Evaluation and Comparison of Business Plans

Although the three companies are active in the service industry, they are active in different fields. Snipark is located in the parking lot row. Hygiene Hands Australia operates in the hygiene and hygiene sector and Muscle Buddy operates in the sports and fitness sector. All companies are trying to locate in Sydney, Australia’s largest city. Their motivation and interest in locating their operations in the City of Sydney is based on its large city-dwelling population, which represents high market potential (Australian Bureau of Statistics, 2013). Each company has specific solutions to tackle the big challenges facing a rapidly growing urban population. Snipark is seeking to address the high costs of car parking in Sydney which stands at $15 by providing a cheaper parking alternative solution where people can lease their private car parks to other car owners through a mobile application, Synipark. Hygiene Handy on the other hand, is seeking to enhance public hygiene by providing baby and hand wipes through self-service vending machines which will be located at eating points. Muscle Buddy wants to focus on health and fitness of the city dwellers by providing gymnastic services, physical exercise, nutrition therapy, and body weight training as well as sports fashion (Cranney, 2016, 26).

The business opportunities for the three businesses are based on explicit research and analysis of markets and market trends to establish the viability and sustainability of the businesses. The businesses have outlined target markets which they seek to focus on. For instance, Snipark targets the overall car users in Sydney, however, with no specific market segment; Hygiene Handy is targeting the public eat outs in the city with specific focus to the young families who represent the highest population in Sydney city. Muscle Buddy targets all urban dwellers in Sydney irrespective of their age and hence lacking target to a specific market segment.

Sales and marketing strategy

Snipark and Hygiene Handy differ in marketing objectives. In this regard, Snipark and Hygiene Handy have clearly defined goals contrary to Muscle Buddy which has not indicated its marketing objectives. Snipark marketing objectives are based on branding, accessibility and extendibility while Hygiene Handy aims at establishing its brand in markets with high growth potential.

Moreover, the marketing strategies of the three businesses are based on the 4Ps of the marketing mix. In terms of product, Snipark and Hygiene Handy seek to provide products with a benefit of more convenience to their users which will provide the customers with the reason to buy the products (Armstrong et al, 2014, 34). On the other hand, muscle buddy has coiled its services on diversity where the business is looking to focus on a broad range of services in sports and fitness industry. The wide range of service options make up the Buddy’s product benefits.

Snipark and hygiene handy are not only using a common product strategy but also a similar pricing strategy. The two businesses are seeking to apply competitive pricing strategy to sharpen their competitive edges to edge out their competitors in the market. Both companies have set their prices below the existing market rates (Hsieh et al, 2014, 156). On the contrary, muscle buddy is seeking to compete on skimming pricing strategy where it has various price classifications based on the needs and interests of the target customers (Armstrong et al, 2014, 34).

All companies differ in place of their operations; Snipark is online business and therefore aims at basing its operations in smartphones while Hygiene Handy seeks to operate at eating points, the strategic customer touch points. Muscle Buddy on the other hand, aims at establishing itself along places of leisure such as in beaches where the market potential for its business is high.

The companies differ in some aspects of promotion strategies, however, some of their aspects in this strategy are similar; Snipark plans to capitalize on social media marketing which will encompass Facebook, Instagram, YouTube and blogs; Muscle Buddy as well plans to partly utilize social media marketing in addition to taking advantage of strategic location for self-marketing (Belew, 2014, 51). On the other hand, Hygiene Handy seeks to create awareness through advertising by use of sticks on place marts at food courts.

Operational strategy

The three businesses have different proposed management structures; nevertheless, the chief executive officer is the head of business in all the three companies. The proposed critical departments at Snipark are the sales & marketing department and technology and development department. Hygiene handy applies matrix organization structure in the management of its business where procurement is the critical department. Muscle Buddy has few levels of management with the CEO being the overall authority.

Snipark, Muscle Buddy and Hygiene Handy contrast in cost strategies. The Muscle Buddy cost strategy seems to ignore operational costs effectiveness. The business considers outsourcing only for purposes of specialized services and professionalism but not cost minimization. In other words, Muscle Buddy places more emphasis on the quality of the supply rather than cost. Nevertheless, Snipark and Hygiene Handy are concerned with cost-effectiveness and that’s why they are planning to use cost-cutting measures such as outsourcing and good procurement relations respectively to minimize their costs (Stevenson and Hojati, 2007, 21).

In terms of risk management, Snipark is very keen on minimizing its risk exposures through the deployment of highly secured mobile-based software and use of mobile applications which are regarded as more secure than computer-based software (Gordon & Zimmerman, 2007, 97). On the other hand, Hygiene Handy is less exposed to risks due to the scope of its business and the nature of its products which are less vulnerable to expiry. Nonetheless, Muscle Buddy has high-risk exposure due to the intense rivalry and the high cost of doing such business.

Financial plans

Snipark, Muscle Buddy and Hygiene Handy differ in their initial outlay requirements. Hygiene Handy has the least capital requirements while Muscle Buddy has the highest initial financing needs. Snipark is ranked second regarding to initial capital requirements. The companies as well have different means of funding their startups. Muscle Buddy will heavily rely on venture capitalists such as sports agencies to start the business and span their growth (Dutta and Folta, 2016, 39). The business will as well depend on personal contributions and a bank loan to finance its start. Snipark plans to largely depend on personal contributions and equity contrary to Muscle Buddy. Hygiene Handy has not stated its source of funding for its initial outlay.

Snipark uses four methods of business valuation to value its business which consist of asset valuation, capitalized future earnings, multiple and business comparable sales. On the other hand, Muscle Buddy plans to value its business based on asset earnings and market growth. Hygiene Handy has not indicated its mode of business valuation. Based on these valuation approaches, Muscle Buddy is the highly valued business.

The businesses have outlined their financial statements to indicate their financial positions and income projections in the next three years in business. On these bases, Muscle Buddy outperforms its peers in all the financial aspects as noted in the financial statements. Snipark is ranked second, and Hygiene Handy is ranked last based on this criterion of analysis.

Recommendation for improvement

Snipark

Regarding business opportunity, Snipark needs to review government policies on parking to establish whether it can be able to utilize the government parking for more income. Moreover, review of government regulations on businesses as far as parking is concerned is critical to Snipark in assessing whether the policies present favorable business environment for its operations in addition to avoiding the risks associated with non-compliance.

Hygiene Handy

Hygiene Handy needs to recognize the value in developing metrics for measuring performance especially in marketing strategies. It is through these metrics a company can be able to assess its progress or whether it is heading towards its objectives. Moreover, motivation is very critical in improving the productivity of the employees. Hygiene handy should develop an operational structure that is friendly and seeks to improve the morale and motivation of employees.

Muscle Buddy

Muscle Buddy should not as well undermine the importance of setting performance metrics to assess the performance of their marketing strategy. This is what enables businesses to evaluate the effectiveness of their strategies. Also, it would be appropriate for the firm to carry out a sample survey that seeks to understand the most appropriate time to schedule classes and examples of working out activities they would like to see.

References

Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson Australia.

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.

Australian Bureau of Statistics (2013) Population Projection, Australia, 2012(base) to 2101, Catalogue 3222.0, Available at http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/3222.02012%20(base)%20to%202101?OpenDocument. Accessed on 10 September 2017.

Belew, S. (2014). The art of social selling: finding and engaging customers on Twitter, Facebook, Linkedln, and other social networks. Choice Reviews Online, 51(10), pp.51-5677-51-5677.

Cranney, L., Phongsavan, P., Kariuki, M., Stride, V., Scott, A., Hua, M. and Bauman, A. (2016). Impact of an outdoor gym on park users’ physical activity: A natural experiment. Health & place, vol. 37, pp.26-34.

Dutta, S. and Folta, T.B. (2016). A comparison of the effect of angels and venture capitalists on innovation and value creation. Journal of Business Venturing, vol.31, no.1, pp.39-54.

Gordon, C. & Zimmerman, A. (2007). High-Tech Outsourcing: A benefit-Cost Framework. The American Economist, 51(1),pp.97-105.

Hoffman, D.L. and Fodor, M., 2010. Can you measure the ROI of your social media marketing?. MIT Sloan Management Review, 52(1), p.41.

Hsieh, C.C., Chang, Y.L. and Wu, C.H., 2014. Competitive pricing and ordering decisions in a multiple-channel supply chain. International Journal of Production Economics, 154, pp.156-165.

Krajewski, L.J. and Ritzman, L.P., 2005. Operations management: processes and value chains. Prentice Hall.

Stevenson, W.J. and Hojati, M., 2007. Operations management (Vol. 8). Boston: McGraw-Hill/Irwin, p.21.