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Conveyor Belt Business Plan For Retail Operations

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Executive Summary

This business plan focuses on Store Carousel, Inc., a company that will be established in Dubai to serve the entire UAE. This company will be manufacturing conveyor belt systems and fitting them to customers’ premises once they place their orders. These systems will span across the entire retail outlet premises parallel to the shelves and help transport goods that customers could have in their shopping baskets and feel they no longer need before checking out. Rather than placing these products anywhere or returning them to their designated shelves, the customers will put them on the conveyor systems to lead to the storeroom where attendants can pick them and arrange them later. The target market is the retail industry in the UAE. This is a very potential market based on many domestic and multinational retail giants that have invested in the nation, the vast population, and the transformation of the country into an international business hub.

Moreover, the retail industry has been growing at a steady and consistent pace in the recent past, and it is forecasted to continue expanding in the future. The company will adopt a corporation capital model, and investors from the general public will own it through shareholding. These investors will be responsible for funding the business and will share the income in dividends.

The business will require a total of 5 million dollars to begin operations. However, it is expected that the company will break even in ten years based on the high potential. Since no repayment is expected to be made due to the capital structure that the company adopts, a portion of the income will be paid out in terms of dividends, while the rest will be retained to fund expansion. In the long run, the company owners should expect their shares to rise exponentially in the future, mainly if a low dividend payout model is adopted.

Conveyor Belt Business Plan For Retail Operations

General Company Description

This business plan is based on developing a store carousel for the retail industry. Retail business is an industry that has been thriving in the recent past as companies focus more on stocking consumer goods and other essentials that serve all the needs of the community. According to Reinartz, Dellaert, Krafft, Kumar, and Varadarajan (2011), the retail industry is one of the fastest developing sectors as it replaces multiple other markets through the creation of a cheap, efficient, reliable, and centralized marketplace that meets almost every need of every group within the society. To boost the efficiency of doing business, retailers have been focusing on integrating technology and other automation forms that simplify processes and lower the cost of operations. As a result, establishing a business to develop and supply these retail companies with a carousel system could be a booming business and a sustainable one.

In the current plan, a company named Store Carousel, Inc. will be established in UAE. It will focus on developing systems to save shoppers time, reduce the number of store attendants required to arrange goods, and reduce displacement and disorganization of interests within the shelves, raising the customers’ convenience. In return, this will help retail companies mitigate the damage of goods in customers’ hands or on the shelves. These systems will be fitted in retail facilities besides the frames and will function as a conveyor where customers can place the goods they do not need or those they accidentally picked from the shelves rather than put them in the wrong frames. These products will be transported back to the storehouse, where they can be quickly sorted and rearranged by store attendants at a convenient time.

Store Carousel, Inc. will be located in Dubai, a strategic position due to the high population, massive traffic, and a high GDP. Also, this city has multiple large retail businesses such as Carrefour. This is an excellent opportunity for Store Carousel, Inc. The company will have access to many clients that will be willing to have the carousel systems fitted in their outlets to boost their clients’ satisfaction. While this business is expected to hit instantly, Dubai’s high growth rate and its transition into a global marketplace and among the most popular tourist destinations make the business sustainable.

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Mission Statement

Store Carousel, Inc. will be primarily guided by its mission statement. In this statement, the purpose is to develop quality products. The product/services are carousel systems. Therefore, the mission statement reads, “To develop quality products that help our clients best serve their clients and raise their convenience.”

Goals and Objectives

Store Carousel, Inc. will have several goals and objectives that will reinforce the above mission statement and equally contribute to the organization’s success. The company’s goals are to create affordable carousel systems and help retail businesses best meet the needs of their clients. These goals will be broken into several objectives that will serve as milestones that will guide the company in efficiently achieving the long-term goals. These objectives include:

  • To establish a sustainable business.
  • To develop quality products.
  • To continue improving customer satisfaction and experience.
  • To become the leading company in the industry.
  • Business philosophy

Store Carousel, Inc. will focus on building a large number of loyal customers. This will be achieved by ensuring that the products are of the highest standards and quality. This is expected to help create customer loyalty while assisting retailers to best serving their customers, which will come as an advantage to the company as the demand for its products will continue to rise. In a recent study, it was determined that satisfied customers are more likely to have a high retention rate, a lower customer turnover, refer others to the business, and which leads to the growth of the industry in terms of revenues and market share (Demirci & Kara, 2014). Since this is a relatively business in many parts of UAE, the company will ensure that it maximizes its market share long before competitors can emerge.

Industry Description

Store Carousel, Inc. will be operating in the conveyor industry. This is an industry that has been developing at a fast pace. As described by the Future Market Insights (2018), companies operating in this industry grow and fit belts that are approximately 20 millimeters thick and fit them in a loop. This loop of straps is rotated by a system of at least two pulleys that ensure that the conveyor system seamlessly moves around the facility. Several industries rely on this industry as a way of raising their delivery of services and effectiveness. Some of the key sectors include manufacturing, processing, chemicals, and the retail industry. The retail sector is the most promising and potential in modern times due to its fast growth rate. In this case, the company will manufacture, distribute, and fit the conveyor systems on the customers’ facilities to ensure that they can sell unwanted goods from the shelf section and back to the storeroom. This is a very competitive industry and particularly in the Middle East. Notably, many companies such as Abdulla Yousif Fahkro Group, Digitale Conveyors Private Company, and ATCO Business Solutions exist. These companies develop conveyor systems and distribute them to diverse markets, including the manufacturing, mining, and processing industries throughout the nation. A company like ATCO commands a large market share in Dubai and UAE. It will thus be essential for Store Carousel, Inc. to develop a more innovative approach that will enable it to gain a competitive edge or at least the capability to compete with the already established companies.

Marketing Research

The proposed company will be operating in the conveyor belt market. The conveyor belt industry has been growing at a breakneck pace. According to Future Market Insights (2018), the Asia Pacific region has been growing at the fastest speed due to the rapid growth rate of associated industries in this region. Ideally, the conveyor belt industry serves retail outlets, manufacturing plants, processing plants, and chemical plants. It was recently reported that the demand for components that facilitate automation of services and operations in companies has been on the rise as companies strive to optimize their production, raise convenience, and improve the value of benefits (Reinartz, Dellaert, Krafft, Kumar & Varadarajan, 2011). However, this is subject to other forces that determine the growth of related industries, such as the GDP of a nation and the level of investment that a particular sector receives. In its recent report, Future Market Insights (2018) reported that countries’ GDP in the Asia Pacific regions has been growing steadily in the recent past and thus serves as the most potential market for the conveyor belt industry. It is also important to note that sectors such as the retail industry and that will provide the primary customers for Store Carousel, Inc. Its competitors have experienced a considerable growth rate that will necessitate seamless growth in the companies that will manufacture and deliver quality conveyor systems. For instance, the retail industry in UAE has been expanding consistently at 5% per year during the past decade and was poised to hit US$ 54 billion or approximately AED 200 billion in 2017 (Arabian Business News, 2016). In 2018, the industry was expected to record an additional 3% growth, particularly with the continued conversion of some UAE areas such as Dubai into global economic hubs and popular tourist destinations (Clowes, 2018). This means that the forces that affect the conveyor belt industry and the customers are favorable at the moment. Therefore, this is the prime time to consider establishing Store Carousel, Inc. to reap the maximum benefits.

Products and Services

Store Carousel, Inc. will be offering carousel systems to retail businesses. This is an essential product to retail outlets as a result of the convenience that it creates. In this case, Store Carousel, Inc. will establish a factory that will be developing various components that will be used in the creation of the system while fitting it to retail outlets. The product will be in the form of a conveyor system equipped along the retail facilities shelves. This system is inspired by luggage conveyor belts fitted in airports to aid in transporting luggage from one section to another. This not only simplifies the need for additional airport assistants to carry the bags around, but it also raises the level of convenience by reducing the time that it takes to transport the luggage. Cases of damage to customer luggage are seldom reported due to the effectiveness of the automated conveyor system. In the case of store carousel systems, the conveyors will be fully automatic, and they will lead to the storeroom, where inventory is stored before it is arranged on the shelves. However, the customer can regulate the speed of the conveyor. If a customer places a product on the carousel, the product will be moved to the storeroom. From the cabinet, attendants will sort these products and match inventory in readiness for rearrangement. 

Several factors will give Store Carousel, Inc. competitive advantages. One of these is that the company will specialize in its operations and ensure that it perfects its products in quality and reliability. While other companies like Carrefour could choose to join the industry, they could be easily disoriented due to the diversity of their business operations. Being a pioneer in this business means that competitors will enter the industry long after Store Carousel, Inc. has established itself, built a name for itself in the industry, and established a vast customer base. Creating these systems from scratch means that Store Carousel, Inc. will benefit from increased control of its product and customize the product as per the customer’s specification. This will put it in an excellent position to serve both small and large retail companies while using low-pricing strategies as a competitive edge over competitors. Unfortunately, competitors that have invested in the retail business could an advantage over Store Carousel, Inc. by using their connections with other retailers as a way of winning them. This could also limit the number of available customers for Store Carousel, Inc., and more so if the should-be customers become competitors.

Store Carousel, Inc. will sell its products to the customers rather than leasing them. This will ensure that the customers have absolute control over their creations. However, there is no fixed price for the product. Instead, this depends on the store size and the wishes of the customer. As discussed above, customers will have the flexibility to specify what they for their businesses and the length of their systems. One should expect a small retailer to spend less on obtaining a carousel system than a large store getting the same variant of the system. The company will also offer repair services at a cost. The costs will too depend on the kind of repair to be done or perhaps. 

Marketing Plan

It is always important to carry out marketing research to understand the market, make informed decisions, and develop a suitable marketing plan. According to Hedin, Hirvensalo, and Vaarnas (2014), marketing research serves as a backbone of the marketing plan as it provides valuable information about the market, the positioning, a competitive analysis, and other metrics that guide a business on the best strategy to use while penetrating the market and gaining an edge over others in the market. In this marketing research, results from a survey that has been carried out purposefully for this business plan and data from the external analysis will be synthesized to provide a comprehensive view of the market and the forces that could affect a business.

Economics

Store Carousel, Inc. will be based in the UAE. This is a high potential market in the 21st century, mainly when the nation’s economy and the population of both citizens and businesses are on the rise. As reported by Arabian Business News (2016), the retail industry in UAE was estimated to be hit more than US$ 54 billion as of 2017. The demand in this industry is considerably high due to the significant number of employed people. Retail outlets focus on people of all ages and diverse consumer groups. These businesses have been on the rise as more investors seek to share the booming industry. In Store Carousel, Inc., the primary target market will be retailers of all sizes. This is because the carousel systems will be customized and assembled at the retail facilities, which essentially means that the product is not limited only to extensive retail facilities as existing cities in UAE continue to expand, new ones sprout. The population of these cities continues to grow due to a rising population; the idea of having a business that targets other companies serving the population is highly potential and sustainable.

The retail business in the UAE has been growing at a breakneck pace. As reported by Arabian Business News (2016), the industry grew at a steady rate of 5% for the decade leading to 2017. This creates a more significant potential for domestic and foreign retail giants such as Carrefour to expand their nation’s operations. According to Hemalatha and Sivakumar (2009), the UAE retail industry was tiny at the beginning of the 21st century. With a market growth of 7-10% each year during the early and mid-2000s, the industry was able to hit an estimated US$ 2.5 billion as of 2009. However, the industry has currently grown more than twenty times the value it was in the 2000s. For instance, the Arabian Business News (2016) estimated that the industry would be worth more than $54 billion as of 2017, while Clowes (2018) estimated the same sector to grow by an additional 3% during 2018. The transformation of some of the UAE regions, such as Dubai, into popular international business hubs has dramatically increased the retail industry’s value and the number of retailers in the nation. The UAE relies heavily on imported goods and creates a wave of interest among multinationals such as Walmart and Carrefour that has since invested heavily in the country. These are indicators that the industry will continue to flourish in the future and will provide an excellent opportunity for a company that will help these retailers respond to changes in economic forces and customers’ needs.

Several barriers are expected in penetrating the new industry. One of these is that some of the retail giants in UAE could identify the business idea, fit the carousel systems in their facilities, and use their expertise and relations with other retailers as leverage to win the competition with Store Carousel, Inc. Notably, these companies have a substantial financial muscle that Store Carousel, Inc. would find difficult to match. Presently, Carrefour, Union Co-op, and Lulu Hypermarket, among others, have already established themselves in major cities through investments worth billions of dollars (Bridge, 2018). Store Carousel, Inc. may lack sufficient resources to construct its manufacturing facility and meet other requirements for establishing a business that has the potential to serve an entire industry. Additionally, some companies could see the carousel systems as an unnecessary expense and a product that could significantly suppress the available shelf space.

Further, it could be challenging to obtain skilled labor since this is a relatively new business. The nation is dominated by skilled labor that specializes in oil and oil-related businesses. It would be a significant challenge to retain the employees as they could be quickly poached by other competitors that could have sufficient finances to offer them better compensation packages. Finally, it could be challenging to establish this company due to the complex government requirements and regulations.

To overcome the above challenges, the company will ensure that it considerably lowers its products’ costs in an attempt to lure in more retailers to purchase the products. Also, Store Carousel, Inc. will offer good salaries and other benefits to the employees, such as leaves and bonuses, to reduce employee turnover. While Store Carousel, Inc. could be a minnow when it comes to its financial muscle and technology relative to some competitors, it will use the company’s decision to obtain public funding through the corporation capital model will resolve the problem of costs of establishment. At the same time, the company will have a legal team that will help it align with the prevailing legal requirements and new ones.

Several factors could affect Store Carousel, Inc. One of these is technology. It will raise the cost of operations due to the fast pace at which a particular technology becomes obsolete, the rapid rate at which new and more efficient technologies emerge, and the high costs of research. Simultaneously, changes in government regulations, including taxes, licensure, controls, and restrictions, would affect the company’s ability to operate due to complications in compliance and increased operational costs. Changes in the economy, including a rise in the unemployment rate, a decline in GDP, an increase in the price of goods, and instability in the currency exchange rates, could also raise the cost of doing business in the retail industry. This could perhaps force Store Carousel, Inc. and retail companies out of business.

Products

The store carousel system is a unique product and a must-have for customer-focused retailers. In the modern world, meeting the needs of customers is the primary focus of many businesses. It is important to note that retail outlets share the same business model in that they purchase goods from manufacturers and other suppliers in bulk and resell them on a small scale to the consumers. This means that a shopper has a wide choice of facilities where they can purchase any given product. For retailers, competition in the industry is stiff, and each business is forced to incorporate processes that add value to their products. There is no better way to add value to the methods than to raise customers’ convenience and satisfaction. By installing the carousel systems to their facilities, owners of these retail facilities will benefit in terms of efficiency and financially as well.

The carousel system will have several benefits to the retailers. As has been explained above about the airport luggage belt, airports require a significantly lower number of assistants, the process of moving luggage is automated. The same case will happen to retailers as they will need a lower number of employees in the storeroom and inside the stores, as arranging and moving inventory will be simplified by the system. This will save the companies substantial operational costs. After all, salaries make up the enormous amount of fees that many companies spend in a year.

Interestingly, shoppers will not have to move the products they do not need back to their designated shelves. This is a tiresome, sometimes a complicated process, particularly in enormous stores with many frames. This will improve customer experience and elevate the level of satisfaction in the services. Simultaneously, this will significantly save the customers and the retailers time wasted as customers search for the designated shelves to return the products. Like the store, attendants rearrange the displaced items. Retailers can serve a larger number of customers at a given time while benefitting from reduced customer turnover and increased market share. Companies will save heavily as the damage and misplacement of goods will be considerably reduced by ensuring that they are transported back to the storeroom slowly, carefully, and smoothly. Moreover, retailers will not need additional space as the carousel system is small and fitted along the shelves in the existing facility space. Retailers should consider the system as an essential requirement in times to come for both their benefit and their customers.

Customers

The target customers for carousel systems will be businesses in the retail industry. To begin with, the company will narrow its operations to the domestic market. While the initial manufacturing facility will be based in Dubai, the company will serve the entire UAE. It is expected that other manufacturing plants will be opened in other cities while the operations will be expanded in the Middle East within five years. Store Carousel, Inc. will sell directly to its consumers. This means that there will be no middlemen between the company and retail businesses. This will help ensure that a customer can order from the company, specify the features of their system, and have Store Carousel, Inc.’s technicians fit the system in their premises.

In terms of customer demographics, the carousel system business will cover supermarkets and hypermarkets. The retail industry is broad as it also involves other small sellers. However, any self-service company constructed in the store format can have the system installed in its facilities. Since there is no specific price and size, both small and large retailers can place their orders based on what they want. At the same time, it does not matter whether the customer is located in the city, suburban, or rural areas. 

Competition

Several competitors could pose a significant threat to Store Carousel, Inc. As stated earlier; there is no direct competitor in the retail industry. However, it is essential to note that a country like UAE, which has been experiencing a surge in the automation of businesses and engineering works, has many manufacturers and suppliers of conveyor belt systems. While none of these specializes in serving the retail industry, they can supply companies in this industry with the methods they need. Some of the key competitors include Abdulla Yousif Fahkro Group, Digitale Conveyors Private Company, and ATCO Business Solutions. Simultaneously, a company like Carrefour is considered a potential threat as the company could easily venture into this industry should it choose to diversify its products and operations. Store Carousel, Inc. will be compared against Digitale and ATCO in the table below.

Figure 1: Competitive Analysis Chart

Factor Store Carousel, Inc. Strength Weakness ATCO Digidale Importance to Customer
Products Carousel systems Customized, cheap. Less popular, limited variety. A variety of conveyors A variety of conveyors 4
Price Based on features Low price High operational costs Not specified Not specified 1
Quality High quality Premium products, customized to meet customers’ need. Inexperienced, quality based on  users’ demands High quality High quality 1
Selection Customized systems Customized products Limited quality due to expertise and financial constraints. a wide variety A wide variety 2
Service Sale and repair Cash sales and excellent after-sale services. Geographical limitation and lack of skilled labor. Sale and repair Sale and repair 2
Reliability Very reliable Offering quality products and reliable after-sale services Lack of sufficient experience. Very experienced and proven. Very experienced and proven. 1
Stability Startup business A good business model. Startup status makes it difficult to rate business and its success. Highly stable products, 16 years of experience. Highly stable products and successful business. 2
Expertise Limited expertise Committed to R&D and continued improvement. Limited experience since it is a startup business. Experts in customized motorized and non-motorized products. Experts in their field. 1
Company Reputation Unrated No negative record Unknown to customers. Highly reputable. Highly reputable. 2
Location UAE Serving the entire nation and with plans for future globalization. Not yet established, only a single facility based on Dubai. International, strategic partners, huge presence. Serves the GCC region, many facilities, large number of service locations. 1
Appearance Positive image Company focuses on best meeting customers’ needs. Little known to customers. Positive image Positive image 2
Sales Method Direct sales Direct sales through website. Lack of established distribution centers. Direct sales and partnerships. Direct sales 3
Credit Policies Based on agreement with customer. Both cash and instalment options Lack of sufficient resources to facilitate credit sales. Cash and credit. Cash 2
Advertising Online, mainstream Diverse marketing options, cheap online marketing. Huge costs due to diverse marketing options. Diverse marketing methods. Diverse marketing methods. 4
Image Positive image No negative records so far. Little known to customers. Positive image Positive image 2

The above company analysis chart provides a lot of information that helps understand the industry’s competition and Store Carousel, Inc.’s position in the market. As has been identified, competitors like ATCO and Digitale are experienced. They offer a wide variety of products, have a considerable presence, and have more resources than Store Carousel, Inc. This means that they have the edge over the company. However, they serve a wide variety of industries, while Store Carousel, Inc. targets only a single sector. With its cheap, customized, and customer-focused products, however, Store Carousel, Inc. will easily succeed in gaining a strong position in the industry and perhaps outperform these companies both financially and in terms of market share.

Niche

Store Carousel, Inc. will serve the retail industry and will target both small and large retailers. The company is best placed to succeed in the industry based on the above analysis. Focusing on a single sector and one of the fastest-growing industries in UAE, the company, will quickly meet the customers’ needs, particularly since its products will be customized based on the customers’ needs. The following are a set of factors that elaborately define the market niche and the factors that will give Store Carousel, Inc., leverage over competitors.

  • Store Carousel, Inc. will only serve the retail industry in UAE.
  • The clientele will range from small to extensive retail facilities.
  • The company is the first of its kind in the retail sector and will benefit from reduced competition during the first few years of operation.
  • The productions of Store Carousel, Inc. will be of a more superior quality due to its specialization in the retail industry.
  • The products will be customized for each customer, and their ability to meet the customers’ needs will be unmatched.
  • Store Carousel, Inc. will adopt a low pricing strategy that will be necessitated by the low operational costs.
  • Store Carousel, Inc. could have easy access to resources to fund expansion as it will be publicly owned, unlike key competitors like Digitale. 

Marketing Strategy

Promotion

Store Carousel, Inc. will use a combination of internet and mainstream marketing options. Since the company is little known among the customers, using both channels will help in popularizing it while at the same time introducing itself to potential customers. According to Rusell (2010), internet marketing helps businesses in reaching a wider audience while at the same time, reducing the cost of marketing as compared to the use of television and other methods. The advert lasts for a longer time than in other limited forms such as radio and television. It is also important to note that many businesses, such as retailers, currently have a substantial online presence and can easily access these ads. Television and billboards will also be used as a result of their ability to reach more potential customers and their effectiveness in targeting. For instance, peak hours, such as after the news, will be selected for television ads. In contrast, strategic locations in cities will be chosen for billboards to ensure that they are easily visible to business owners. The message will inform the customers about the new company; it’s quality of products, the low prices, the ability to develop customized products, and the services like maintenance that it offers. Contacts with the company will also be provided. The company will also ensure that it secures a place in essential trade shows to show its products, intending to popularize them to business owners and meet more people. Store 

Carousel, Inc. will make all attempts to join social circles of business owners and directors of retail giants like Carrefour, Walmart, Union Co-op, Lulu Group, and Al Maya. This will be achieved by attending industry-based conferences, forums and joining online and mainstream associations in the industry. The company will also create a logo that includes some stenciled images of conveyor belts and shopping baskets/shelves. This is in addition to carefully developed slogans that are creative and that communicate the business focus. Since the company will mainly rely on online ordering, it will maintain a mail list that will be used to inform the customers of new products, improvements, and new services. Also, there will be bonuses such as free or subsidized servicing/maintenance and privileges for customers who refer other customers. Referrals will also benefit from discounts by using coupon codes that will be provided by the company. If a customer reaches a particular number of referrals, they will be placed in a higher group with better privileges. This will help in raising the popularity of the company and customer loyalty as well.

A budget of AED 500,000 will be spent on both mainstream and online marketing. The vast store will help the company to carry out an extensive marketing campaign throughout the nation for six months. This will go into the startup budget. However, varying amounts of monthly expenditure will be allocated in the operating plan budgets to ensure that the company can fund marketing campaigns such as the loyalty program explained above, attendance to trade shows, and other marketing efforts.

Pricing

The pricing of the products will depend on the features that the customers will select for their products. Store Carousel, Inc. will develop most of its components and purchase others such as bearings from other manufacturers. Customers will be required to fill out a request form, and the company will get back to them with a quote. However, these prices will be relatively lower than those offered by competitors and more so for returning clients. As was stated in the competitive analysis chart, competitors also use the same model where the customer makes a request, and they provide a quote. The products will depend on the complexity of the system and the size of the store. Offering lower prices will help in attracting more customers and retaining existing ones. As explained above, loyalty programs will be created where returning customers will be provided a different pricing package from that of new customers. Equally, the maintenance of maintenance will vary based on the kind of damage, the required replacements, and the system’s complexity. While one could consider the low pricing strategy as unsustainable for the company, it is essential to note that Store Carousel, Inc. will be able to work with this strategy as it will lower its operational costs by ensuring that it manufactures most of the components required for the systems. For those components purchased from elsewhere, purchases will be made directly from the manufacturer and in bulk to benefit from economies of scale and low prices.

Proposed Location

Store Carousel, Inc. will be situated in Dubai. This is a premium location for such a business. While it could be expensive to run the business from this location, it is expected that the largest number of customers will be from this location. Dubai has been identified as the strategic location due to its high growth rate and a large number of businesses, particularly as it continues to transform into a global marketplace. However, the company will be located in the city’s outskirts to ensure that it has sufficient space to construct a manufacturing facility and ample parking for the customers. Being in the vicinity of the city will create more convenience for the customers. While the city is located towards the end of the nation, this does not necessarily affect the business as the customers will have the flexibility of making their orders online. However, Store Carousel, Inc. will later establish other distribution centers in different locations in major cities around the nation. The interior space will be huge as the company will construct rather than rent its facilities. 

Distribution Channels

Store Carousel, Inc. will sell its products in retail through direct sales. In this case, customers will interact directly with the company and place their orders. Customers have the flexibility of placing these orders either on the company’s website or physically. In years to come, the company may also consider working with distribution and sales agents. Working directly with the customers will help the company create customized products, understand its customers more effectively, and better meet their needs. This option will also help improve service delivery while giving the company more control over the quality of the products. At the same time, it is possible to optimize the returns by eliminating commissions paid to intermediaries, which will enable the company to offer its products at a relatively lower price.

Operational Plan

Production

Products will be produced in Dubai. This is the place where the company’s premises will be located. Store Carousel, Inc. will adopt a just-in-time production model as it is the most suitable based on its needs and the business strategy. This is because every product will be developed based on the specifications provided by the customer. However, the company will also be manufacturing a wide range of components and parts assembled at once customers place their orders. For instance, bearings and belts will be manufactured in bulk and standard sizes. This will help Store Carousel, Inc. respond swiftly to the customer’s needs and lower the time that it takes to fit the systems in the customers’ stores.

Quality control will be an essential part of the production model. In this case, continuous monitoring of the products will ensure that they meet the set quality standards. The company will, from time to time, benchmark its effects with those of the industry. Store Carousel, Inc. will maintain a contact list for every customer who places an order and makes a purchase. These customers will be requested by mail to participate in a survey and provide feedback for their experience. This feedback will help the company identify ways to improve the quality of products and the customer experience. Also, every batch will be monitored for every component to ensure that they meet quality expectations. 

All customers will receive excellent services from a highly trained customer service team that will be interacting directly with the customers. Both existing and potential customers will be provided with business numbers that they can use to contact the company at any one time. The company will minimize inventory as much as possible to lower its operational costs, ensure that its products are updated, and to succeed in customizing its products. This will ensure that only vital components are produced in bulk while the production is done using the just-in-time production model. Also, the company will continuously improve its products to ensure that they align with the customers’ changing needs. As had been explained earlier, the company will allocate enormous funds for research and design while at the same time engaging customers to learn and best meet their needs.

 Location

Store Carousel, Inc. will construct its facilities rather than rent or lease space. As had been explained earlier, the company’s main premises will be based in Dubai due to the city’s high potential, the presence of many potential customers, and the availability of supplies due to the massive fact of other businesses. Therefore, no lease costs will be required for the survival of the company. The total space will be approximately 50,000 square feet. This will enable the company to manufacture the necessary components while at the same time having the required office space. This facility will serve the entire UAE. The primary reason that constructing a facility rather than owning one is that the company will have absolute control over the facility while at the same time making it relative to its needs. Since the company will be a publicly-funded entity, it will then be possible to obtain the necessary funds without affecting other operations. The building and every other item at the company will be insured from theft, fire, and damage, and whose budget will vary from time to time based on the added items within the facility. An area of approximately 75,000 square feet will also be reserved for loading purposes and parking for customers who wish to visit the company. At the beginning of production, power, and other utilities such as water will be sourced from the main power and water grid systems. A backup generator will also be installed at the facility in case of emergencies, while a large reservoir will be installed to serve as a backup water tank. In the future, however, the company will consider installing high-voltage solar panels at the roof to provide all the power requirements at the company, while the electric power coming from the primary power grid will serve as a backup. 

Legal Environment

Store Carousel, Inc. will have a legal team that will help resolve legal issues that may arise from time to time. This team will be responsible for tracking policy changes and advising the company as may be necessary. At the beginning of operations, the company will contact the local government agencies and obtain an operating license that will necessitate the facility’s construction, the beginning of the manufacturing process, and sales. At the same time, all employees will be expected to provide a health report to ensure that they best address their health needs while working in its facilities. There will be a comprehensive health cover for each employee that will be provided by the company. Also, safety measures such as the use of protective gear, fitting of fire response equipment, and the presence of emergency health kits will be observed strictly. Every employee is expected to wear protective gear whenever working. All machines should be turned off whenever not in use. For those in offices, they will be expected to wear decently. The manufacturing industry is heavily regulated to ensure its legal, safety, health, and environmental standards. To ensure compliance, the legal team will help the company understand the legal requirements and any changes while the company will mobilize resources to fund these changes. Air, water, and land pollution will be maintained to the lowest levels, while the company will also strategically place garbage bins at different locations around the company. The legal team will also be responsible for helping the company secure its trademarks, enter into agreements with other companies that could wish to use these patents/trademarks, and negotiate the use of patents/trademarks that belong to other companies.

Personnel

There will be a total of 102 employees at the beginning of operations. 20 % of these employees will serve in offices and the sales department. In contrast, the rest will help in other sections such as the manufacturing segment, logistics, and fitting of the conveyor systems to the customers’ facilities. Every one of these positions will be advertised to raise competitiveness and chances of hiring qualified personnel. Additional employees in sections such as the manufacturing facility will be hired on a contractual basis based on the demand. Others such as those in the sales department will be hired on a commission basis. All employees should be trained as per the role that they will occupy. Unskilled employees could also be considered for cleaning but need to undergo some basic training at the company before beginning their work. However, on-job-training will also be carried out during the process of induction. While the pay structure has not been prepared yet, the company will always refer to the industry average and adjust its salaries at least 5% above the industry. Employees will be divided into teams that will have different responsibilities within the company. Each team will have a supervisor who will prepare daily and weekly reports and promptly hand them over to the managers to prepare monthly and annual reports.

Inventory

Only raw materials and finished components will be stored at the company. First, the inventory should not exceed $2 million to ensure that the company has a good cash flow. However, some exceptions could be allowed from time to time, as is the case with a rise in the demand for products or a forecasted business boom. As indicated earlier, orders will be processed as fast as possible, while the assembly work will be expected to begin between 2-6 weeks after an order is placed. This lead time will allow the company to prepare the required materials and manufacture components that could not be ready.

Suppliers

Store Carousel, Inc. will be manufacturing most of its products’ components. However, some standard features such as bearings and belts will be outsourced from Advanced Technology (ADTECH) Belting Trading Company in Industrial Area 11 in Sharjah. The Technical Industrial Supply LLC is located along the Airport Road in Ras Al Khaimah. Others will be sourced from Abdulla Yousif Fakhro & Sons BSC – an international company with a subsidiary in Dubai – and Digitale, a multinational with operations in Dubai. The above companies are highly reliable and experienced in the manufacturing and engineering industries. No definite capping has been placed on the amount of inventory ordered from each of them. These amounts will vary based on the demand for the products and the price that these companies offer at any one time. Should their costs rise, Store Carousel, Inc. could consider shipping alternatives from cheaper markets such as China and mainly if they are ordered in bulk. 

Credit Policies

Store Carousel, Inc. plans to make both cash and credit sales. Clients who make cash payments will be required to deposit the money two weeks after ordering, shortly before the products are delivered to them. Those who purchase on credit will be expected to make payments within 6-12 months based on the negotiated agreement. However, those who buy on credit will miss out on various benefits, including discounts offered to cash buyers and fewer points that will determine the class that each of these clients is placed in. As had been explained earlier, these classes will determine the various benefits under the loyalty program. There will be no option for extending cash receivables. While obtaining supplies, Store Carousel, Inc. will negotiate with the suppliers to follow a model similar to what this company offers to the clients who order its conveyor systems.

Management and Organization

The business will be managed by several managerial staff who will serve different purposes within the organization. All these managers will be answerable to the CEO. A board of directors will also be responsible for oversight and formulation of strategic plans that will guide the company’s operations. Members of the managerial staff should be proven competent and useful leaders to be hired. While some of these members could be hired from outside, others will be hired in-house to promote existing employees who prove to be competent, reliable, and useful trustworthy. This will then help in promoting competence among the employees as they compete for these positions. The following is the organizational chart for these individuals.

Figure 1: Store Carousel, Inc.’s Organizational Structure

Organizational Structure

Professional and Advisory Support
  • Attorney – ST & P Attorneys and Agents Ltd.
  • Accountant – KPMG Lower Gulf
  • Insurance agent – New Shield Insurance Brokers, LLC
  • Banker – Abu Dhabi Commercial Bank
  • Consultant or consultants – Outlook Industrial Consultants
  • Mentors and critical advisor – ATCO Business Solutions

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