Business Model

Discuss About The Organizational Cultural Environmental Factor.

The report will depict a business plan for a new company named Fabworld, which provides beauty products through online mode to its potential customers to the different parts of Australia. In the recent era of globalization, the future of business is actually dependent on the electronic commerce market. People nowadays are unable to purchase their goods and services within a specific time period due to hectic schedule (Joyce and Paquin 2016).  Fabworld is a subscription box business that will be used to facilitate beauty products via e-commerce trends.  Fabworld is aiming to penetrate by develop an extensive product line to cater to different segments of consumers in the market. The start-up will offer various price ranges for subscription for different durations.

The subscription box business will facilitate services to its customers or subscribers, who will pay for the subscribed beauty box on a monthly basis. The beauty boxes with five to six varieties of cosmetic products will be sent to the customers on a monthly or quarterly basis. The subscription box will include five to six ranges of high quality cosmetics of different brands (Toro-Jarrín, Ponce-Jaramillo and Güemes-Castorena 2016). Fabworld will ensure that the potential customers availing the products will obtain within a particular interval of time at a reasonable rate. This is entirely a new concept and is very appealing to the customers. It helps the customers to get an adequate knowledge about the various high quality products, which is present within the subscription box.

The proposed business model is to be based in Sydney for the beauty products subscription services. The concept is really simple and the customers have to pay actually $50 dollars for their box every month. The customers get an adequate knowledge related to the various quality products that are present within the subscription box (Tukker 2015).

The business model helps in focusing on advertising its subscription to their potential customers. The business is actually dependent on the promoting the products through efficient marketing techniques. In addition to this the logistics of the business management should also be adequate to gain maximum profit. The marketing of the products is useful in attracting and retaining the subscribers to create core revenues. On the other hand, proper logistic will facilitate in delivering the elegant beauty boxes to its customers.

Key Partner Providers of the various ranges of beauty products. Logistics (Packaging and Delivery) Developers of the App. Printing.	Key Activities subscriber and brand acquisition Research (subscribers helps in obtaining the information.) Promotion and marketing Content publishing Assembling of boxes	Value Proposition  Styling products and beauty care Sample products and beauty care Personalization of the items Every subscription box includes monthly surprises (Joyce and Paquin 2016).	Customer Relationships Maintaining a cordial relation through pampering and care Gaining customers trust. Discovery of new beauty products Sampling platform for brands	Customer Segments Primary: Women and teenage girls, who are highly concerned with beauty Beauty conscious men and youths. Secondary: beauty salons
Key Resources Intellectual data and customer base Logistics Magazine production Mobile platform and commerce	Channels newsletter and websites e-mails (box delivery) Print magazine and mobile Social media (Facebook and Instagram)
Cost Structure Sales and marketing Development and maintenance of content platform and products Supply Chain (distribution, warehouse and logistics)	Revenue Streams e-commerce or mobile commerce ( Click and buy) Monthly subscriptions Revenue from advertizing space  in the company’s websites Revenue from contents for the sponsored brands is high.

Fabworld is a start-up business and expects to increase their sales. The consumers can easily purchase various high-quality products so that they can easily purchase the high-quality products at a very minimum bargaining price. Fabworld intends to dominate the retail cosmetic market with such pricing that would easily help them to attract the customers, who are on fixed budgets.  Besides start-ups, retailers and brand manufacturers consumers are entering the market at a rapid rate.

Marketing Strategy

In the era of digitalization, online business is growing at a rapid rate. The subscription e-commerce trend is rising at a rapid rate. As per the survey, it has been revealed that more than 15 percent of the shoppers are now subscribing to attain their preferred products on a recurring basis in the form of monthly boxes. The subscription e-commerce business will help in providing the customers, more often the affluent and young urbanites a vey personalized and convenient way to get the products. In the industry, the churns rate is also high as the consumers can easily cancel all the services, if they are unable to attain the best services.

Subscriptions are recently increasing at a rapid rate to buy all the products and services through the online mode. However, streamline media subscriptions is a new concept. More and more customers are increasingly subscribing to avail the e-commerce business in the recent times. This trend has positively affected the industry

Fabworld is focusing mainly on the female market within the age group to 16 to 60.  As per the demographic report, spa goers are mostly female and the male consumers are very low. Majority of the female customers earns more than $35,000.

The affluent section of the society is to be targeted. Australia is a developed country with urbanites. Females are highly educated and earn an adequate amount that they can easily spend on cosmetic and skin care products. The products and service will be for all the beauty conscious people. Nowadays people are so busy that they cannot enough time to go from to one shop to another and explore the market. Therefore, besides the youth and female groups all the individuals are the major target.

The customers are now getting the products from different stores or through the online website of that particular brand (Joyce and Paquin 2016). This becomes very expensive and time-consuming for the customers to purchase after reviewing each and every item from the websites. The major competitors are the retailers and wholesaler of the beauty and skin care products. It is a well-established market so it would be quite difficult to penetrate in the market. Though, this subscription beauty box business is an entirely new concept. The women group would be targeted and provided premium, international, national and niche brands at such a minimum price.

It is actually an online business but its main office would be located in Sydney. The services will be provided to different parts of the world.

Target Customer Segments

Technical feasibility is to be developed to attract and retain the customers. Consumers would buy the products for its benefits and not because of the underlying technology. It is important to evaluate the products feasibility with the help of effective implementation (Sarooghi, Libaers and Burkemper 2015). Effective technology would be helpful in delivering the products effectively to the ultimate user by the planned method.

In the era of digitalization, technology is rapidly changing and increasing at a rapid rate so there is the need for updating the business techniques to survive in the long-run.  Each business requires an effective information system so that they can store their data. Fabworld website will inform all the ideas related to the products and services to their customers but developing an application for the mobile users would be advantageous for the growth of the company. The mobile application would prove to be beneficial as the level of accessibility for the consumers would increase (Toro-Jarrín, Ponce-Jaramillo and Güemes-Castorena 2016). Moreover, the cost of paper newsletter and messages cost would also be reduced.

The subscription business for beauty products involves sub-contract, licensing and partnership with all the international and national brands. The products that are provided in the subscription box will include the mixture of all the different brands. With few of the international brands partnership and sub-contract both will both be involved (Tukker 2015). Licencing may be required for different premium brands of the beauty products. Therefore, combination of all is needed to prepare the ultimate subscription box business model. To make Fabworld the most iconic brand, it is important to develop well-placed and effective e-commerce site for sale of the beauty products.

The option for sales and distribution further involves distributors through which the boxes can be delivered to the ultimate customers (Carayannis, Sindakis and Walter 2015).

Skills required for the development of the business should be well-defined and well maintained. The suppliers of the beauty products should be active and operative in nature to conduct the business activities in a smooth manner (Metalloid et al. 2018). The price of the boxes should be kept low enough to provide maximum satisfaction the customers. Peoper infrastructure is necessary for the achievement of web-based sales. The major elements required to achieve success involves:

• Marketing
• Web design
• Product quality

The laws and regulation related to the business should be properly followed. The legal obligations related to the marketing of the products should be practised and fair enough. The mission statement of the company, when posted in the websites should not discriminate any race, creed or gender. The compliance issues while dealing with the employers should be fulfilled. Each and every employer should feel that they are working in a safe, professional and fair environment (Foss and Saebi 2017). All the procedures and policies would be mention in the company’s website to avoid any future problems.

Competition and Feasibility

Fabworld would only sponsor and delivers such products that would be safe and beneficial for the customers. To avoid any kind of scrutiny, the brands should be proactive enough while creating to the environment. Fabworld would also have a certification process that will be ensure the customers. In the current business environment, it is important to follow all the ethical issues and policies. Fundamental ethical issues for the business often include conducting the business with integrity. The issues also include empathetic decision-making, accommodating diversity and government consistency.

The major goal of the Fabworld is to be the leader in the e-commerce market in distribution beauty subscription business. It sis to be assumed that the current interest rates are as follows:

	YEAR 1	YEAR 2	YEAR 3
Plan Month	1	2	3
Current Interest Rate	10.00%	10.00%	10.00%
Long-term Interest Rate	10.00%	10.00%	10.00%
Tax Rate	30.00%	30.00%	30

The current staff should be sufficient for ascertaining the three years of operations. It will be require additional hiring while carrying the operational activities of the business.  Total long-term and current assets would fulfil the 86% of the overall start-up requirements. The start-up funding includes the combination of investment and long-term commercial loan (DaSilva and Trkman, 2014). The start-up cost would require legal fees and cost for the transformation of the business. This start-up cost also includes web development, office supplies, telephones and internet lien instalments, desk chair, shelving units for inventory storage and computer systems. The start-up expenses entire costs involve $ 11,200 and the total funding includes $80,000.

The profit and loss statement of the proposed business plan of Fabworld is evaluated for three following years (Souto 2015). During the first year of the business, the company may incur a loss of around 37%. From the second and third year of the business, the company will incur profit of around 11% to 12% respectively. The break-even analysis showcased that the $24,248 would be needed to reach the break-even point.

The major sources of financing includes own capital and long-term loans or borrowing would be required.

It would be actually the responsibility of the entrepreneur to maximize the business values through profitable and marketable products. The failure of the products leads to the failure for the entrepreneur. Fabworld would require high skilled human resources that could lead to optimize the profitability and marketing of the product (Schaltegger, Hansen and Lüdeke-Freund 2016). There are important gaps that are to be required to be filled. This would include customer service representative, advisory board and distributor manger.

As it is a start-up business related to the beauty products. I have already worked as product manager for a famous cosmetic product. Therefore, I have already acquired a lot of knowledge for the products. I have experience in managing staff and obtaining their best performances.

Technical Feasibility and Information System

Fabworld is a privately held company and a sole proprietor business with 100% ownership of the company. Being the president and founder for the product major responsibilities is to be fulfilled to achieve the desired goal. The company would also involve operational mangers, finance managers to get the full insight of the industry and proper knowledge of the products and services

The manpower required would be the entrepreneur, Manager, Programmer, customer service and distributor of the products.

	Year 1	Year 2	Year 3
Entrepreneur	$36,000	$42,000	$50,000
Manager	$36,000	$42,000	$50,000
Programmer	$30,000	$30,000	$30,000
Customer service	$27,500	$30,000	$30,000
Distribution	$27,500	$30,000	$30,000
Total Payroll	$157,000	$174,00	$190,00

Fabworld is entirely a new and innovative concept and the subscription business model enables the people to use the premium and international brands to achieve maximum growth and delivery of the boxes. The growth strategy of such kind of business can be through market penetration and word of mouth referrals (Klang, Wallnöfer and Hacklin 2014).  Through positive online reviews the customers can easily ascertain the views of the international product and subscribe for the services.

In future, the beauty subscription boxes can be made personalized for the customers. They would be able to choose few of the products themselves (Bocken et al. 2104). This would be helpful in providing maximum satisfaction to the customers. The subscribers in the recent times want something innovative and new. The monthly gift along with the beauty boxes would be helpful enough to attract and retain maximum customers.

References

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