Executive Summary
We have a feasible business idea of opening a retail store with a website that will cater to the needs of women with a wide foot of sizes 8-12. In addition to addressing the gap of only a few retailers for wide feet shoes, our store will allow women to custom-make their footwear in their desired colors. This customization will be our unique selling point as our known competitors, like Primark, do not offer people a chance to design their shoes to fit their choices and preferences.
After collecting a vast amount of data and conducting a strategic market analysis, we have concluded that the demand for wide shoe sizes 8-12 is still significant, and the supply in the market is limited. Our financial and strategic analysis shows that our company can provide high-quality, customer-customized shoes at an affordable price.
Unique Selling Point
Our unique selling point will be the customization of the shoes, which has been an emerging trend for a while now in the shoe industry. Studies have confirmed that customized products have more customer benefits than standard products, thus increasing customers’ willingness to pay, purchase, and overall attitude toward the product (Wang et al., 2020; Kit Cheng et al., 2019). Furthermore, it has been concluded that customization, if done without significantly increasing production costs and lead times, could give manufacturers a competitive advantage (Qi et al., 2020).
Our market research shows that although several manufacturers now integrate customization of products in their processes, the trend is yet to be picked up by traders. As our team expects, the reasons for the reluctance are that the costs and lead time of customizing products in the retail stage could exceed the benefits or lower profitability. However, after several strategic thinking and brainstorming sessions, we have found that this challenge could be overcome by having the customers tailor their products online days before they are manufactured. Therefore, we could employ lean supply chain strategies to order only the required raw materials and reduce costs.
The value proposition for this business idea will be having the customers design and purchase their shoes online without tolerating the hassle of visiting a store. Studies show that customers are appealed by online stores, a habit influenced by stay-at-home measures during the wake of the pandemic and persists (Ali, 2020). Moreover, with the advancement of technology, more customers are shifting to online shopping, where they do it in their comfort and can get access to a wide range of products. While there are many online stores for shoes, the is a limited supply of shoes that are customer customizable on the Internet.
It is hard to find any offering online customizable shoe retailers in the industry after narrowing the target market down to shoes for women with wide feet 8-12. This is despite the advancement of augmented reality technology, 3D product customization software, save later features, and AI advancement, which makes online customization far more efficient than traditional real-time displays. We intend to remain innovative in ensuring our customization application and website adapt to constant technological changes. We will ensure this by recruiting a highly talented team of experts.
Trying something new, such as starting a business type that has not existed before, requires a lot of risk tolerance, creativity, and perseverance. Our team will ensure it embeds the virtues of innovation and risk awareness associated with new-generation entrepreneurs (Guan et al., 2019). Our unique selling point of customization will require great entrepreneurial spirit to be embedded in our leadership team and the rest of the employees. Every customization made by each client will require an innovative, opportunistic, and entrepreneurship-oriented approach; thus, our customizations will have more significant customer satisfaction. We are confident that this unique selling point will enable us to penetrate and gain a small market share in the first year of operation.
Ideation
Preparation
The preparation stage of generating ideas involves gathering information and understanding the problem. Our ideal to make custom-made shoes for women with wide feet, of sizes 8-12, resulted from several factors that convinced our founder that it was the right idea at the right time.
First, the founder herself, having large feet, struggled with the selection of shoes and could not find any that fit all her choices and preferences. After conducting market research, she found a white hat fact that several women with this foot type faced the same problem. However, the CEO put on a black hat and identified challenges in implementing her idea including funding gaps, people not getting used to customizing their shoes, and challenges in talent acquisition.
Incubation
The incubation stage of idea generation entails breaking from the problem and allowing ideas to develop. In this stage, our team held brainstorming sessions, where we put o a green hat and identified several factors concerning the shoe material, design, color, and length. Our team put on a white hat and the fact of using 3D technology to ease the design and the use of targeted marketing techniques came up. During this stage, we identified a black hat limitation that 3D technology could be affected by the website breakdowns resulting in massive losses.
Illumination
The illumination stage of idea development entails trying to get new ideas and insights. At this stage, our team recognized the potential of 3D printing in the shoe industry. In developing the shoe idea, our team used various creative and critical thinking models, including the SWOT analysis, Bloom’s taxonomy, and the Socratic method, to ensure that we would develop a product that would be competitive in the marketplace.
We analyzed women with large feet and examined the political, economic, social, technological, environmental, and legal external market trends. We also analyzed all necessary contemporary studies, articles, books, and documentaries on customer behavior in the shoe industry.
We found, for instance, that customers do not use products for their value only. Instead, the perceived value greatly influences their reasons for considering a product (Chen and Lin, 2019). These yellow hat benefits made us decide to tailor our product to satisfy the customer physically and psychologically.
Evaluation
The evaluation stage of idea development involves the selection of the best idea for a project. In this stage, our team will use 3D technology to streamline the shoes’ design and manufacturing process. We understand the projections that by 2029, the 3D printing of shoes will be a billion-dollar industry with a $6 billion opportunity for revenues (Ukobitz and Faullant, 2021).
We aim to have a share of the pie by venturing into the industry while avoiding direct competition with organizations that have been in the industry for years through product and customer segmentation. Through taping on the power of 3D technology, clients with wide footwear can draw their feed and use technology to submit views on the design and shape that maximizes comfort and usability.
Elaboration
The elaboration stage involves refining the chosen idea to meet the required customer specifications. Our team will use 3D technology to allow the clients to draw their feet and submit the design and shapes that maximize their comfort and usability. We understand that the Our idea is good enough to be communicated to various stakeholders and potential financiers since it fills a market gap that can be filled without enormous costs. However, we know that imitators may keep us out of the business if we do not remain creative.
Market Analysis
The market that our organization will serve will be the women’s shoe industry for those women with large feet who end up struggling with the type of shoes they will wear, thus having to trade-off between class and comfort. Research reveals that the market size for the women’s shoe industry is large, with a universal market size of the foot ware increasing by 80% in value in the last nine years leading to 2020 (Zavodna et al., 2020). We used studies and figures such as the one above to justify our selection in this market segment.
Expert Market Analysis
We also conducted expert market analysis to identify the gaps in the industry. In the gap analysis, we first identified our target market: women with wide feet of size 8-12. We evaluated our competitors and discovered that Primark was the only direct competitor though they had their weaknesses. We then identified the opportunity of having self-customizable wide feet shoes with a market gap. Finally, we formulated a marketing strategy of encouraging people to try the website, customize their shoes for free, and pay only after delivery.
Price vs. Quality Matrix
The price vs. quality matrix was an essential tool as we used it to position our product in the marketplace. This tool compares a particular product against other related ones in the market regarding price and quality. Our product will be of high quality and will have premium prices to reflect their high quality and unique customization. However, our product will be relatively inexpensive, and our pricing strategy will largely depend on our competitor’s offer. Figure 1 below shows the price vs quality matrix for our company and our competitors.
SWOT Analysis
We have also conducted a SWOT analysis on our product and are aware of the external and internal factors that it will face. Our identified strengths will include customization of shoes making the product a unique selling point, targeted market making it easy to market, and having an online platform that will help us reach a wider audience. The weaknesses we will initially face will be a lack of brand recognition and having a limited product range. The product will enjoy several opportunities, like being in a growing market, having the opportunity to diversify to other shoes, and opportunities for forming partnerships with related companies.
PESTLE Analysis
We have also conducted a PESTLE analysis to help us better understand the market we are entering. We have identified that the political factors we have to negotiate are regulations on labor practices and trade agreement contracts between different partners and us. We have also discovered the two main economic factors influencing the idea: market trends and exchange rates. The social factors will include the demographics of our target market and social trends that will influence choices.
Technological factors that we plan to leverage are online platforms which are on the rise. Further, we have established a legal team that will primarily handle intellectual property issues and labor laws. We will also ensure that our operations are environmentally friendly, favor sustainability, and do not use energy sources that are not environmentally friendly.
Porter’s Five Forces
We also used Porter’s Five Forces framework to conduct a market analysis of our plan. According to Mahat (2019), this framework was popularized by Harvard professor Michael Potter who analyzed the competitive environment of an industry. The shoe manufacturing industry has a low barrier to entry. However, it is capital-intensive in raw materials, machinery, and equipment used; thus, the market will have a medium barrier to entry. The supplier of raw materials for making shoes are few; therefore, they will have a high bargaining power.
The buyers will be many, but they will have a high bargaining power since they will have easy substitutes. However, our customization feature and market segmentation will reduce the buyers purchasing power. Our product will have a moderate number of substitutes, including flip-flops, slippers, and sandals, but our self-designing feature will reduce the threat from substitute products. Rivalry among more established footwear manufacturers will be high.
Finance
After careful consideration and deliberation, our team has formed a limited liability company (LTD). This decision has been challenging since we know that selecting the right business type for our shoe company will influence how we structure our goals and objectives. An LTD form of business is more beneficial for this business since it will offer flexible tax options, separate personal assets from business assets, and have the roles of the business be defined and separated from the owners and founders.
The main expenses the business will have to bear will include hiring skilled labor, paying manufacturing expenses, purchasing raw materials, and covering various administrative expenses. One of the primary sources of funding for this business will be personal savings, especially in funding the initial startup. The advantage of personal saving capital is that it will give us more business control, especially during its early critical stages.
We will, however, not rely solely on our savings since the expenses required to start such a capital-intensive venture are beyond our reach. Therefore, we have decided to apply for a small business loan from a reputable financial institution to cover our initial costs. As a startup, we know that it will take much work to get cheap loans like our experienced rivals, and therefore we will have to bear the considerable interest rates if we choose this route.
One way to avoid loans if our savings fail to reach the minimum threshold will be to hold crowdfunding events. Through these events, the partners will be able to present the business idea to friends and family members, and if they believe our ideas, we shall be able to secure the funding. Lastly, we could approach Angel investors, who are interested in funding startups, in helping us with money to run the business.
We have set up a team of experts that can write a curated budget plan to help us understand the resources, especially financial ones, that are needed to set up and run the business. The team also helped us conduct a break-even point analysis to know the minimum time it would take for the business to cover its expenses. The financial projections show that our business could cover all the expenses and become profitable in just two years.
Finally, we used two investment appraisal methods the payback period and the NPV. The payback period helps to show whether a business is financially feasible (Zativita and Chumaidiyah, 2019). The payback period for this idea is three years, meaning it is feasible. The NPV, on the other side, considers the time value of money, and cashflows are discounted when calculating it.
Our expert team has determined that the initial capital required to start the project will be around $100,000. Our expert team projects that the business will have $50,000 net cashflows in the first year, $75,000 in the second, and $100,000 in the third. After considering many variables, the discounted rate has been decided to be 10%. After three years, the business shall have a positive NPV of $197, 524 meaning it will be a profitable investment. It is estimated that the average cost of production for each shoe will be $9.8 and the average price per shoe shall be $14.99.
Figure 2: Our Company’s Budget.
Resources
The success of our business will be linked to how effectually we establish our supply chain processes to manage the production and distribution of the shoes. A wide range of resources will be needed to achieve this objective, including having the right staff, manufacturing equipment, and raw materials. Initially, we plan to hire five employees to handle various roles such as sales, design, production, customer service, and administration. We shall eventually need a team of experienced employees to handle shoe manufacturing, shoe design, and customer service.
The team will also be expected to be determined as well as detail-oriented.
Further, we will need talented experts to market our products across various channels. The marketing team will also have to be trained to advertise to the market segment of women with wide feet. As the business grows, we may be forced to hire an additional team to handle the increasing volume of work and customers.
We will use four different suppliers all based in the UK. First is Pittard’s L.T.C. who will supply us with the raw materials through shipping. Secondly, a shoe components and materials manufacturer will supply us with the raw materials for customizing our big shoes through courier services. Johnson and Sons LTD will supply us will fully made shows which we will customize whenever a need arises. Finally, Abbey England will supply us with leather goods and accessories through both shipping and courier services.
The supply chain strategy we use to source raw materials such as leather and fabrics will also be crucial to the success of our idea. We plan to source raw materials from recommendable suppliers that can provide competitively high-quality materials. Before choosing a supplier, we will also ensure that how they get their materials are ethical and environmentally friendly. We will use contemporary supply chain techniques that integrate technology to optimize efficiency. To this end, we shall invest in making software that manages inventory and logistics well to ensure the timely delivery of shoes to customers. The machinery we will use will be capable of cutting, stitching, and finishing shoes without errors to enhance customer comfort and satisfaction.
The Strategic Plan, Limitations, and Ethical Concerns
While considering the options to expand our business, we have explored several opportunities, including stock market floatation, crowdfunding, ceasing trading, venture capital, and selling the business. Ultimately, we have decided to go for our savings initially and invest the profits into the business as it grows. This approach will help us move in the right direction and help us be financially stable. On ethical concerns, we have decided to consider fair labor practices as these will keep a good image for our brand over the long term. For all materials that we will use, we shall ensure that they are supplied by an organization that adheres to labor practices.
Our business will face different risks with varying degrees of impact, as shown in Figure 2 below:
These scorecards show internal business processes, customer perspectives, and innovative learning (Aryani and Setiawan, 2020). The illustration in Figure 3 below shows a balanced scorecard table for the big shoe business:
Reference List
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