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Executive Summary
Zuma SunCare was established by four partners who have varying degrees of experience and personal interest in the young, active lifestyle (15-34 year olds) consumer group they intend to target their product to. ...
Zuma SunCare intends to trade as a limited liability corporation.
Zuma’s primary objectives over the next two years are to:
· Perfect the formula, packaging & advertising concepts through pilot testing in a local community/ lifestyle area. ...
Zuma SunCare requires an initial investment injection of $485 000 to support the transition of product to market. This amount allows for further research & development of the product, packaging and advertisingThis report provides an analysis of the business plan of Zuma SunCare from the perspective of a potential investor.
While the company has no discernable competitive advantage over other market competitors in terms of product quality, Zuma promotes its market advantage as being a lifestyle product in a uniquely packaged dual container that allows the use of two different strengths of sunscreen for different areas of the body and is targeted exclusively towards the young, active lifestyle segment of the market. ...
Introduction
Analysis Objectives
Zuma SunCare requires an initial investment injection of $485 000 to support the transition of product to market. This amount allows for further research & development of the product, packaging and advertisingThis report provides an analysis of the business plan of Zuma SunCare from the perspective of a potential investor.
The layout of this case study analysis individually each component of the business plan and applies the following criteria in discussion to each one:
· Identification & general discussion of the variable
· Analysis of the variables in relation to the theory
· Impact of the variables and any suggested alternatives relative to the success of the business plan.
A final summary will draw together the key issues and provide a final decision of implementation suggestions relative to the decision of acceptance or non-acceptance of the viability of the business plan of Zuma SunCare.
Analysis
Market Analysis
Overall
Zuma has described its entry market as being the $620 million US retail market for suntan and sunscreen products. ... Zuma has also identified the key distribution channels to be the mass merchandisers. ... It is these niches that Zuma has identified as an entry point.
Specific Market
-Target market
The specific target market Zuma will access is the “young adult” portion of the retail market worth $318 million. This group is also researched to be highest users of sun care products with 38% regular use- an defined area of use Zuma aims to promote the product. ... Zuma appears to be limiting itself to focusing marketing strategy on accessing the 15 million college student group who may have limited use of these specialist venues due to their available resources but may be more inclined to frequent larger retail chains due to better pricing. ... Once again, it could appear that Zuma is limiting its potential for sales through not accessing the broader spectrum.
Competitive factors
There are several options available to Zuma to obtain competitive edge. ... Zuma is intending to rely upon a ‘hook’ to gain entry and market share in the form of its unique packaging and low associated costs. It is confident in the statements it makes about the major competitor not entering this niche or that start up imitators will not succeed in displacing Zuma from its position however these statements tend to promote value inflation rather than facts that would provide true evidence of these possibilities eventuating.
Industry Analysis
It is critical for Zuma to demonstrate an understanding of what is occurring within the competitive landscape of the industry in which the firm competes. ... The predicted trend in the industry is that buyers will become steadily more price sensitive and although Zuma represents this not as an issue assuming that these consumers will not have full market information-this is not an assumption indicative of our technological age! Zuma goes on to state that in many cases consumers will but whatever product is readily available, especially at the resorts & hotels, although with their seasonal trends, they may not necessarily give the product full market potential exposure for impulse buying. Zuma also acknowledges that it is the major retailers that have the significant buying power.
Supplier Power
Zuma does present the supplier concentration as not being dominant due to a large number of suppliers that produce common blow-moulded plastic products. ...
Subsitute products
Zuma has identified a range of substitutes however they have placed these alternatives outside their target segments age range (substitutes identified suitable for older groups). ...
Rivalry among firms
Zuma identifies the rivalry as being substantial although suggests this will not be an issue due to entry into a segment that the national brands have little impact on. ... Zuma appears to have completed a partial examination of only two of the five components of a full macroenvironmental analysis.
Structural & cyclical change
Zuma has acknowledged that the suncare market is more acyclical and remains relatively unaffected by the business cycle as sun exposure is fairly constant with some variables of seasonal trends (ie. Increased sun exposure in summer). ... These type of locations experience the extreme highs and lows of seasonal impacts upon their businesses and this in turn could impact Zuma sales dramatically at low seasonal periods. ...
Demographics & Social trends and values
Zuma has demonstrated the importance that the societal trends and values variable provides by researching what people in the marketplace are doing, thinking, and buying and including this in their business plan. ... The progressive and ever-evolving itinerant global population and global markets create a need to understand:
· Diversity
· Cultures
· Age demographics, and related implications of age
· Educational patterns
Zuma’s research into social trends has revealed the importance society is placing on adopting healthier lifestyles aimed to increase longevity and quality of life, hence reducing pain and suffering with a preventative health care product.
Approximate Word count = 4615
Approximate Pages = 18.5
(250 words per page double spaced)
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