HAIRWIGSAT24.com

BUSINESS PLANSM80.20 Managing and Implementing Electronic and Mobile Commerce

Submitted To:Dr. Donyaprueth KrairitSchool of Management23 April 2013

Presenters:Miss Shreya Pradhan (114292)Miss Busaw (113953)Mr. Yvann Eitel Etounou (114289)

1

Introduction Our Company Targeted customer Market Study & Analysis Our product and services Customer Service Plan Website Overview Financial Analysis Payment Options Recommendation

CONTENTS

Website name: Hairwigsat24.com

Our aim: to provide hair wigs and accessories

both online and offline (24 X 7) to help our customer enhance their beauty through different hairstyles at affordable prices  in South Africa

INTRODUCTION

Hairwigsat24.com is incorporated in Cape Town, South Africa

equally owned and managed by its three partners

Hire two full-time managers for store and warehouse and eight part-time general staffs and online sales executives to handle customer service and day to day operations.

OUR COMPANY

To be popular online retailer for hair wigs and hair products in customers in South Africa providing excellent products and innovative services.

Create an online virtual reality system that the users can customize their own hair wigs, purchase them.

To retain our position in South Africa and start manufacturing our new design and brand of hair wigs and accessories online.

Establish management structure to ensure successful running of the business and to provide reliable customer service

In long term, provide our services to other African countries in coming years and expand to Asia.

COMPANY GOAL

Young adults and middle age females as well as males in South Africa

People who want hair wigs for commercial and other purposes like stardom, parties, ramp walk/modeling, casual, etc.

People who have hair loss problems due to several health problems, genetic disorder and especially cancer patients throughout South Africa.

Playful hair wigs for children and coplay.

TARGETED CUSTOMER

The total population of South Africa is over 50 million with more than 40 millions are Black.

More than three quarters of the black population is under 25 years use hair wigs for different reasons.

According to Ministry of Social Affairs, using hair wigs has increased from 25 % to over 45% in the span of 10 years between 2000 and 2010.

The broadband internet access in South

Africa has doubled more in the last two years (8.5 million by 2010 - 2012)

MARKET ANALYSIS

Growth Projection

Mouth to mouth strategy

Advertise our product in market not only in popular and public places but also at the wholesale traders

The increase of internet users in South Africa is a plus point for our online sales.

We offer better incentives to pay for our products in line we can propose some free tools, competitive prices and excellent delivery service

MARKET ANALYSIS Contd..

MARKET ANALYSIS Contd..

Sales and Advertisement plans

Online advertising – ( paid advertising as well as through social network strategy)

offer timely seasonal and festival discounts and sales to our customers

Various membership services

Market Analysis using Porter’s Five Force

This business is not new one as it is practiced and done worldwide even with online services

It can be very easy to compete by other competitors. Solution : quality maintenance of both online and

offline as well as customer loyalty through excellent customer service.

Threat of New Entrants

Threat of SubstitutesOur suppliers can also be our competitors providing same kind of service online around the world.Many substitute products in the marketIf we compete with our own suppliers, the price may fall from our suppliers and they may offer many package and additional profits.

For widely available style of hair wigs, the customer can buy either from local shop or from us easily.

For new and attractive style which are not available yet in South Africa, the customer will have to buy from us because they can’t find it local shop.

Offer customized hair wigs which we can charge premium prices.

Power of Buyers

We opt for selling various brands of same kind of products so we don’t depend on a single supplier.

Also having many suppliers can reduce the purchase price of the product and also create connection between the supplier and the customer since there is a great competition.

Power of Suppliers

No hair wig online retailer in South Africa. However, other international retailers ship to African

countries (but import tax and custom is a deterrent).

Main competitor - well-established local shop in shopping mall or standalone beauty solon/clinics.

Small individual offline retailers distributed throughout South Africa pose rather intense competition.

Intensity of competitive rivalry

Our product line varies:

◦ Long or short Lace Wigs (straight/curly/wavy)◦ Colored hair extensions and strips, ◦ Front and back laces ◦ Hair accessories like hair bands, flowers, scalps ,

clips, ribbons , metallic jewels , etc.

PRODUCT AND SERVICES

CUSTOMER SERVICE PLAN

Information Quality

System Quality Service Quality

•Detailed product pages

•Online live chat support

•Telephone support

•Handling out of stock items

•Easy delivery tracking and resolution

•Calls for abandoned shopping carts

•Online user reviews •Multiple payment options

•Sales promotion and gift cards

•FAQ and knowledge based support

•Quick and easy checkout

•Follow up surveys

WEBSITE OVERVIEW

FINANCIAL ANALYSISStartup expenses

Company expects to raise $5,500 (USD) of its own capital Borrow $6,000 (USD) guaranteed by the Sasfin Bank, Cape Town as a five- year loan Revenue generation : customer sales (major) , membership fees, transaction fees and advertising fees in later years.

Anticipated sales for 5 years (Baseline scenario): Year 1 Year 2 Year 3 Year 4 Year 5

US$40,000 US$50,000 US$68,300 US$75,545 US$87,800

Projected Net Profit (Base line scenario)

The company does not anticipate any cash flow problems as fromsecond year onwards.

Break-even AnalysisThe company should break even by the 1.43 year of itsoperation as it steadily increases its sales entering its secondyear onwards.

FINANCIAL ANALYSIS Contd..

Year 1 Year 2 Year 3 Year 4 Year 5

- US$13,095 US$27,224 US$32,493 US$41,557

Baseline Vs worst case

Baseline Scenario

Net Present

Value (NPV)

73022.93902

Return of

Investment

(ROI)

11.638

Payback Period

(in years)1.43

Worst case Scenario

Net Present

Value (NPV)497.971

Return of

Investment

(ROI)

2.734

Payback

Period (in

years)

More than

5 years

Fig: Baseline scenario

Traditional way of purchasing products from the store (offline)- pay in cash , cheques or use cards

Online - PayPal Purchase Button Wizard PayPal Options - Add to Cart, Buy now and subscribe Toll-free phone number for ordering Printable order form that can be mailed or faxed

Security considerations

Transmission of sensitive data such as credit card numbers of customer using a technology called Secure Sockets Layer (SSL)

SSL requires that a trusted connection be negotiated between the customer's Web browser and a company's Web server.

PAYMENT OPTIONS

Regular follow up surveys online and offline for the customers and getting feedback regarding product quality, price and company services.

Timely review of advertising strategies and if necessary allocation of more budgets to advertising or figure out more innovative forms of advertising using social media campaigns.

Regular follow-up with customers by phonecalls, mails and other sources regarding new brands and designs.

Timely review of SWOT analysis as of fear of any new competitors online as well as offline.

Regular monitoring of consignments delivered and services provided to the customers.

Tie ups with logistic partners for better and timely delivery of the products.

RECOMMENDATION

THANK YOU !