Competitive Analysis and Strategic Assessment
The training market is quite big and there is a need to carry out effective rational estimates that is based on research and economic analysis. The market is made up of both local and international organizations so as for a firm to gain a competitive advantage over in an industry that is quite dynamic. The goal is to develop various strategies that and marketing tactics that will ensure that Back 2 Basics is able to attract customers and to fend off competition in the market. This will enable the firm to use its strengths to overcome weaknesses and use various strategic positions in to develop niche that ensures its productivity and profitability. The adoption of such approaches will ensure that the firm is able to face its challenges while developing clients abilities and training them to achieve their personal goals. it also requires adapting to changes occurring in the market so as to remain competitive and grow the business by utilizing the various opportunities identified in the market. To achieve these effective funding options are needed to keep the new firm afloat while it establishes its products, before it breaks even and even a continuous endeavor to maintain profitability.
Competitive analysis
The training market is characterized by various local, regional and international training organizations that are well established and which offers various products such as personal training and corporate training. The market is also fragmented and complex such that no key company can claim dominance for any specific segment (Bersin 2014). The existing training companies that poses stiff competition for Back 2 Basics as a new entrant operate in a very dynamic market where intensity in competition is driven by the larger firms that are able to offer variety of products at low cost while operating over large areas. This enables them to achieve economies of scale. To sustain this competition, Back 2 Basics has to integrate the traditional solutions or corporate training with other products such as personal training programs so that it can have a large pool of products from which new and potential customers can select from. In addition, major firms have blended such products with online based sessions and virtual training so that to beat competition. The market also has customized products or solutions which address the individual customer training requirements especially among the corporate clients.
The technical segment forms a major part the market share and it has been dominant in the industry over the recent years. This implies that the Back 2 Basics Company has to pay a lot of attention and lay emphasis on the technical segment in order for it to start on an effective and competitive pace. There is need to consider that the rise in number of training firms around the globe is based on capitalizing on the opportunities presented by this segment to remain competitive and profitable. This is informed by the fact that many organizations around the globe that emphasize on employee personal development have focused more on technical skills development so as to improve productivity and operations which are key factors in driving growth and profitability. The expansion of operations by firms in various regions especially among the developing countries creates opportunities for training individual employees which will bolster the growth prospects of markets (Bersin 2014). Moreover, the training market is prone to many new entrants which can present stiff competition for the firm. This means that Back 2 Basics Company has to employ the best marketing strategies in order to compete for potential customers in a highly diversified market.
As noted above factors affecting the competiveness of a training business includes the competitors, the products and customers. There is need to constantly study the market environment to determine the needs of customers before providing any product for them to purchase. Back 2 Basics company has to determine the products the customers are willing to accept, whether personal training or corporate training for specific employees. The acquired customers may also have changing preferences since their expectations keep on shifting in an effort to attain personal development goals. Corporate clients especially management may want to acquire more technical skills that are individually focused. Products also may influence the firms’ competitiveness since personalized programs can become obsolete when over taken by any technical developments (Bersin 2014). Competitors may embrace improved programs which attracts customers to the loss of Back 2 Basics Company. If the products are not able to meet the needs of the clients or if they are outdated, the competitive strategy adopted may fail to impress. What is needed is an adjustment of competitive strategy so as to offer the best products at reasonable prices or introducing new versions of advanced programs at higher prices. As a business is considering the competitive strategies that can offer advantages in the market, knowing the competitive environment helps the firm to consider factors which can influence such strategies (Allen, 2012). This enables monitoring of major variables and adjusting of any action to tap into the opportunities and advantages.
Marketing strategies and tactics
Back 2 Basics needs to come up with ways of ensuring that it can attract the potential customers in the market. To popularize its products it will use advertising as a major strategy. Advertising will involve the use of the social media in reaching out to those potential customers who may need the products (Rothaermel, 2015). Such customers are therefore able to get information concerning the product, hence, can make informed decision concerning becoming a member. Establishment of Back 2 Basics website is an important advertising tool. The potential customers will be able to visit the website and get authentic information concerning the products sold and products used in training by Back 2 Basics. In fact, they can make inquiries concerning Back 2 Basics and the products available. Besides, they are in a position to make purchase requests through the website. According to Hollensen (2015), the use of media to carry out a company's advertisement has proven to work for any serious company. Such is because many people are fond of watching their television sets and listening to the radios. Moreover, having an advert that follows a popular program in the media will ensure that more potential customers get to know about the new product in the market for them to make purchases.
Apart from marketing, Back 2 Basics will need to evaluate the process set by other companies to ensure that their products have favorable prices to attract potential customers. The customers from other companies will be attracted to purchase products that are cheaper compared to what they are used to buying from the competitors (Mullins, Walker & Boyd, 2012). To achieve this, Back 2 Basics will need to cut on its cost of production so that even if the products are sold cheaper, profit target is achieved. The quality of products sold by Back 2 Basics is another important strategy to be explored. Having quality products compared to the competitors will attract customers into purchasing the new company's product. Customer service provision is also an important strategy for the new customer. Treating the new customers well while making purchases will ensure customer loyalty and attract even more potential ones in buying Back 2 Basic’s products.
Strategic positions available
There are various strategic positions available that the company will utilize to achieve growth and profitability. A reasonable pricing strategic position will attract potential customers who are sensitive to prices. Such prices will not comprise quality so that to maintain the newly acquired customers. Another strategic position is that Back 2 Back will be offering a variety of products as new firm and this presents an opportunity for those potential customers who wish to taste of new products in the market. The product quality will aim at getting approval of new customers and thus gaining their loyalty which will create a strong customer base. A demographic strategic position will involve targeting customers whose training needs have not been satisfied which will ensure exploitation of the opportunity presented by non-served or underserved clients. Providing an alternative product to the ones already existing is a strategic position that ensures the attraction and retention of customers.
Risk faced by Back 2 Business
The risks faced by this business involve insufficient capital and cash flow, cut-throat competition and attraction of best talents. Insufficient capital means that the business may run out of cash flow stifling its operations or making it unable to pay debts. This can also force the company to seek for expansive debts which can make its profitability to be untenable. Cut-throat competition from new and entrants or already established firms may make adopted marketing strategies and tactics to be unproductive by not attracting customers. This can lead o losses and closure of this venture. Due to limited capital the firm may be unable to attract the best talented employees in the labor market which can compromise on quality of products introduced into the market.
Funding, Operating Costs, and Break-Even Analysis
The initial funding of this new venture who be obtained from venture capitalists and the small shareholders whose contribution will be vital. As a private company, the firm will raise additional capital through selling shares for its expansion once its operations have picked. The venture capitalist will be individuals or banks who have agreed on this business proposal.
The operation cost plan for Back 2 Basics involves allocating 70 percent of the budget to fixed and variable costs including rent, insurances cost, legal costs and administrative costs. The variable costs will also involve marketing and sales expenses and commissions. For the purpose of cash flow the part of the funds will be set aside to ensure that operations are on-going. Losses for the company are expected for the first two months of operations and revenue expected to increase in the subsequent month, a point at which break –even will be reached.
Conclusion
The Back 2 Basics venture will venture into the training market with an aim of exploiting existing opportunities for profitability and growth. The market analysis presents various areas the company will focus to gain competitive edge against established firms and new entrants using appropriate marketing tactics and strategies. The various strategic positions will enable the success of the marketing strategies.
References
Allen, K. R. (2012). Launching new ventures: An entrepreneurial approach. Mason, OH: South-Western, Cengage Learning. 295-296
Rothaermel, F. T. (2015). Strategic management. New York, NY: McGraw-Hill.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education
Bersin J.,(2014).Skillsoft Acquisition of SumTotal: Corporate Training Market Disruption? Retrieved from: https://www.forbes.com/sites/joshbersin/2014/10/01/skillsoft-acquisition-of-sumtotal-corporate-training-market-disruption/#1a7a23f0781a
