Business idea Analysis: -
I have chosen a photographic developing shop. The business would allow customers to have their photographs developed and also the framing and different sizes of photographs would be available. I have chosen this as my business idea because there is a large amount of the market share to be gained in this area of retail. Also Boots is the only other business to have considered this area of retail and Boots is also mainly a cosmetics store, making the area of the market that they are aiming to attract narrower. Therefore having a store that specialises in photo development would have a far wider range of customer’s. This type of business would also be easy to set up because it is not large; I also have an interest in photography, the running of this type of business would be made easier by my background knowledge.
The business idea of sports clothing and equipment store was not chosen because a large amount of the market share has already been gained. The existing sports store has a very strong brand name ‘All sports’ therefore a small store with no brand name would find it very difficult to gain customers and a market share.
The business idea of a games/video hire shop was not chosen because the market share is mainly gained by blockbuster, which is a very strong brand name also they have gained most the market share due to their size of stock/store.
The stationary shop was not chosen because most the main large supermarkets (Alldays, Safeway’s) have gained that area of market share. This is because they have large shops that attract a wide range of customers that would prefer to complete their shopping in one store. This would make it very hard for a small stationary store to gain market share and customers.
Researching the proposed business idea
Research for my proposed business idea has to be carried out to ensure that the business that I have chosen will/will not have a good chance of gaining the market share and meet the needs of the customers it will need to gain.
Firstly I am going to carry out competitor research to find out what businesses that have already started this type of business have to offer to their consumers and what they do not have to offer which will make the business more attractive to customers. The competitor research will also show how much of the market share is left to be gained by other businesses, this is especially important because this will be the main objective of my proposed business. This research can be carried out by finding what the competitor businesses have to offer in this line of retail e.g. the time taken to develop films, this would be a main attraction to the consumers and also the pricing and position of the business.
Then I am going to carry out consumer research, this will enable me to gather the information that I need to find out what consumers will want in this type of business. I will also be able to find out from this research how large the business will have to be to accommodate the forecasted consumers. As the main objective in a business when it is started is to gain a share in its desired market then this research will show what is needed to be done to gain this. This research can be done by carrying out a questionnaire research on customers in the proposed business location, also interviews of customers can be carried out but this would be a time consuming process and participants would be hard to find which would mean the research would be less accurate.
Competitor analysis
I am carrying out the consumer analysis because in order for my proposed business to achieve a market share the main objective is to attract customers to the business. Also this research will show what is needed in the business to gain these objectives, this will allow part of an accurate analysis to show weather or not my proposed business will be successful.
Map of Thatcham town centre
Analysis of map
This map of Thatcham town centre shows that Boots have situated their store next to the public free parking area. Therefore Boots are using to their advantage that they have parking allocated for their customers, which is no cost to them, therefore they can offer convenient parking to their customers at no cost to Boots themselves. This is something that a small high street store would not be able to offer.
Analysis of main competitor
The main competitor for my business is ‘Boots’. Boots is situated next to the orange arrow, which is pointing at its location in the town centre. Boots is not solely a photo-processing store, however it is also a cosmetic and pharmacy store. This would mean that area of the market and the customers that Boots would attract is made far larger. Customers would also be attracted to use the facility that is inside Boots to develop their photographs because of it being far more convenient. Also in Boots they issue vouchers and special offers when a certain amount of money is spent, all of this that can only be used in other areas of their stores i.e. the photographic developing department. This would mean that customers would have to spend their money in Boots. Boots also has a nationally know brand name that would also attract customers, thus meaning that a small high street store would not be as well known to infrequent customers.
Conclusion
My conclusion based on the main competitor analysis is that Boots have gained a large amount of the market share in which my proposed business is to find a gap in. Boots also cover a large market share in other areas of retail meaning that the customer they will be aiming to attract will be far larger than that of my proposed business. They also have the opportunity to attract customers to the other departments in their stores because of special offers/vouchers etc. By doing this Boots can utilise all other departments of their stores as soon as a customer buys one product. A small specialist store would not be able to provide this. However, Boots is a large store that is well known to many customers nationally, also in this particular store parking is very sufficient, this would mean that the store would be very busy at peak times. A small specialist store would be well known to the customers in the local area because it is the only specialist store in the town centre meaning that it should be able to make sufficient profit and it should not be as congested.
Recommendation
From analysing the main competitors to my business I can see that there is more of the market share to be gained in this area of retail. Boots have a large area of the market share gained because of the areas of retail that their one store offers, also their nationally known brand name would aid the attraction of customers. My research has shown that a small specialist store that solely dealt with photographic development would be able to gain a market share and attract customers.
Findings
I have found based on my competitor research that the main competitor Boots have occupied a large amount of the market share. This would make the objectives of my proposed business far harder. However, as Boots has occupied a large area of the market share in other areas of retail (mainly cosmetics) there is room for a small specialist store to gain market share. Based on my findings I have allocated certain areas of my questionnaire that would reflect upon my
final recommendation.
From analysing this graph I can clearly see that 70% of customers would strongly agree to have the shop in/near a town centre. Only 20% would agree to have the shop in/near the town centre, and 10% of people asked would disagree to having the shop in/near the town centre. From looking at these results customers would prefer a store located near the town centre/near other shops would make the success of the business easier. This means that the fact that Boots has their development department in the same store far more convenient for customers. This is a service that would not be available by a small specialist store; also an equivalent service would be also very hard to make available and also being cost efficient. Some customers, however not many said that they would prefer to have the store out of a town centre, this would not be good for my proposed business because the one of the most important factors for success of this type of business is the customers and location to them.
From looking at this conclusion I can see that for my proposed business to have the best chance of success then I would have to locate it in or near the town centre of Thatcham. This statement can be confirmed by showing a map of the housing estates around Thatcham broad way (centre).
Thatcham town centre is situated on either side of the main road (red line) this is the main link between the other two major towns in west Berkshire they are Newbury and Reading. There are large housing estates on either side of the town centre; this would be the target for customers. Newbury has many photo developing stores and good parking facilities, it is also surrounded by far larger housing estates. My proposed business will be a small one in comparison to the neighbouring competitors; this would mean that the shop would only be well known to the customers from or around these housing estates. This would be why it is especially important that the business is situated in the town centre.
Consumer analysis
I am carrying out the consumer research for my proposed business because this will allow me to find out what type of customers and what services the business will have to have available in order to attract these types of customers. I am going to carry out sample research; this is because this will provide me with the most accurate analysis of individual regular users of Thatcham town centre. The sample research will be carried out on a 2 square mile radius of Thatcham and it will only be done on regular users of Thatcham, this is because they will be the main source of consumers for the business. I have also issued a questionnaire; feedback from this questionnaire will show me what consumers would prefer in my proposed business and what they would require in it.
I have also outlined two main areas of my questionnaire that would reflect upon my final recommendation: -
From looking at this graph I can clearly see that a store that specialised in the solely the development of photographs would attract more customers that were regular users of Thatcham town centre. The graph shows that 85% of the answers that were given were in favour of a specialist store and only 15% of the answers given were in favour of a multipurpose store (i.e. Boots).
Conclusion
From the information of the graph given and looking at the maps in the competitor research I can see that the main source of consumers will be the customers that live in Thatcham and are regular users of Thatcham centre. This is because the nationally know brand name will attract customers that are not regular users of the town centre. The residents of Thatcham however would know a small specialist store; it would be able to offer an uncongested service because as it is small, the business will also gain customer satisfaction because of the service that they are receiving.
Recommendation
From analysing this conclusion and the consumer research I can recommend to go ahead with my proposed business, this is because from the consumer feedback (see appendix #1) I clearly see that the main source of consumers for the business will be in the housing estates around Thatcham. This is because the small specialist store would be only known to regular users of Thatcham because of the fact that there is only one of the stores, unlike Boots where their brand name is know nationally. Also the customers that would be attracted would only be in the store for a committed purpose, thus meaning that the store would be uncongested. Unlike Boots where the range of customers that the store attracts is far wider then the store would be congested. A specialist store would gain customer loyalty and satisfaction from this service that it provides at no cost to the store. My consumer research has clearly shown that there are customers that would utilise a small specialist store in the town centre.
Recommendation based on consumer and competitor research: -
I recommend from analysing both areas of my research that my proposed business would have a good chance of gaining both a market share and attracting customers. The competitor analysis showed that there is only one main competitor in the town centre that offered the service of photographic processing. This was also a store that had many other departments. My consumer research showed that most customers that were regular users of Thatcham town centre would prefer a store that solely dealt with the development of photographs. My questionnaire (see appendix #1) showed that Thatcham was a well-used town centre; this shows availability of customers to attract to my business. The consumer research also showed that customers would prefer a store that was in the town centre. This would mean that where I had planned to locate my business would also be what consumers would prefer. I feel that going ahead with the proposed business of a photographic developing store would be a good idea.
- Analysis of Questionnaire
Analysis
The majority of the people that were surveyed said that they shopped in Newbury only once a fortnight. Only a small number of people said that they would shop in Newbury more than once a fortnight and 25% of people never shop in Newbury. This shows that the population of Thatcham does not prefer to complete their shopping in Newbury. Therefore implicating one of the local towns near Newbury.
Analysis
This graph shows that mainly people shop in Thatcham every day (50%) this shows that Thatcham is a well-used town centre by the local population. Only a small number of people never shop in Thatcham, possibly because it is well connected to Newbury, which is shown in the above analysis to be preferred by a minority. Only 20% of people shop in Thatcham once a week the same as once a fortnight, therefore implicating that Thatcham is well centralised to its local estates.
Analysis
This graph shows that most people use a film type of camera in Thatcham. This is mainly because it is the cheapest type of photography that can be used. Also the same amounts of people that use another type of camera do not use cameras at all. This therefore shows that a film photography shop would be well used.
Analysis
This graph clearly shows that the majority of people develop their films on a regular basis (once a month). This shows that the business for a photographic developing shop would be regular.
Location of my business
Introduction
Now that I have researched my proposed business idea I now have to choose a location for my business. I have already decided that I would like my business to be in the Thatcham town centre, my consumer research has shown this. In order to find the premises that I need I will have to list the location factors that are important to my business and it’s finances. I am going to compare three locations in Thatcham town centre this will give me an adequate choice of premises that are available and that meet the criteria stated by my factors of location and consumer/competitor research.
Premises specification
For my proposed business I am aiming to find premises that is relatively small and that can contain the necessary equipment and serve a small amount of customers (e.g. <6). The premises will also have to be available to structural change, i.e. changing the front of the store etc.
Factors of location of my proposed business
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Cost of rental of premises – this is one of the main location factors of my business. This is because as the type of business that I propose to set up will have to include some highly expensive equipment and possible changes to the premises, therefore the initial costs to the business will be very high meaning that the cheaper the rental the better for my business.
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Transport/access to business (i.e. front and back of store) – this also a very important factor to my business, this is because the customer satisfaction will have to be kept high for my business to be successful, thus meaning that lack of supplies and stock will have to be kept vitally in order. As the store will be in a town then good postal and telephone services will be available.
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Competition – the location to the competition of the business is important because customers that may be travelling to the competitor may decide to come to my business because it is in the same location. Also when in large area the customer loyalty may be to the competitor which would mean having the business near to the competitor would make success harder for the business.
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Nearness to customer – this is the most important factor of location for my business. This is because what will make this business successful will be the fact that customers use it regularly. Also as most of the towns that are near Thatcham have been padestrianised then the likelihood of Thatcham being padestrianised is quite high. Also if the business were to start up some type of service such as delivery of photographs or the alike then the transportation costs would be kept down if the business were of close proximity to the customers.
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Labour supply – the supply of labour in the area in which I wish to locate my business would be a very important location factor. This is because much of the labour that is needed by this type of business will be skilled labour. This will affect the location of my business because this type of labour will have to be found. Also the labour that is needed for non skilled, purposes such as cleaning of equipment and serving customers (i.e. not the operation of machines), may affect the location of my business because if the wages are to be kept low then I aim to locate my business in an area of high unemployment.
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Transportation/facilities – The transportation that has to be available to the business may affect the location of my business. This is because the business will have to have fast and reliable access to stock e.g. blank photographs and ink for printing. Also facilities that have to be available to the customer, they are like proximity to other shops and what parking facilities are available to the customer, this makes the business more accessible for customers.
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Suitability for purpose – This is a very important factor for the location of my business. Parking facilities will have to be available to my business so that customers can easily access it. The premises will also have to have large open front to it and have seating and perhaps toilet facilities for customers. As many customers may choose to leave the store whilst the development is taking place other customers may choose to stay in/near the store and wait for development. Therefore toilet and seating facilities will have to be available to customers. The premises will also have to be able to facilitate the equipment and still have adequate room to operators in the store
