The Affordable Store Business Report

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Company – The Affordable Store

Subject – Enterprise & it’s Business Environment

Subject ID – C17EC

Course- Business & Finance

ID – H00279110

Wordcount – 1830

Teacher – Steven Glasgow

Executive Summary:

The Affordable Store is a start-up retail and delivery-service store in Dubai, UAE which provides a number of products at special prices. The investment will from Mr. Moksh Malhotra and from the government as this is a government venture. The idea has been selected by the UAE government among 500 others, for Dhs 500,000 for funding. The business aims to achieve the amount provided by the government in the first 2 years and expects to reach the break-even-point around the same time.

The Affordable Store will soon also be made a public limited company as well and dividends will be paid yearly. The store will offer 60 day refund policy unlike other stores which offer only 30 days. The store will try to buy all goods provided in bulk so the costs are low and so it can break-even quickly. The investors will not be liable for more than their personal investments and the company will do it’s best to reduce the amount of loss from the shareholder’s shoulders, if something of that kind occurs. Mr. Moksh Malhotra will invest from the money he has obtained legally via buying and selling of shares and a business with the same concept on a smaller level. It intends to hire Brand Lounge for aggressive marketing of the business.

The store should likely be open in about 5 months and fully function 2-3 more months if funds are steady from the government and from Mr. Moksh. The company also intends to hire KPS for it’s interior designing so that customers see a one-of-a-kind store. The Affordable Store will soon be on it’s feet.

Company Overview:

The company aims to provides a number of goods and services to it’s customers at a price cheaper than the competition.

The company is a part-government venture and that of Mr. Moksh Malhotra.

Business space will be rented out for a period of 5 years from Otay Properties Limited at Dhs 12,000/month. If, the contract is renewed this cost will rise by 15% from the following year. About Dhs 250,000 will be spent on the set up and first-time supplies for the store. The rest of the funds will be will Mr. Malhotra to run the business freely and without stress. Legal fees and marketing cost will total around Dhs 60,000.

Products and Services:

Products of the store will include fruits, vegetables, diary and all other basic eateries. Shipments will be coming in daily from all over the world. The store will have it’s own baking department and ready made, from-scratch home-like cooking as well. There will be availability to buy cell phones, home theatres and televisions and other electronics as well, in our electronics department. The store will do it’s best to procure the goods from other countries in order to achieve the best price available. It will be made sure that the goods are authentic, as there will be a specialized team to find the goods from the right sources. The store will offer special phone recharge plans working with Du and Etisalat to it’s loyalty customers.

Marketing and Industry Analysis:

Market Analysis Summary

We hope to have a high sale form the first day because our store location is near Mirdif on Sheik Zayed Road. Thus, customers are already coming to this area for the same purpose. At, a cheaper price it’ll be easier to shift to our store. We will also sell special Jordanian sweets as we are aware that there are a lot of Jordanian  immigrants in the area. Our store also learns from stores like Walmart and Costco, that were initially setup in the US which follow some of the same concept as our store. We also intend to capture Indian communities which usually tend to spend a little less, save and send money to their own countries. These customers tend to be very price conscious and we tend to cater to them in the best way possible.

Industry Analysis

With changing time everybody wishes to save more and increase their standard of living. Only if the goods are cheap, this is possible. It is very important to analyze the industry in order to understand what sells, and what will sell in the future. Our concept is very common but not on this level, especially not with specialized teams for marketing and source hunting.

Market Size and Trends

Market size usually doesn’t change much but trends do all the time. Modern times bring with it something from the past, organic food. An increasing demand for organic food has been seen since the early 2000’s as people become more conscious about their eating habits. Customers wish to continue eating their favorite treats but want it to be a lot more healthier for them. The market keeps bigger, slowly but steadily. Consumers demand high quality, fair prices, and a convenient location.

Market Segmentation

The pie chart showcases the potential percentage of age groups of customers. The Affordable Store intends to offer affordable shopping benefits to customers of different age groups with the elderly getting the most benefit as they live over pensions. Teens will be our second priority here. We expect this market to grow at a rate of 12% per year. This market will continue to rise because there are a lot of people affected by the latest legislation of VAT. The possibility of an increase in the VAT will increase business for us as we will procure goods cheaply. Thus, VAT will not affect our customers as much as the customers of our competition. Dubai is one of the fast growing economies in the world.(Refer to figure 1)

Marketing:

The Affordable Store focuses it’s marketing on customers who want more for less. Our marketing strategy will showcase everyone as equals, as in the rich and poor buying from the same place because why not. We will rent billboards across the country, especially on the routes that lead to Sheik Zayed Road where the store will be located. Our marketing team is already in contact with famous Indian, the Filipino and local actors in order to make people feel at home. Ex:

Membership

The store could offer membership to those who have visited more than 5 times, or buy something from the store everyday. The store could offer special discounts to these people thus, making them want to get them membership and be “part of the family” enabling us to grow average sales for the store

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