Business Plan
Digital Picture Frames for Fine Art Applications
Mission Statement
To create and dominate a market of Digital Picture Frames for Fine Art
Applications, enabling Artists, Art Dealers, Galleries, and Art Patrons to have a synergistic relationship and work
together in an organization using the Sociocratic Circle Method.
Marketing Plan
Our strategy is to focus on the new and unique niche market of Digital Picture Frames for Fine Art
Applications.
Pricing:
We will set prices very low to start because the need for near term income is not as critical as is the need for rapid market penetration for eventual market control.
Promotion
To effectively promote and advertise to this new and
unique niche market we will use aspects of both a PUSH STRATEGY that
maximizes the use of all available channels of distribution and a PULL
STRATEGY which requires direct interface with the end user.
Distribution
Because there are three distinct
types of customers, Artists, Art Sellers and Art Patrons, Direct Sales
and On-premise Sales will most likely be best.
The Environment
The only Environmental Factors that are likely to have significant impact on the enterprise are;
- Emerging technology - Technological changes that are occurring may or may not favor the actions of our enterprise.
- Cultural trends - Cultural changes such as fashion trends and life
style trends may or may not support our penetration of the
market
The Prospect
We have defined our
prospects characteristics as three distinct types of customers, Artists, Art Sellers and Art Patrons.
Factors we have considered include:
- The potential for market penetration of new prospects, how aware the prospects
are of DPF, competition, and growth rate of the industry.
- The prospect's willingness to pay for a new type of product/service with greater capabilities than what has been available.
- The amount of time it will take a prospect to make a purchase
decision will be affected by the prospects confidence in DPF, the number of people
involved in the decision, and the risk involved in making the purchase decision.
- The prospect's willingness to pay for DPF is determined
by their understanding,or lack thereof its capabilities and benefits, their ability to pay and
their need for characteristics such as quality, durability,
reliability, ease of use, uniformity and dependability.
- Likelihood of adoption by the prospect is based on their attitude about change, their perception
of the benefits, barriers that exist to incorporating the DPF into
daily usage, and the credibility of it.
The Product/Service
The factors that we
consider to indicate
DPF products/services as readily acceptable in the marketplace include:
- Whether some or all of the technology for the offering is proprietary to the enterprise.
- The benefits the prospect will derive from use of DPF.
- The extent to which common introduction problems can be avoided
such as lack of industry standards, unavailability of
materials, poor quality control, regulatory problems and the inability
to explain our benefits of DPF to the prospect.
- The potential for product obsolescence as affected by our
enterprise's commitment to DPF development, it's proximity
to physical limits, the ongoing potential for improvements, the
ability of the enterprise to react to technological change and the
likelihood of substitute solutions to the prospect's needs.
- Impact on customer's business as measured by costs of trying out DPF, how quickly the customer can realize a return from their
investment in DPF, how disruptive the introduction of DPF is to the customer's operations and the costs to start using it.
- The complexity of DPF as measured by the existence of
standard interfaces, difficulty of installation, number of options,
requirement for support devices, training and technical support and the
requirement for complementary product interface.
Our Enterprise
An honest appraisal of the strength of our enterprise is a critical
factor in the development of our strategy. Factors we consider
include:
- Our capacity to be leader in low-cost production operation considering
cost control infrastructure, cost of materials, economies of scale,
management skills, availability of personnel and compatibility of
manufacturing resources with the product's requirements.
- Our enterprise's ability to construct entry barriers to competition
such as the creation of high switching costs, gaining substantial
benefit from economies of scale, exclusive access to or clogging of
distribution channels.
- Our enterprise's ability to sustain its market position is
determined by the potential for competitive imitation, resistance to
inflation, ability to maintain high prices, the potential for product
obsolescence and the 'learning curve' faced by the prospect.
- The prominence of the enterprise.
- The competence of the management team.
- The adequacy of our enterprise's infrastructure in terms of
organization, recruiting capabilities, employee benefit programs,
customer support facilities and logistical capabilities.
- The freedom of the enterprise to make critical business decisions
without undue influence from distributors, suppliers, unions,
creditors, investors and other outside influences.
- Freedom from having to deal with legal problems.
Development
Regular and periodical review of the strength and viability of the DPF
development program heavily influences the direction of our
strategy. Factors which we consider include:
- The strength of the development manager including experience with
personnel management, current and new technologies, complex projects
and the equipment and tools used by the development personnel.
- Personnel who understand the relevant technologies and are able to
perform the tasks necessary to meet the development objectives.
- Adequacy and appropriateness of the development tools and equipment.
- The necessary funding to achieve the development objectives.
- Design specifications that are manageable.
Production
Our enterprise's production organization will be reviewed on a regular basis with
respect to their ability to cost effectively produce products/services.
The following factors will be considered:
- The strength of production manager including experience with
personnel management, current and new technologies, complex projects
and the equipment and tools used by the manufacturing personnel.
- Economies of scale allowing the sharing of operations, sharing of production and the potential for vertical integration.
- Technology and production experience
- The necessary production personnel skill level and/or the enterprise's ability to hire or train qualified personnel.
- The ability of our enterprise to limit suppliers bargaining power.
- The ability of our enterprise to control the quality of raw materials, component parts and production.
- Adequate access to raw materials, component parts and sub-assembly production.
Marketing/Sales
We analyze our marketing and sales organization for its strengths and current activities. Factors that we consider include:
- Experience of Marketing/Sales manager including contacts in the
industry (prospects, distribution channels, media), familiarity with
advertising and promotion, personal selling capabilities, general
management skills and a history of profit and loss responsibilities.
- The ability to generate good publicity as measured by past
successes, contacts in the press, quality of promotional literature and
market education capabilities.
- Sales promotion techniques such as trade allowances, special pricing and contests.
- The effectiveness of our distribution channels as measured by
history of relations, the extent of channel utilization, financial
stability, reputation, access to prospects and familiarity with our
offering.
- Advertising capabilities including media relationships, advertising
budget, past experience, how easily the DPF can be advertised and
commitment to advertising.
- Sales capabilities including availability of personnel, quality of
personnel, location of sales outlets, ability to generate sales leads,
relationship with distributors, ability to demonstrate the benefits of
the offering and necessary sales support capabilities.
- The appropriateness of the pricing of DPF as it relates
to competition, price sensitivity of the prospect, prospect's
familiarity with the offering and the current market life cycle stage.
Customer ServicesThe strength of our customer service function has a strong
influence on long term market success. Factors considered include:
- Experience of the Customer Service manager in the areas of similar offerings and
customers, quality control, technical support, product documentation, sales and
marketing.
- The availability of technical support to service our DPFs after
they are purchased.
- One or more factors that causes our customer support to
stand out as unique in the eyes of the customer, including but not limited to
our experience as Fine Artists.
- Accessibility of service outlets for the
customer.
- The reputation of our enterprise for customer service.
Conclusion
After defining our strategy we are using the information we have
gathered to determine whether this strategy will achieve the objective of making
our enterprise competitive in the marketplace. Two of the most important
assessments we used are described below.
Cost To Enter Market
This is an analysis of the factors that will influence
our costs to achieve significant market penetration. Factors considered
include:
- Our marketing strength.
- Access to low cost materials and
effective production.
- The experience of our enterprise.
- The complexity
of introduction problems such as lack of industry standards, unavailability of
materials or component parts, poor quality control, regulatory problems and the inability to
explain the benefits of the DPFs to the prospect.
- The effectiveness of our
infrastructure in terms of organization, recruiting capabilities, employee
benefit programs, customer support facilities and logistical capabilities.
- Distribution effectiveness as measured by history of relations, the extent of
channel utilization, financial stability, reputation, access to prospects and
familiarity with DPF.
- Technological efforts likely to be
successful as measured by the strength of our development organization.
- The
availability of adequate operating capital.
Profit Potential
This is an analysis of the factors that could influence the potential for
generating and maintaining profits over an extended period. Factors considered
include:
- Potential for competitive retaliation is based on the
competitors resources, commitment to the industry, cash position and
predictability as well as the status of the market.
- Our ability to
construct entry barriers to competition such as the creation of high switching
costs, gaining substantial benefit from economies of scale, exclusive access to
or clogging of distribution channels and the ability to clearly differentiate
our DPFs and services from the competition.
- The intensity of competitive
rivalry as measured by the size and number of competitors, limitations on
exiting the market, differentiation between DPFs and our services, and the
rapidity of market growth.
- The ability of our enterprise to limit
suppliers' bargaining power.
- Our ability to sustain our market position is
determined by the potential for competitive imitation, resistance to inflation,
ability to maintain high prices, the potential for product obsolescence and the
'learning curve' faced by the prospect.
- The availability of substitute
solutions to the prospect's need.
- The prospect's bargaining power as
measured by the ease of switching to an alternative, the cost to look at
alternatives, the cost of the DPFs, the differentiation between our customized
DPFs and services and the competition's, and the degree of the prospect's
need.
- Market potential for new products and services considering market
growth, prospect's need for our services, the benefits of the services, the
number of barriers to immediate use, the credibility of the services and the
impact on the customer's daily operations.
- The freedom of the enterprise to
make critical business decisions without undue influence from distributors,
suppliers, unions, investors and other outside influences.
