Introduction
Military employees in a local organization have grossly limited personal training and development services to be more effective. The Al Mahara Training and Development Centre will have a specified range of personal training and development services, specifically designed for employees on efficiency skills and career development. The centre will also have a dedicated training team to help this group acquire important work-related skills (Blythe 2006). Within the town of Umm Al Quwain, there is no single training and development centre targeting employees. The proposed Al Mahara Training and Development Centre will incorporate special needs for the employees to ensure that they are empowered to proactively manage their career and maintain optimal productivity at individual and corporate levels. Hence, the business idea is likely to cure this problem by providing the employees of local organizations the opportunity for optimal performance and career development.
Description of Business
The proposed Al Mahara Training and Development Centre will offer training and development services to employees of local organizations in the UAE, Umm Al Quwain region. The business will offer life skills and career development to the employees to optimise their output and satisfaction. The business will be operated by three partners owning equal shares. The business is designed for local organizations within the Umm Al Quwain who cannot afford private programs. The business will be located in the downtown district within Umm Al Quwain. The proposed business will enter the Umm Al Quwain training and development market at the beginning of the year 2016. The company intends to control 10% of the market within three years after entry by offering affordable prices, quality services, and dynamic platforms for offering the training and development services to the employees of local organizations.
Product & Services
The Al Mahara Training and Development Centre will offer the latest and most sophisticated interactive employees’ development training that may motivate the personnel in performing beyond expectation and develop their careers. The centre will have interactive personalised t training, lifestyle coaching, and continuous monitoring to guarantee its effectiveness. The Al Mahara Training and Development Centre will have a specified range of team building activities such as physical exercise, counselling, empowerment, and personalised support specifically designed for employees of the local organizations.
Market Analysis
External market analysis
The external market analysis was carried out through the PESTEL, which reviews the political, economical, social, technological, environmental, and legal aspect of the business environment for the proposed Al Mahara Training and Development Centre.
Political
The business environment in Umm Al Quwain is transparent and predictable. The taxation regime and rules in the country are clear and concise. The political climate in the UAE is also serene with no major problems. This environment will make it easy for the entry of the Al Mahara Training and Development Centre (Cone 2011).
Economic
Economically, the country is recovering from the effects of the global financial crisis and it is yet to grow exponentially. However, the economic recovery offers the Al Mahara Training and Development Centre potential for increased activity as many organizations will embrace the subsidized employee training services that are customised (Cone 2011).
Social
The demographic nature of the Umm Al Quwain region is such that the district has a population of close to 100,000 employees who need training. Close to 30% of the population fall within the criteria that the Al Mahara Training and Development Centre is interested in (Central Department of Information and Statistics 2015).
Technological
The Technological environment in the UAE is still very young. Most of the technology is imported from Europe, East Asia, and North America. Hence, there is a huge gap in the introduction of technological advances in training services. Since the proposed Al Mahara Training and Development Centre will be equipped with the best technology monitoring response to employee training, the business is expected to penetrate the market within the shortest time possible (Mariotti 2007).
Legal
The legal environment in the UAE is relatively predictable. The kingdom does not have the porous nature of a democracy where laws are constantly changed. The country is more inclined to values than laws. Hence, the business will not have an unpredictable legal environment (Dagnino & Rocco 2009).
Environmental
The Al Mahara Training and Development Centre will operate in a business environment where major parameters are known. For example, the competitors in the business environment are bounded by the code of conduct. Therefore, the business will find it easy to shape its environment (Blythe 2006).
Internal market analysis
The internal analysis of the business was carried out through SWOT, which reviews the strengths, weaknesses, opportunities, and threats.
Strengths
The centre will offer specialized training and development for the employees within the district of Umm Al Quwain. The fact that it will also offer group bonding training will serve to increase its competitive advantage. Additionally, the centre will feature games and other products specifically designed for employees to guarantee fun and motivation in the process of participating in the program (Cheverton 2004).
Weaknesses
The targeted market is highly dependent on the company approval and funding. Hence, the marketing approach will employ the pull strategy to ensure that the local organizations are encouraged to buy group coupons for their employees. If the strategy does not work, the centre may experience low numbers of the employees turning up. Additionally, the cost of setting up the centre is very high because it will take at least three years to breakeven.
Opportunities
The population of employees in need of customised work related-training is on the rise. Hence, the centre will experience continuous business expansion. The centre will motivate more companies to enrol their employees to the programs. This is good for future business.
Threats
The existing internal employee training functions within the local organizations might want to expand their coverage and compete for the Al Mahara Training and Development Centre’s market. Many traditional internal training programs are very cost-effective since trainers are part of the personnel. Therefore, the proposed centre will have to create unique programs that cannot be offered by internal trainers within the local organization.
Opportunity Assessment
The methodology used to assess the opportunity for the Al Mahara Training and Development Centre business is the Five Dimensions Opportunity Model (FDOM) (Farris, Bendle, Pfeifer, & Rebstein 2010) summarized in the table below.
Investment
The Al Mahara Training and Development Centre will have a specified range of employee training services specifically designed for the personnel from the local organizations. The centre will require the highest start-up cost estimated to stand at AED 2.8 million.
Risk and Uncertainty
One element that allows risks to be minimized in a business is the proportion of the investment realized through the sale of tangible assets. It is estimated that 40% of the investment can be recouped through the resale of business if the business fails to pick up.
Return and Value Created
The first year is the only period when the business should expect losses; this is mainly due to the high initial cost of promoting the centre to gain customer confidence. Thereafter, the expected margin loss will be around negative 76%.
Impact of innovation and change
The Al Mahara Training and Development Centre will use new technology that is unavailable in the country and specifically designed for the employees from the local organizations.
Timescale
The business has a renewable life cycle and will produce returns indefinitely if successfully implemented. Moreover, concerning opportunity creation, the centre will try to expand into other markets such as mobile employee training services for organizations interested in the services of the Al Mahara Training and Development Centre and cannot send their personnel to the centralised training office.
Sales & Revenue
The business will sell each unit of service (career development, efficiency in service delivery, and healthy work culture) at AED 15 the business projects to sell at least 85,000 units per year.
The project sales for the five years are summarized below.
Financials
Profit and loss statement
Al Mahara Training and Development Centre
Income statement
For the three year period ended 31st December,
Balance Sheet Statement
Al Mahara Training and Development Centre
Balance sheet statement
As at 31st December,
Breakeven analysis
Breakeven point in units is computed by dividing fixed costs with contribution per unit. The calculation of breakeven point for the year ended 31st December 2020 is presented below.
Cash flow budget statement
Al Mahara Training and Development Centre
Cash flow budget statement
For the five years ended 31st December,
Organization
The business will be managed by a team of six personnel. The roles of the management team are summarized in appendix 1. This team will be mandated with the role of expanding the business by at least 10% each year for the next five years. The expansion each year will involve the addition of space, recruitment of more clients, and introduction of more services. The five-year plan is summarized below.
- By mid-2016, the Al Mahara Training and Development Centre will be a crucial spot in Umm Al Quwain for employees of local organizations.
- By mid-2017, the Al Mahara Training and Development Centre branch will be opened in a neighbouring town in Umm Al Quwain.
- By mid-2018, the Al Mahara Training and Development Centre will diversify and adjust the current products to accommodate the government agencies interested in improving the skills of their employees.
- By 2020, the Al Mahara Training and Development Centre will open 4 more branches outside the district of Umm Al Quwain.
Exit Plan
The business is projected to breakeven at the end of the fourth operation year. Should this fail, the management will give the business an additional year after which an exit strategy will be plotted (Kotler & Keller 2012). The exit strategy will involve either selling the establishment at its current value by the year 2020 or partnering with the most established business as a franchise.
Reference List
Blythe, J 2006, Essentials of marketing communications, FT/Prentice Hall, New York.
Central Department of Information and Statistics 2015, Latest statistical releases, Web.
Cheverton, P 2004, Key marketing skills: strategies, tools, and techniques for marketing success, Kogan Page, London.
Cone, S 2011, Steal these ideas: Marketing secrets that will make you a star, John Wiley & Sons, New York.
Dagnino, G & Rocco, E 2009, Competition strategy: theory, experiments, and cases, Rutledge, New York.
Farris, P, Bendle, N, Pfeifer, P & Rebstein, D 2010, Marketing metrics: The definitive guide to measuring marketing performance, FT Press, Alabama.
Kotler, P & Keller, K 2012, Marketing management, Pearson Prentice Hall, New Jersey.
Mariotti, S 2007, Entrepreneurship: Starting and operating a small business, Prentice Hall, New York.
Appendix 1
