failure of friends and family members to
support the business by refusing give money
as capital investments for the business. This
would be a risky outcome for me as the
business owner because I intend to get
enough capital to finance the business
through contributions from family members
and friends.
To minimise financial risk, I had to subdivide
the business plan into different milestones
and investigate the financial requirements
needed for meeting each milestone. By
articulating these requirements and
understanding the business growth plan, I
believe my friends and family members
would feel confident enough to write up a
cheque for financing the business.
Comprehensively, I believe risk management
was the most important management skill I
came to learn from the business plan
development because risk is the main cause
of uncertainty in the implementation of the
business plan.
Question 8: Objectives
The main objective of the proposed business
plan was to identify a business opportunity
in the Croatian tourism industry. I believe I
achieved this objective, fully. For example, I
demonstrated that the Croatian tourism
industry has experienced a renewed growth
after the end of the 2007/2008 global
financial crisis. I also explained that Europe is
going to maintain its position as a preferred
tourist destination for different types of
holidaymakers in the western world.
To determine the business opportunity that
exists in the Croatian tourism industry, I also
found that in Croatia and most parts of
Eastern Europe tourism remains a vibrant
economic sector and a significant foreign
exchange earner.
However, the full potential of this sector, in
Croatia, remains untapped because most
people are not aware of the amazing tourist
attractions the country has to offer. Part of
this problem rests in the failure of existing
tour companies and travel agencies to
highlight some of the country’s best tourist
attractions because they mostly focus on
providing traditional tourism products, such
as hiking, biking, ship cruises, deep-sea
diving and similar products.
Throughout the analysis, I also found that I
am in a prime position of understanding the
demand and supply aspects of the business.
My research also revealed that Britain is a
significant tourism destination for different
visitors who come from different parts of the
world. In fact, according to the Tourism
Alliance, 2016), “the UK is the eighth largest
international tourism destination ranked by
visitor numbers. The first seven destinations
are France, USA, Spain, China, Italy, Turkey,
and Germany” (p. 1). Based on this fact, I
could strategically position Blue Lagoon to
exploit the inflow of tourists to Britain.
This strategy would involve attracting
foreign tourists to the business by including
a visit to Croatia as part of their holiday
package. Indeed, most of these visitors also
visit other destinations when they visit
Britain. In the context of the proposed
business plan, I would position myself as a
specialist tourist travel agent in London who
sells different holiday packages to British and
foreign tourists.
Comprehensively, I found that the hope of
fully exploiting Croatia’s tourism potential
rests in setting up an enterprise that could
holistically display and exploit what the
country has to offer. This background
outlined the basis for the formulation of the
business proposal, but more importantly, it
demonstrated how far I achieved my
objective for the business plan, which was to
identify a business opportunity in the
Croatian tourism industry.
Question 9: Findings and Outcomes
The findings of the business proposal show
that Blue lagoon has a relatively strong
opportunity of exploiting the tourism
potential that exists in the Croatian and
British tourism markets. The strategic fit of
the business idea stems from the SWOT
analysis of the business’s internal
environment, which highlights the strategic
positioning of the business owner as a well-
versed citizen of Croatia who understands
the country well and knows the different
kinds of attractions it offers to foreign
nationals. The market feasibility of the
business plan is justified by the fact that the
business would adopt lean operational
strategies, based on the understanding that
the business owner would be the only
employee of the company.
Three important assumptions underlined the
business plan. The first assumption was that
the success of the business would depend on
increased customer satisfaction. The second
assumption stemmed from the
understanding that excellent customer
service was the main competitive feature to
distinguish Blue Lagoon from its rivals.
The last assumption was that the business
would mainly be service-oriented. Overall, I
planned to implement the business plan over
a course of 19 weeks with the main
milestones being the completion of a market
survey and feasibility plan, arrangement of
funds, product and service development,
infrastructure development, sales and
marketing, and the establishment of an
online marketing platform.
The findings I derived from this project are
useful to my academic pursuit, as a master’s
student, because they gave me an
opportunity to evaluate my competency in
merging theory with practice. Here, I could
evaluate how well I performed in this regard
through a review of my business proposal
with my instructor. The completed business
proposal would also be useful to other
students because they would have another
example of how to develop an effective
business plan. More importantly, it would be
useful to students who want to start a
business in the tourism or hospitality space
because most of the contents of the business
proposal relate to this field.
The outcomes of this project are also useful
to my future employer because they would
have a platform for evaluating my skills in
project management. Indeed, through my
work, they would have a better
understanding of my organisational and
project development skills. For example, in
the last chapter of the business proposal, I
developed a Gantt chart to show how I
would achieve different milestones in the
project and when I would do so. In the same
chapter, I outline different project
milestones that include product and service
development, infrastructure development,
sales and marketing, establishment of online
presence, market survey and feasibility, and
funds arrangement. Since I believe I did a
good job on the business proposal, I am
inclined to believe that they would find my
skills useful to the organisation.
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