Business Analysis Project of Feasibility

The suggested Zak’s Confectionary business will be overseen by the extensive and competitive confectionary and chocolate industry. The national Confectioners Association (NCA) shows that the end user demand for chocolates has been on the increase due to the health benefits of the products. Chocolates have distinctive minerals and anti-oxidative properties that lower the chances of consumers getting cancer or heart attacks. This progress has brought in new players in the confectionary industry. Chocolate is now considered as a luxurious commodity and healthy snacks for consumption, thus leading to an upsurge in the global demand for the product. There have been a significant number of new players in the industries anxious to get a share of the massive market that is hard to satisfy with the current organizations.

The global chocolate industry has been expanding due to the increased demand for the products. By the end of 2016, the worldwide chocolate market experienced annual sales of approximately 98.3 billion dollars (Filieri, 2013). This return signifies a 4 percent yearly growth rate. The chocolate industry in the U.S, where Zak’s Confectionary will be situated, is relatively increasing due to the high demands of consumers which have expanded the market share to over 86% (Bharucha, 2016). The U.S exports majority of its confectionary products to all parts of the world and thus helping the economy of the country by generating a lot of revenue through exports and local sales.

Competition Analysis

Many established companies in the chocolate market industry have a consistent large share of the supplies. Some of the organizations with the largest annual Net sales include Mars Inc, Ferrero Group, Mondelēz International, Hershey Company, Nestlé SA, Meiji Company Limited, and Ezaki Glico Company Limited, just to mention but a few (Squicciarini & Swinnen, 2016).The leading producer in the confectionary industry is the Cadbury Company which has a global market share of approximately 70% (Bharucha, 2016). Some of the leading brands for the company include Éclairs and Dairy Milk chocolates. Mars and Hershey companies are two of the most competitive players in the U.S chocolate industry because of their large clientele base in the country.

The confectionary industry has a huge market in the world and the key players can not all satisfy the customer needs that keep rising. Therefore, there is at least 40% of the chocolate market that lacks steady supply patterns. Close to 73% of the demand for chocolates is in the urban market (Tickle-Degnen, 2013). Therefore, the products have a price sensitive market that allows for producers and suppliers to increase their sales by constantly having varying prices for the commodities. As a result, the presence of the big companies like Nestle, Mars, and Cadbury does not lock out any new entrants into the confectionary market because of the large consumer market.

Target Market

The target market for Zak’s Confectionary is the untapped section of consumers who do not have ample time to go to shopping malls. Zak’s Confectionary Company will be able to deliver the products to clients who will make online purchases from the company website. A majority of the chocolate products from companies like Nestle and Mars are mostly available in malls which are situated in the urban regions. Thus, the demand for some of the consumers in rural areas is not met due to lack of supply (Squicciarini & Swinnen, 2016). Zak’s Confectionary will, therefore, have the opportunity of targeting this market share which is available.

Chocolate consumers will order online for the products that they wish to have, and the company will deliver them to the outlets. Zak’s Confectionary will establish delivery outlets at almost convenient places in all the states of the United States. The target market for the company will spread to the neighboring countries of the U.S where consumer demands for chocolates have not been met by the leading organizations in the confectionary industry.

Product, Price, Place and Promotions

Zak’s Confectionary will produce and supply delicious chocolates and confections for consumers in the U.S and its neighboring countries. The company targets the unique needs of the clients, and therefore it will strive to manufacture products according to customer demands and expectations. Zak’s Confectionary is also targeting low-income earners, and that is why the price for the chocolates will be relatively affordable as opposed to the prices of other competitors. The confections and chocolates will be packed in different sizes so that there is an increase of purchases.

The company will make use of e-commerce through an online purchasing website where clients will make their orders and purchases. This choice of purchasing platform will increase the number of sales because it saves time and money for customers who want to receive the products in the comfort of their offices, houses, or schools. Zak’s Confectionary will have convenient delivery outlets which are available to all their clients. The company will also have promotion services like gift coupons and free delivery services for customers. The company will be rewarding loyal customers with coupons as a way of appreciating their consistency in buying their products. The promotions will be substantial because they will be retaining the existing customers and attracting new ones.

Market Strategy

There is stiff competition for market share in the global chocolate industry. Companies have been able to maintain their position in the industry for many years because of different market strategies (Hu, 2015). Therefore, Zak’s Confectionary must establish a comprehensive market strategy for the business to be successful. The company’s marketing strategy will be utilizing resources available from the internet because it is going to have online advertisements and sales. The target market for Zak’s Confectionary will be the section of the market that has not been satisfied by the supply from the other producers. Individuals who are far from shopping malls and those who want to shop at the comfort of their homes, schools, and workplaces will be the majority of the customers for Zak’s Confectionary.

The company will have a unique product packaging service for their clients. Customers will have the privilege of designing the wrapper of the chocolates that they order online. Therefore, the personalized product packaging system will enable customers to suggest names or photos of people that they want to be on the chocolate covers. Zak’s Confectionary will differentiate its products from those of competing companies. The business will also offer promotions to loyal customers during special occasions like Valentines and Christmas days. During the events, the company will give clients surprise gifts whenever they make purchases that amount to certain quantities. Zak’s Confectionary will also have an online advertisement platform which will target customers from different geographical experiences. The clients will have an open forum for discussion where each of them has the opportunity of expressing their personal experience with the products of Zak’s Confectionary. The company will have a link which customers will use to suggest the products to their friends and families.

Management Team Skills and Company Structure

The management team at Zak’s Confectionary will go through professional training on online marketing and sales. The training will give the team an extra advantage over their competitors because of the expertise in advertising and customer relations that they will possess (Baker, 2014). The team will also have significant managerial skills like assertiveness, excellent communication, and negotiation skills, just to mention but a few.

Zak’s Confectionary Company will have several departments that will have specific duties. First is the online sales department that will be in charge of all the sales that the business will be conducting in different states of the country. The sales employees will be conducting surveys for potential business opportunities and then actualize the sales. The second department is the production unit that will be in charge of manufacturing, designing and packaging of the confectionary products. The production team will ensure that the needs of the customers are met by giving them products that satisfy them. The third department is the marketing section which has the roles of marketing the products, conducting online surveys, and increasing the market share for the company. The last unit is the human resource category which is in charge of recruiting, training, and managing all the employees of Zak’s Confectionary. All the departments will be under the leadership of experienced managers who will ensure there is proper interrelation amongst the employees.

Startup-Costs and Business Funding

The startup costs for the business will put into consideration several fixed and variable elements. Zak’s Confectionary must have money for incorporating the business, paying the lease/ rent, administrative costs, inventory fees, as well as the production cost. The company will start on a small scale, serving a few states in the country before it grows to other regions. Therefore, the total startup cost will be approximate $ 50,000.

The initial source of funding for the business will come from the personal savings of the proprietor and loans. Micro-finance institutions have sound credit policies on funding small and new businesses (Mihalache, Jansen, Van den Bosch, & Volberda, 2014). Therefore, Zak’s Confectionary has the opportunity of successfully applying for a business loan from a microfinance institution because the interest rates are favorable than the charges from banks. The business will also receive funds from the goodwill of family and friends. These sources of funds will be adequate for the firm to establish its operations for the first few months of its operations.

Three-year Projected Income and Expenses

The projected income and expenditures for Zak’s Confectionary will include staff training, sales, materials, rent/ lease, website creation and hosting costs. The assumption is that the business will close all its transactions yearly and there will be no carrying figures to the subsequent years. The financial projections for a business are important because it gives the direction and expectations for the venture (Gabrielli & Baghi, 2016).

References

Baker, M. J. (2014). Marketing Strategy and Management. London: Palgrave Macmillan.

Bharucha, J. (2016). Cadbury Vs Nestle: A Study of The Chocolate War. International Journal of Research in Social Sciences, 6 (9), 609-620.

Filieri, R. (2013). Consumer co-creation and new product development: A case study in the food industry. Marketing Intelligence & Planning, 31 (1), 40-53.

Gabrielli, V., & Baghi, I. (2016). Online brand community within the integrated marketing communication system: When chocolate becomes seductive like a person. Journal of Marketing Communications , 22 (4), 385-402.

Hu, X. (2015). Online Marketing Strategy and Service Quality Evaluation System: An E-commerce Perspective. International Journal of Smart Home, 9(10), 223-232. , 9 (10),

Mihalache, O. R., Jansen, J. J., Van den Bosch, F. A., & Volberda, H. W. (2014). Top management team shared leadership and organizational ambidexterity: A moderated mediation framework. Strategic Entrepreneurship Journal, 8(2), 128-148. , 8 (2), 128-

Squicciarini, M. P., & Swinnen, J. (2016). The Economics of Chocolate. New York: Oxford University Press.

Tickle-Degnen, L. (2013). Nuts and Bolts of Conducting Feasibility Studies. American Journal of Occupational Therapy , 67 (2), 171-176.