Assignment 5 :Business plan

Student Name: Mehdi Faraji

Subject: assignment 1

Date:07/20/2016

Vegetus Oasis Ltd; Company Description and SWOT Analysis

When starting a company, it is crucial to give a lot of thought to the naming of the same. The importance of the naming is because the name is the first point of interaction between the entity and its potential clients. It is the first step in the advertisement of the company products. Therefore, the name should portray the unique value or quality that the business entity offers in comparison to the competition. Keeping that in mind, the name of the Non-Alcoholic Beverage Company will be Vegetus Oasis Limited. Vegetus is Latin for fresh and vibrant, vigorous or lively. This name is befitting because Vegetus Oasis Limited will be in the organic juice business. I decided on Vegetus since our products will not only be fresh but also invigorating to our clients. Oasis is a term used to refer to a fertile location in a vast stretch of arid land. Alternatively, Oasis also means a place of refuge where one can retreat to escape a usually annoying situation. Therefore, in the desert of conventional foods and juices developed through chemical farming, Vegetus Oasis Limited will be an oasis of fresh organic juice.

The mission statement is one of the most integral parts of a company from the moment the business idea is conceived. It is because the mission statement provides a clear outline of the chief objective of the organization as well as outlining the potential target market that will be consuming the products. If the mission statement is too long, it increases the risk of turning into a combination of both the vision and mission statements. The mission statement is supposed to brief and concise if that is to be avoided. Thus, the mission statement for Vegetus Oasis is as stated below;

“To provide quality refreshment to all those seeking to lead healthy lifestyles while making a difference in the ecosystem and their lives one bottle of organic juice at a time.”

The above statement encompasses all the three major requirements that it is supposed to meet for it to be complete. It states the main goal which is the product, the target market and the unique attribute that distinguishes it from other entities. The main goal is to provide quality refreshments while contributing to creating balance in the ecosystem. The target market is made up of anybody who is looking to lead a healthier lifestyle than they have been previously living. The unique factor of the entity is evident in their product as stated in the statement; organic juice.

There are many alternative Non-Alcoholic Beverages in the NAB section of the beverage industry. They include; sodas, conventional juices, yoghurts, tea, coffee and iced tea. The decision to produce organic juice from the range of all other non-alcoholic beverages was arrived at because it agrees with the long-term eco-friendly vision for the company. The decision was also a smart money move since the market dynamics for the organic juice are less hostile as compared to the other beverages. For instance, entry into the soda production business would require massive capital for the initial investment. The products would also face very stiff competition from Coca-Cola, which is the biggest producer and retailer of soda in the whole world.

According to Statista, the NAB industry is expected to grow at a rate of 3.8% globally. On the other hand, the alcoholic beverage market maintains a steady 2% growth rate. This implies that more people are looking for alternatives to alcohol. Within the organic produce bracket, the United States Department of Agriculture has collected a lot of data from retailers that project a steady, increasingly mainstream market for the products. For instance, in 2012, the reported sales of organic produce were reported to be $28.4 which rose to $35 billion in 2014. Therefore, the potential for growth in the NAB is higher for organic products than it is for traditional soft drinks. Vegetus Oasis will not have to compete for market share with global conglomerates since new markets are coming up each day ( www.statista.com ).

A strategic position refers to the overall approach taken to achieve a given objective. Since Vegetus Oasis is a new company seeking to carve out some market share by differentiating its product, I chose the triangle strategic positioning method. This strategy position is made up of three specific options that are aimed at the same goal; customer bonding. These are;

· Best product- low-cost products which are highly differentiated relative to competing products.

· Customer solution- achieved by reducing customer costs thus making it economical for them to purchase our product strengthens the bond.

· System lock-in- this is where the company seeks to lock out competitors while nurturing entities that offer complementary products. This increases the value of our product in the long run.

For the distribution of the organic juice, Vegetus Oasis will rely mainly on grocery stores. Since the commercialization of organic food products begun, it has become increasingly popular and easier to find an organic products section in grocery stores. Products in this section of shopping outlets include fresh fruits, vegetables, and milk. Enthusiasts of organic food always head to this section. Therefore, it will be prudent to stock the organic juice in the same stores. Apart from that, sports events provide a vibrant albeit seasonal market for all types of beverages. The assumption is that a portion of the sports crowds are partial to healthy living and would be open to the idea of organic juice at these events. The company will wait a while longer before investing in warehouses for online sales. This is to ensure that the immediate physical market is responding well to the products so as to act as a reflection of the online market.

Some of the risks that Vegetus Oasis is bound to encounter as a start-up include;

· Product risk- this is the risk that the goods being produced have no place in the markets they are introduced. This incompatibility is due to a misinterpretation of market data. The company has mitigated this risk through extensive market research and analysis before deciding on organic juice as the product.

· Regulatory risk- this is the risk that a change in government policies might adversely affect the business. The company has mitigated this risk by studying trends in regulations and evaluating the existing bills and ascertained that in the short-term, there is no cause for worry.

· Financial risk- this is the possibility that the company will not be able to raise enough capital in its initial stages. Therefore, it is crucial that before starting out, the promoters of the company should have raised enough funds. To reduce this risk, they can try crowd funding as well as enlist the help of friends and family.

Strengths (internal)	Weaknesses(internal)
· The company has a newly acquired workforce that is eager to impress. · 75% of the staff has at least one professional certification. · The company has acquired the latest technology in the production of organic juice. · Through crowd funding, the company has enough financial resources to see it through the initial stages of the business before they break even. · Company policy has instituted a rigorous training, evaluation and reward system for employee motivation.	· The company workforce is young and never having worked together, teamwork cannot be guaranteed. · Most of the staff is inexperienced since they are fresh out of colleges. · High training cost on the application of the mentioned technology among other tools. · Some of the funding is debt equity. Therefore, the company is saddled with hefty interest loan repayments. · The employee training and evaluation interrupt the normal business operations from time to time.
Opportunities (external)	Threats (external)
· The market studies project a fast-growing market for organic products which augurs well for the growth of the company. · The economy is currently in a good place. As such, the target market should have more disposable income to spend on the products. · There has been a remarkable continuous increase in awareness about the benefits of organic produce over conventional foods.	· Vegetus Oasis is not the only company being formed to cater for the demand of organic juice thus there is some competition for the market. · Worldwide unrest, especially in the oil-rich Middle East, means that the economic stability cannot be trusted to stand. · Recent economic and political events in the European Union are affecting the leading currencies around the world.