based on the case and draft paper to create ppt in these part:
#legal environment
#social media strategy
#swot analysis- weakness
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UNFORMATTED ATTACHMENT PREVIEW
Running head: CONSULTING REPORT: Luxepak Consulting Report: Luxepak Catarina Ju-Yu Xiyi yan Yizi Dong Yuxi Zeng California Institute of Advanced Management Running head: CONSULTING REPORT: Luxepak Executive Summary and Background In this paper, the group will be analyzing the travel-sized case brand LuxePack, with regards to their wine-case collection. Beginning with an analysis of the Political, Economic, Social, Technological and Legal Environments (PESTLE), followed by an analysis of the Strengths, Weaknesses, Threats and Opportunities (SWOT) that the company is facing and may face in the near to long-term future, this paper will finalize with a recommendation for the client in the present economic landscape. The goal is to incorporate this semester’s learnings on Peter Drucker’s Innovation and Entrepreneurship skills into LuxePak’s case. Therefore, our recommendation for the company will be focused on materials learned in class and in Peter Drucker’s philosophy. PESTLE Analysis • Political Environment Generally, the political factors that affect a small business are often given a lot of importance. Certain areas of government policy can affect a business’s success as it has the power to change results. Therefore, companies must be aware of the existing policies at both local and federal level, as well as changes in policies that might affect their business. To begin with, the company will be facing a generally stable political environment in which changes are not strong enough to impact the business. At the same time, corruption is largely low to nill when it comes to small businesses, which promotes a stable opportunity for the company. Running head: CONSULTING REPORT: Luxepak When it comes to taxes, California has one of the highest taxes for small businesses in the country and is highly regulated. At the same time, The Tax Foundation’s 2019 State Business Tax Climate Index has found that California has one of the worst tax structure for business. The state’s tax burden can make a difference in how much a company can reinvest in growth and, at the same time, can be a disadvantage when competing with brands in the same business, dealing with the same target market, who are based in low-tax, low-regulatory states. However, low taxes and low regulation in a certain area does not necessarily translate into success. In fact, some of the lower tax states have struggling economies and the regulatory environment is a strategy to attract businesses to that area. Finally, another note to make with regards to Luxepack is the recent tensions in foreign trade policy and trade restrictions between China and the US. Since the company manufactures its products in China, there is a high risk of the import costs of the product to rise. • Economic Environment The economic environment has many factors such as inflation and interest rates, stage of the business cycle, economic growth, international trends, and globalization. The economic factors determine the economy’s performance, which causes impacts on companies and generates long term effects. For instance, a rise in the inflation rate would affect the company’s price of their products and services. Therefore, it would affect the supply chain management, and production cost, and customer purchasing power. According to the key economic indicators show that the U.S economic outlook is healthy and stable. From 1947 until 2019, the GDP growth rate in the U.S averaged 3.21 percent (n.d). The household consumption increased at a fast rate which means more consumers and larger spending power. Luxepak as a small enterprise will realize the effects more quickly than large Running head: CONSULTING REPORT: Luxepak companies. However, under the healthy economic climate brings the small business a big opportunity to develop in the market. Luxepak can catch the opportunity and stand out in the market. • Social Environment What is Social Environment? Social Environment has many dimensions including age distribution, sex distribution, income distribution, demographic characteristics, variety customs, population growth rate and values of the different group of population. Many factors can affect the social environment through influencing the overall market and customers. In addition, those factors can identify emerging trends, which are helpful for companies and marketers to obtain further understanding of their target market and customers’ needs and wants. Luxepak is the company that focuses on manufacturing the travel cases for the past two years, and recently, Luxepak wanted to design and manufacture the carrying cases for wine. What is the Social Environment for the wine carrying case? Based on our group’s survey and research, we noticed that the age distribution for the wine carrying case is 40 to 55. As for the younger group, they prefer hard liquor or go to the local bars if needed. In addition, the income distribution appears on $55,000 to $85,000. Furthermore, according to online research, we concluded that California, Florida, New York, Texas, and Illinois are the top five states in the total amount of wine purchased (Diskin, 2019). All of these factors identify the target market and customers for Luxepak. • Technology Environment In PESTLE analysis, technology environment includes the technological factors that relate to the existence, availability, and development of technology. This could include things from computational power to engine efficiency. LuxePak is built for any occasion including air Running head: CONSULTING REPORT: Luxepak traveling, boating, camping, canoeing, fishing, hiking, hunting, rafting, trips to the gym, or anything else you can imagine. However, our client didn’t mention any specific technology used when rolling out the product. To make sure this product has technology-driven factors, we suggest our client highlight the fact that this case is water-proof, sustainable, and eco-friendly. Furthermore, as the world becomes more and more eco-friendly, it’s important to indicate how the case would be made and are the materials sustainable? These are the important factors customers care about when making purchasing decisions. • Legal Environment Legal environment involves the laws and new policies that are passed in a particular region where a business operates. Like for the case of Luxepak, it has taken its entrepreneurial venture in China where it has established grounds with a Chinese manufacturer. Labor laws, safety standards and trade laws set in China must be adhered to, especially to avoid environmental pollution, child labor and deteriorated employee rights. When doing custom products marketing, several legal situations have to be taken into account (Gupta, 2013). Luxepak must get to know of the criminal cases against their competitors which leads to conspiracy to fix prices. It will have to practice corporate social responsibility so that it can be accepted by society and the government in terms of minimizing pollution and adhering to trade laws and labor laws. Competitive Advantage/Analysis A company can achieve a competitive advantage in many different ways. They can either initiate external changes such as respond to challenges faster or changes in PEST factors. On the other hand, they can also develop their advantage from the inside by creating unique Running head: CONSULTING REPORT: Luxepak competencies, offer innovative capacities, and provide more resources. Overall, there are two different types of competitive advantage to pursue, either cost advantage or differentiation advantage. Since Luxepak is a small company with limited resources, we won’t encourage them to go for cost advantage as they will not have good margin after that. Instead, we suggest them to go for differentiation advantage by partnering with notable companies that already have an audience. This includes hotels, cruises, or wine bars. With this being said, we believe a businessto-business partnership approach as the next step would help Luxepak gain competitive advantage and stand out of the market. SWOT Analysis • Strengths More and more companies nowadays adopt the direct to consumer approach when launching products into the market. And the company in our case study is one of them. Unlike traditional brands and companies where the sellers go through retail to connect with the end customers, the company in our case study has a dedicated website which empowers them to have a direct relationship with their audience. Also, by having existing manufacturing relationships in China, the company is in a good place in terms of fulfillment – which is great. Unlike a lot of competitors in the industry, the founder of the company is a serial entrepreneur that has a solid relationship with source and supply chain, and this makes it easier for the company to build the foundation for its technology ecosystem. Thus, I’d say the company has strength in technology and this is something they should consider highlighting in the value proposition when doing the storytelling in the marketing campaigns. • Weakness Running head: CONSULTING REPORT: Luxepak Could future developments in technology change how you do business? As technology continues to advance new ways of carrying out business will have to change since the customer’s needs will shift towards the prevailing technology. To maintain the current customers with the aim of making a profit from the company, shifting into the favour of technology will greatly assist into achieving the goals of the business organization. New technology will also be accompanied by new products and services which will require the business to integrate its operations in line with the new technological advancements to cop up with the market competition (Gürel & Tat, 2017). How consumer behaviour is changing in a way that may have an impact on the business? Consumer behaviour has a significant influence on business. In the cases where the customers will provide negative reviews of the business, the number of consumers will reduce which will mean that the profit will as well be minimal. The emotional experiences that customers have during the interaction with the company services will also have an effect on the business. Suppose the business gets positive reviews which can be sure obtained through ensuring the consumer satisfaction of the business services, then the income profit rate will also have to increase which signifies that the consumer behaviour dictates the success or prosperous of the business or even its failure (Phadermrod et al., 2019). Market trends that may become a threat According to the high competition, new goods in the market which fulfils the needs of customers will pose a threat to the business since it will demand that the business change their products and as well the services they offer to hold or retain their customers. The marriage of offline and online customers experience is a market trend which allows the customers to compare the offline and online prices of goods. Since the costs may vary from time to time depending on Running head: CONSULTING REPORT: Luxepak whether it’s an online or offline buying it may pose threat to the business because there are many small emerging businesses which may be offering the same services at a lower price. • Opportunity Is the travel wine-case market growing and are there trends that will encourage people to buy travel wine-case? After many researches and surveys, our group believes that the travel wine-case market is not growing currently. Why? First, it is easy to buy the wine when you are traveling. People can always buy wine in the airport, in the grocery stores, or liquor stores. Secondly, wine stores usually offer the service that they can help customers to pack wines and ship wines to any destination customers want. In addition, when we search online, we noticed that there are many competitors in the market already. With the limited customers’ needs, too many competitors in the field can limit the profits. Are there upcoming changes to regulations that might affect Luxepak positively? Recently, the case, Tennessee Wine and Spirits Retailers Association v. Blair, drawn wine retailers’ and court’s attentions. Wine retailers in Tennessee are object to have the national retail chain, Total Wine & More, to open an outlet in Tennessee. Even though the court has not made any changes to the regulations, many wine retailers highly believe that the case will make the court to come up with the new regulations that affect interstate shipping positively (Asimov, 2019). If the assumption comes true, we think the upcoming changes to regulations will affect Luxepak negatively. • Threats After a meeting with our client, there was a sense that the client’s personal attachment to the product might be a threat to making necessary changes to the business model of the Running head: CONSULTING REPORT: Luxepak company. At the same time, the lack of experience not only in this particular market of wine-case production but also in the market of travel-sized packs in general, might present a risk. This is especially worrisome since there is a large number of companies already in competition in this market and the product is not (yet) distinct enough to find a competitive advantage for the brand. Since the market is close to being saturated, market-entry might also prove to be hard. Another threat to the success of the business are the high costs of production. At the same time, the system can be quite bureaucratic and the trade agreements with the country where production is made (China) might increase the cost of production for the company. Mission Statement We can use the question from Drucker “What is our business?” to start with mission statement. In theory, each company has its own mission statement, which states why the company established, what are company’s goals, and what kind of services or products the company focuses on. Currently, Luxepak does not have any posted mission statement, however, after conducting some online research, we think the mission statement that Luxepak should develop including following three parts. The first part is for customers, the key point is to make customers satisfied with the traveal cases Luxepak produces. Vision Statement A vision statement is so important because it points out a clear direction to the business. A clear vision statement helps businesses set a long-term goal and helps explain what a business Running head: CONSULTING REPORT: Luxepak exactly stands for. Besides, it also can provide benefits and motivate employees in a corporation. A good vision statement is like a guide book which leads the business to succeed. Why Vision Statement is important for a small business? First, it can help businesses and employees to achieve a specific goal. It increases working efficiency and productivity. Second, it can keep a close relationship with social media and attract attentions to develop business partnerships with other companies. Last, it helps the company to build direct strategic plans. Thus, companies following by step to step strategy will achieve a long-term goal. Social Media Strategy Luxepark has been in business for less than two years and have generated awareness for its products through participation in trade shows. When launching the new product for the new case, there is need to investigate new sales channels such as cruise lines while utilizing Ecommerce and other online sales platforms like the Amazon and eBay (Rodriguez, Peterson & Krishnan, 2012). These social media approaches helps the marketing department to schedule posts in advance and post on many profiles using one podium. The social media also assists it to link directly with their potential consumers while getting to know exactly what their preferences and tastes are. This saves time and cost of production since they will be producing their merchandise in accordance with the consumers’ expectations. Luxepak will maximize on revenues since they can gather vital social media analytics based on performance. Social media calendars are imperative in saving time, giving balanced topics, giving important dates as well as giving themed posts. Therefore, Luxepak can use the online marketing strategy to increase sales and consumer awareness of its products that promote cross-selling. This strategy helps a rising firm to mark important calendar dates and come up Running head: CONSULTING REPORT: Luxepak with profitable offers that increase sales. They are then able to analyze their competitive market relative to their products’ prices and sustainability (Rodriguez, Peterson & Krishnan, 2012). Conclusion—Catarina Running head: CONSULTING REPORT: Luxepak Reference: Pofeldt, E. (2019). These Are The Best Places To Launch A Small Business in America. CNBC NEWS. Retrieved from: https://www.cnbc.com/2019/07/15/these-are-the-best-places-to-launch-a-small-business-inamerica.html Walczak, J., Drenkard, S., Bishop-Henchman, J. (2019). 2019 State Business Tax Climate. Tax Foundation. Retrieved from: https://files.taxfoundation.org/20180925174436/2019-State-Business-Tax-Climate-Index.pdf Diskin, E. (2019, March 04). These states drink the most wine. Retrieved from: https://matadornetwork.com/read/states-most-wine/ Gürel, E., & Tat, M. (2017). SWOT analysis: A theoretical review. Journal of International Social Research, 10(51). Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, 194-203. Asimov, E. (2019, January 10). The Supreme Court May Change the Way You Buy Wine. Retrieved from: https://www.nytimes.com/2019/01/10/dining/supreme-court-interstate-winesales.html United States GDP Growth Rate. (n.d.). Retrieved from https://tradingeconomics.com/united-states/gdp-growth Gupta, A. (2013). Environment & PEST analysis: an approach to the external business environment. International Journal of Modern Social Sciences, 2(1), 34-43. Rodriguez, M., Peterson, R. M., & Krishnan, V. (2012). Social media’s influence on business-tobusiness sales performance. Journal of Personal Selling & Sales Management, 32(3), 365-378. Luxepak Statement of Work Introduction: Luxepak is an entrepreneurial venture that specializes in compact, attractively designed carrying cases for travel. Their cases rigid exteriors to protect their contents from damage when placed inside suitcases, or just for carrying singly. They have been in business for less than two years, and have been creating awareness of their products through participating in trade shows, among other venues (student team: clarify this). Their original product was the Lux Travel Pak, which is a small compact travel case. It was originally a travel/toiletry kit, but evolved into something bigger (see the website below for more details). Most recently, they have developed a new product for a new case that is designed for carrying wine (or possibly other types of bottled products). This new product is the focus of the current project. Some illustrations of this product are included in the folder along with this statement of work. Luxepak manufactures its products in China. It already has a relationship with a Chinese manufacturer and an export/import agent who works in Chicago. The production and transportation costs are already known quantities. To set up the production of the new wine case, Luxepak needs to develop a mold, which is one of the most expensive components of the manufacturing process. They would like to investigate the possibility of financing the production of this mold by advance sales, both to B2B and B2C customers. This leads us to the statement of work. Statement of Work: . The client wants to design a pre-launch strategy of new wine case. This includes figuring out how to fund the development of the plastic mold from advance sales. The client also wants to investigate possible sales channels, such as cruise lines, or more generally “duty-free” sales, in addition to using online sales platforms (such as Amazon and eBay). • They also believe that their products can be branded for carriers (e.g., Princess Cruises or airlines). This option should also be investigated. • They also want an analysis of their competition, relative to price and the substitutability of their products (which currently have unique features, compared to others in its market space-student team will verify/clarify the distinctness of Luxepak’s products when they interview the client.) Contact Information: • Principal: Dee Dee Niedzwiecki (Owner) Phone: 720-404-7009 Email: DEEDEE@BUYLUXEPAK.COM Website: www.luxepakit.com
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Tags: SWOT analysis business management Legal Environment social media strategy Entrepreneurial venture