Background
Modern Office Suppliers is a new start-up in the company in Fujairah. This company is planning on offering a wide range of computer and office supplies to the business community. The company’s main office will be based in Fujairah and the management wants to open three stores throughout the United Arab Emirates (UAE). It also wants to create an online presence, so that UAE companies can buy their supplies online. The company founder has been strongly influenced by Staples, a US office supply store, and Amazon, an online store.
Project Proposal
Research Background
Marketing research is a well-discussed area. It an area on which many scholarly articles have been written. One approach which has been dominantly used, and which will be used in this research, in studying marketing, especially in regard to new start-ups, is by closely examining the strengths, weaknesses, opportunities, and threats (SWOT) of existing companies in the product area where a company is to be introduced. Carrying out of a SWOT analysis is a well-discussed area. In this paper, the SWOT analysis of Staples and Amazon will be carried out as Modern Office Suppliers is planning to operate in the manner that these two companies operate.
Research Objectives
The research objectives of this research project are:
- To research both Staples and Amazon and perform SWOT analyses on these two.
- To perform a SWOT analysis for Modern Office Suppliers based on the current business and economic climate in the United Arab Emirates (UAE).
- To write two questionnaires with the first questionnaire dealing with the products that will be dealt with in the physical store and the second questionnaire dealing with products that should be sold online.
- To prepare an action plan
Research Methodology
The research will use primary and secondary resources. Secondary resources will be gathered from the internet. Reliable websites, scholarly journal articles, and books will be used. Primary data will be obtained through the use of questionnaires. There will be two sets of questionnaires with each set being given to at least 30 persons. Therefore is expected that at least 60 different views will be obtained through the questionnaires.
Action Plan
The action plan will depend on the finding of the project from both the primary and secondary research findings. Generally, the action plan will make a systematic recommendation on how Modern Office Suppliers will go about engaging in the UAE market. The vital recommendation will be made in regard to the physical stores as well as the online stores. The recommendation will also include a step-wise introduction of the three physical stores that the company wishes to start all over UAE.
Literature Review
Staples
Staples is known for selling office equipment and associated services. The company provides office equipment as well as expertise in services related to offices. It was founded in 1986 and has been steadily growing since then. It has a strong presence in 26 countries around the world. It is headquartered in Boston, Massachusetts (Stemberg, 1996).
SWOT Analysis
Strength
- The company has many branches in many countries. It operates in 26 countries around the world. This ensures that it has a wide market to supply (Staples, 2013).
- It has entered into contracts with other partners. Currently, it has over 88, 000 associates worldwide. These associates ensure that the company products are all over and therefore greatly increase the coverage of the company (Staples, 2013).
- It has a great public image (Staples, 2013). Because of this, it is easy for the company to enter new markets with less resistance and competition from already existing companies.
- It has a strong financial backbone. Its yearly sales sum up to $25 billion (Staples, 2013). With this financial muscle, it is easy for it to expand and undertake aggressive sales promotion campaigns which will go a long way in the enlargement of its market share.
- It has both physical and online stores. This ensures that it is able to take advantage of either side. Its website is quite interactive and easy to navigate through (Staples, 2013). This ensures that any online client visiting the websites is not put off and probably ends up making a purchase.
- The company specializes in all office equipment and office related functions. It, therefore, acts as a single-stop shop for all the office requirements. This helps to save clients’ time and therefore increases the popularity of the store.
Weaknesses
- Staples forms joint ventures with local companies that are well versed with the local market dynamics: for instance, it is in a joint venture with Pantaloon Retail. In this manner, it is able to increase and diversify its market share. However, in case of such a joint breakdown, Staples will not be in any position to enjoy such markets.
- The company has formed contracts with so many associates. The company has to share some of the profits of its products with these associates thereby reducing its profits.
Opportunities
- Staples has an international market, a good reputation, and financial stability. These can help the company to increase its operations to cover even larger areas. Its reputation enables the company to enter foreign markets in the confidence of succeeding.
- It can take advantage of emerging markets where office equipment companies may take time to be started.
Threats
- As the company keeps on growing fast, it is likely to fall into diseconomies of large scale operations. This may happen if the company opens up stores in localities where demand for office products is low.
- International and local competition against Staples cannot be ignored. Companies such as Amazon pose formidable competition to Staples. Start-ups, for instance, ABC Company, may also be preferred in their localities over international companies such as Staples.
Amazon
Amazon is a multinational company which is headquartered in Seattle, Washington (Amazon, 2013). It is a renowned online retailer, actually the world’s biggest. The merchandise on sale through this store is quite varied. This store started operating in 1995 (Stane, 2012).
Strength
- Amazon has built its name in online retailing. It is the most renowned online retail business and as a result, many people opt for it whenever they want to make purchases online (Van Ullen & Germain, 2002).
- It has a wide distribution network of warehouses all over the world. This network makes it easy for the company to distribute products quickly to different parts of the world (Van Ullen & Germain, 2002).
- It has rich diversified merchandise. Customers can almost get everything they want (Van Ullen & Germain, 2002).
- Online businesses reduce some overheads compared to their physical store counterparts.
Weaknesses
- Emerging online businesses specializing in a specific line of goods may take some of the markets from Amazon which seems to sell everything with no specialization.
- There is a likelihood the company is affected by the diseconomies of large scale operation. This is a cause especially due to the breakdowns experienced in customer service (Chang, 2012).
Opportunities
- The company offers merchandise that customers want.
- The company is stable financially and can expand more to cover even larger areas.
Threats
- Amazon prices are lower than most retailers (Arar, Larkin, & Bouman, 2007). In case there is a prize-lowering competition, Amazon may be forced to lower its prices further which may lead to losses.
- Competition from other stores that combine the physical and online sell points is high. For instance, eBay has online stores as well as brick-and-mortar stores. With eBay, it is faster to get a product ordered as it can be easily picked from the physical store once it is ordered (Neely, 2008).
- Online business is easy to enter. The company, therefore, is not completely insulated against the competition.
Methodology
Wise choice of a methodology is important in ensuring that the objectives of a research project are met (Raymond, 1992). For this project, the methodology chosen is that of obtaining information from both primary and secondary sources of information. Two companies, Staples and Amazon, will be studied and will act as case studies for this project. Staples is a physical store and the insights obtained from studying it will be implemented in the running of the physical stores of ABC Company. On the other hand, Amazon’s operation insights will also greatly influence the manner in which Modern Office Suppliers will run its online stores.
Primary information will be obtained through the use of questionnaires. There will be two types of questionnaires developed and a total of at least 60 persons are expected to be involved in filling the questionnaires. The views obtained from the questionnaires are likely to help in shedding light on the opportunities or threats that the new startup is likely to be confronted with. Secondary data will be retrieved from reliable websites, scholarly articles, and books. The currency of the secondary sources used will also be closely observed to ensure that only current views and facts which depict the current situation are presented. The company websites for Staples and Amazon will also be used as secondary sources of information.
Data Analysis
The information obtained from the questionnaires sent out was mostly words. As the questionnaires sought to find out the products which would be most preferred to be sold in the physical and online stores, the answers were in words. There were few calculations to obtain percentages for easy analysis. The copies of the questionnaires are attached in the appendices. The following sections are detailed discussions of the questionnaires.
Questionnaire One
This questionnaire was to find out the products that should be sold in the physical stores. 90 questionnaires were sent and only 37 were returned, that is, a return percentage of 41 percent.
Question one: This question sought to identify the main supplies of office equipment.
- Farook International Stationery 68 %.
- Al Gurg Stationery (AGS) 25 %.
- Others 7 %.
These answers show that Farook International is highly recognized in the UAE. This is probably because it is has a strong presence and it has branches all over the country.
Question two: The second question sought to find out if office supplies companies enter into contracts with the clients they serve.
- Yes 20 %.
- No 80 %.
The implication here is that companies do not closely engage their clients. This is an area where Modern Office Suppliers can take advantage of.
Question three: Sought to find out whether the clients buy their office supplies with information storage devices at the same time.
- Yes 70 %.
- No 30 %.
Question four: This sought to find out the inclusion of toner cartridges with the office supplies.
- Yes 80%.
- No 20%.
Question five: This was to find out the problems that clients encountered in physical stores.
- Yes 30 %.
- No 70 %.
Question six: This was seeking an explanation to the answer given in question five, specifically, if the answer was yes.
The general views were that some stores did not have what the clients were looking for and some did not have specific lines of items that customers required.
Questionnaire two
The second questionnaire was to collect information that could in making the Modern Office Suppliers online store more strategic and in a position to address client needs more directly.
Question one: This question sought to find out the percentage of those who make online orders for their office supplies. Out of the 90 questionnaires that were sent out 44 were returned slightly below a 50 % return rate.
- Yes 40 %.
- No 60 %.
It is clearly a huge percentage of clients make their way to the physical stores showing that the online market is still wide.
Question two: This question was to find out the willingness of clients to use online services in the purchase of their office supplies.
- Yes 56 %.
- No 44 %.
Question three: This was to get the number of end-users required for training on the online application. One user was predominantly chosen.
Question four: This was testing on the frequency of use of credit cards to make purchases.
- Yes 89 %.
- No 11 %.
Question five: The answers were as follows.
- Yes 10 %.
- No 90 %.
It seems people do not like associating their credit cards with signing contracts.
Question six: The answers were as follows.
- Yes 15 %.
- No 85 %.
SWOT Analysis of ABC Company
From the data analysis above, the SWOT analysis for Modern Office Suppliers can be easily developed. The information collected from the questionnaires is helpful in determining the marketability of the products that the company wants to start selling.
Strength
Modern Office Suppliers is a new startup and therefore is quite flexible. It will be very easy to change the operations of the company to address the emerging needs of the customers. This might not be the case for the big companies which have specific ways of operating.
Weakness
Modern Office Suppliers is new and young and has no affiliation with the giants in the UAE market. As a result, it would take some time to pick up and get a portion of the market from the big and well-established companies.
Opportunities
- The United Arab Emirates is relatively well off the country and starting a business in this region is likely to kick off well.
- The startup has many role models including Staples and Amazon whose operation modes can be used to shape the operations of the startup.
- As established through the views given in the questionnaires, there is a good market for office equipment in the United Arab Emirates.
- Since the client has probably not swelled up, the management team has the chance of ensuring that the few clients are managed well so as to create a cutting edge image of the company.
- Expanding Modern Office Suppliers to cover the whole of UAE as per the plans of the management will help the company to capture a wide market. Since it is planning to offer online services as well, the three outlets planned to be opened can serve as outlets thus it will be possible to reach all customers all over the UAE.
Threat
There are established office supply companies operating in the UAE. They include Al Gurg Stationery (AGS) which was started in 1982. AGS has over 6,000 branded products and operates both physical and online stores. Another well-established company in this line of business is Farook International Stationery which was started in 1980 and has grown to own 3 factories and with over 350 employees.
Action Plan/Recommendation
It has to be noted that Modern Office Suppliers is engaging in a line of business that is highly competitive. Within the context of the UAE, there are many established office supply companies. Modern Office Suppliers will probably not have easy entry into this market. The following is a recommended action plan which the company can use to grease its entry into the UAE market.
The action I: Aggressive Marketing Campaign
The company must engage in an aggressive marketing campaign to announce its presence. The campaign does not necessarily have to be expensive and can make use of social interaction networks such as Facebook, Twitter, etc. An interactive website is a must for an online business to be successful. Modern Office Suppliers therefore must engage a creative web design to develop an interactive company website. For the physical stores, it is recommended that they are decorated to give them a unique outlook. Nice physical appearances are important in luring people to shops.
Action II: Quality Service
The company should ensure that every single client attended to is fully satisfied. Word of mouth and refers are very important for a startup in creating a client base.
Action III: Sensibility and Flexibility
ABC management should be very sensitive to the client’s needs. Equally, it should be flexible to accommodate these needs. Sensitivity to customer needs and flexibility to accommodate them will endear the company to the customers. This is very important taking into consideration that the company is competing against established companies.
Conclusion
This report has discussed the way forward for ABC Company. The company is a startup in the UAE and wishes to engage in supplying office equipment through physical stores as well as online. It has been pointed out that the competition in the UAE is stiff taking into consideration that there are well-established office supply stores in this region. It has been suggested that the company should start slowly and pick up gradually through referrals. In order to achieve this, the company should engage in aggressive market campaigns, offer quality services, and be sensible to customer demands. The physical appearances of the physical stores should be pleasing and as well the website for the online store should be interactive.
References
Amazon. (2013). Amazon Investor Relations. Amazon. Web.
Arar, Y., Larkin, E., & Bouman, A. (2007). Amazon.com: One Item, Many Prices. PC World, 25(6), 39-42.
Chang, A. (2012). Amazon apologizes for Christmas Netflix disruption. Los Angeles Times. Web.
Neely, D. (2008). Haul And Pull Up: History, Mento And The Ebay Age. Caribbean Studies, 36(2), 95-120.
Raymond, J. C. (1992). Population Estimation and Projection: Methods for Marketing, Demographic, and Planning Personnel. New York, NY: Greenwood Publishing Group.
Stane, A. (2012). A Brief Introduction to Amazon.com Inc., Its Founder, Key Executive and Main Products. New York, NY: Greenwood Publishing Group.
Staples. (2013). Corporate Profile. Staples. Web.
Stemberg, T. S. (1996). Staples for Success: From Business Plan to Billion-Dollar Business in Just a Decade. New Jersey, NJ: Cengage Learning.
Van Ullen, M. K., & Germain, C. (2002). Business as Usual: Amazon.com and the Academic Library. Journal of Academic Librarianship, 28(5), 319.
Appendices
Office supply questionnaire I
Name of Agency:
Contact Person:
Mailing Address:
E-mail Address:
Phone Number:
Fax:
- What is your current office supply vendor?
- Farook International Stationery
- Al Gurg Stationery (AGS)
- Others
- Are you under a contract with any office supply vendor?
- Yes
- No
- Do you include data processing supplies with your office supply ordering (CDs, flush disks etc)?
- Yes
- No
- Do you include toner cartridges with your office supply ordering?
- Yes
- No
- Do you specific problems with the current stores from which you buy your office supplies?
- Yes
- No
- If yes, briefly explain.
Office supply questionnaire II
Name of Agency:
Contact Person:
Mailing Address:
E-mail Address:
Phone Number:
Fax:
- Do you currently order your office supplies on-line?
- Yes
- No
- If not would you be willing to do so under a new contract?
- Yes
- No
- If yes how many end-users would require training on-line ordering system?
- Do you currently process payment using a credit card?
- Yes
- No
- If not, would you be willing to do so under a new contract?
- Yes
- No
- Do you currently require desktop delivery?
- Yes
- No.