ISYS2061 Assignment 1 Business Ideas Report PDF

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ISYS2061 Assignment 1 Business Ideas Report 2021...

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ISYS2061 INTERNET FOR BUSINESS

ASSIGNMENT 1 BUSINESS IDEA

Presented By: … Submission Date: 13th August 2021 at 11:59 PM Tutor: … Tutorial: … Word Count: 2000 (Excluding Titles, Table of Content, Featured Page, and Reference List)

TABLE OF CONTENT Featured 1

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Introduction

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Featured 2

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Idea 1

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Idea 2

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Idea 3

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Business Justification

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About Greenflow

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Product Offering

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Competitors

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Competitive Advantages Reference List

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DIGITAL ADAPTION IS THE KEY TO SUCCESS IN NOWADAY’S MARKET CONTEXT _________________________________________________________

This report will explore three business ideas and evaluate the efficacy of digital implementation in the relevant business context.

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INTRODUCTION The COVID-19 pandemic is an astringent reminder that the macroenvironment is unexpected, fragile and can effortlessly trigger formidable consequences for businesses. This not only challenges emerging businesses, but also disrupts existing firms. Whilst longterm planning is necessary, businesses need to improvise and adapt to changes to transform their operations in a rapid timeframe (Donthu & Gustafsson 2020). Today's market is dominated by technology, making digital transformation a must if businesses wish to survive (Economist Intelligence Unit 2012). Three online business ideas were created based on this understanding, and one was chosen to be further explored. Online marketplaces, horticulture, and home furnishings are three potential industries to pursue. This report will highlight the continued expansion of these industries as well as their colossal development potential. The ability of the eCommerce ecosystem to execute these concepts will be examined.

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BUSINESS

IDEAS

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IDEA 1 Business Idea Description Business idea one involves the innovative development of a low-cost online marketing platform for small-medium enterprises (SME). The offerings comprise a wide range of marketing services, targeting new introductory SMEs. The aim is to maximise communication and connect SMEs to their target audience. Business Model The business will employ the business-to-consumer (B2C) model. B2C allows businesses to undertake direct selling, minimise barriers to entry and achieve high-profit margins. This business model is influenced by several macro conditions, including rival competition, consumer needs, and the demand for easily accessible and low-cost marketing services. Focusing on this direct approach increases service adoption rates and future brand awareness (Moorman et al. 2019). Revenue Model The sales revenue model has been selected, as income derives from the marketing services offered. This model is highly dependent on sales rates, pricing, and strong customer relationships. This revenue model is ideal due to its simple structure and suitability for SMEs (Alturas & Santos 2009). Competitive Advantage Utilising a low-cost pricing strategy and focusing on employing advanced technology to maximise marketing efficiency maintains contrast with other competitors in the market and allows progressive growth and additional revenue streams in the future. Through the supply of premium services at a reasonable price, this business can increase market share and become the preferred choice over traditional marketing businesses.

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IDEA 2 Business Idea Description The COVID-19 pandemic has inspired the creation of business idea two. This idea commits to alleviate pandemic-related environmental impacts and depression rates (Heo et al. 2021) and encourage healthier habits. Idea two introduces a smart indoor-planting kit, providing young audiences passionate about planting, technology, and interior design, a luxurious planting experience. Business Model Similarly, business idea two will utilise B2C model. Whilst a B2C eCommerce model can be restrictive in that consumers are not able to physically observe and purchase smart-kits, it is highly effective in educating consumers about the smart plant-kit and allows easy direct purchasing. Restrictions can be overcome through heavy communication with the target market of Generation Z and Millennial individuals who are passionate about planting, interior design, and technology. Revenue Model Sales revenue model will be utilized to generate profit. The sales revenue model is the most common model for eCommerce businesses and is suitable as a product is being sold. Utilising this revenue model allows the business to maximise sales functions and boost growth sustainably in the long run (Alturas & Santos 2009). Competitive Advantage There are many businesses across different industries introducing environmentally friendly products, which makes it difficult to differentiate (Henderson 2015). However, this business possesses distinction as it will utilise advanced technology and focus on offering product versatility through its plant range.

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IDEA 3 Business Idea Description The third idea will be an eco-friendly home décor brand. The desire of this idea is to bring quality products that will enhance the living and enjoyment of Australian homes. The unique aspect of this idea is that products will be manufactured in-house using sterile recycled material such as glass, plastic, and wood. In addition, the business will center its focus on product design and development by increasing product diversity and consumer options. Business Model The business model will mainly be B2C, operating online. This allows new customers to access and learn about the products, hence triggering a purchase. Eventually, the business will additionally run a business-to-business (B2B) side-system. This will allow the business to diversify its income stream, connect with more partners in the industry, and establish complementary relationships. Although there are underlying challenges in utilising both B2C and B2B models, they are more effective in achieving greater sales volumes and brand awareness (Ackerman 2018). The target market will be Millennials and Gen Z individuals who are pursuing a sustainable lifestyle and a strong interest in interior design. Heavily influenced by social media, they are likely to share their product experience and improve awareness (Sago 2010). Revenue Model The revenue model will be sales revenue, which involves direct selling to customers and suppliers. This model is the most effective for this idea as it is based on inbound marketing and functional in marketplaces with many buyers and progressive growth (Alturas & Santos 2009). Competitive Advantage Sales and margins have been affected by the growing focus on home décor and furnishings throughout the retail space and weaker customer bases (Burgio-Ficca 2021). Having understood this issue, this business will focus on improving customer satisfaction through maximising production and creating an efficient logistics chain. The service and product quality of this business will also differentiate it from competition and acquire higher recognition.

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BUSINESS IDEA

JUSTIFICATION Upon critically evaluating the feasibility of the three ideas, the second idea was selected for execution. The COVID-19 pandemic has caused several complications in society, such as unemployment and quarantine. This has significantly increased instances of stress and depression (O’Sullivan, Rahamathulla & Pawar 2020). Having identified these issues, the second idea was selected to introduce smart indoor-planting kits to improve home living conditions. Furthermore, the pandemic has shaped a more hygienic and environmentally focused mentality in society. According to (Mullins et al. 2021), adoption of healthy living styles and gardening have increased during quarantine. This idea not only aims to bring nature to homes, but also positively modifies the living environment and creates healthy, sustainable hobbies. There are several limitations to these ideas including high product research-anddevelopment costs, intensive pre-commercialisation trialing, targeting the right audience, and encouraging adoption. In addition, supply and logistics costs are also detrimental to profit in the short-run and challenge operations (Munim & Schramm 2018). However, to compromise these challenges, a detailed strategic marketing plan will be implemented as well as development of long-term performance business goals. This will provide a concrete foundation for the business to soar. 9

WHY GREENFLOW? The name selected for this business is Greenflow; a combination of ‘Green’, symbolizing freshness and hope, and ‘flow’, representing consistency and development. Greenflow’s mission is to bring nature closer to people and provide happiness.

ABOUT GREENFLOW Greenflow is an online plant and smart-tools retailer. The business was created with the vision to become consumers’ first indoor plant choice. What makes Greenflow unique is its technology adaption and inhouse growing of plants. Apart from the smart planting-kit, they offer decorative indoor plants, seeds, plant food and other related items.

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PRODUCT OFFERING The two categories that Greenflow will offer are smart-gardening tools, and plants. The smart-gardening tools category is opportunistic as it has not been fully developed. Additionally, the plants category is developed and an attractive segment. Greenflow will specialise in this segment by providing a variety of exotic indoor plants to increase diversity in Australian homes and providing more choices for consumers.

To successfully penetrate the smart-gardening tools category, Greenflow will introduce three smart planting-kit models. The models will be Green Connect, Green Connect Pro, and Green Connect Float (figure 1). The Green Connect and Green Connect Pro will be designed with the same appearance, dimensions, and functionality. However, Green Connect Pro will be the premium model, priced slightly higher, and will include features such as Bluetooth capability to connect to the Greenflow smart phone app that allows users to track the growth, water usage, health, and life of their plant. Green Connect Float will be designed with a flatter and smaller pot shape, intended to be hung up on the wall, and will possess the same functionality. Greenflow will enter the plants category with their products of butterfly plant, Swiss cheese vine and Bird of Paradise. These plants are exotic and would add a tropical touch to the consumer’s home, as well as appeal to the consumer’s sense of pride and increase the likelihood that they would share their experience with Greenflow to others.

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Figure 1: Green Connect Smart Plant Kit Mock-up

Figure 2: (Left to Right) Butterfly Plant, Swiss Cheese Vine, and Bird of Paradise Plant

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COMPETITORS Competitor

Strengths

- Wide variety of indoor and outdoor plants. Online plant retailer specialising - Effectual execution of in pre-potted plants, fertiliser, SEO (search engine soil, and compost and watering optimization), enhancing tools. Google search recommendations. Plants in a Box targets plant - Utilise trending keywords lovers, particularly the female demographic aged between 20 to to maximise search outcome. 35. Their website utilises - Simple website interface numerous gentle adjectives as and navigation. well as images that present significant aesthetic components - Strong focus on content marketing, hence adding to attract their target audience educational value to (Plants in a Box 2021). business. - Attractive social media. - Both online and physical Diaco’s Garden Nursery presence. Diaco’s is a Melbourne-based - Product diversity nursery that offers a range of large indoor and outdoor plants. - High satisfaction rate. - Modern and simple website interface. Diaco’s targets individuals and - Execute content businesses passionate about

Plants in a Box

Weaknesses - Limited information about the company. - Focusing mainly on written content and not incorporating videos to improve attraction. - High price on biosecurity and freight protection. - Communication only through email or online inquiry form.

- Only offer outdoor plants. - Limited plant sizes. - High pricing, which can detriment sales during quiet seasons.

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gardening, landscaping, and garden design. They utilise both B2C and B2B models, which allows them to diversify their income stream and grow rapidly within the industry (Diaco’s Garden Nursery 2021).

marketing in numerous ways including blog writing, video, and photography.

Folia House

- Strong focus on product offerings and product line diversity. - Competent customer care service. - High interaction with audience on social media. - Reasonable pricing.

Folia House is an online nursery and indoor plant business, established in 2016, placing them in the introduction phase. Their indoor plant offering is dynamic, ranging from rare plants, house plants and baby plants, to succulents and cacti.

- Minimal marketing plan including content and video marketing. - Low investment in product images. - Limited information about the company such as their vision or longterm objectives.

Folia House’s target audience is mainly young people with a passion for planting and interior design (Folia House 2021). It has been identified that Plants in a Box and Diaco’s are Greenflow’s indirect competitors and Folia House is a direct competitor. Plants in a Box and Diaco’s are established businesses with a clear position in the market, hence it is challenging for Greenflow to directly compete with them as an arising online business. However, Greenflow can actively monitor their operations including their pricing and marketing campaigns to improve its own. Moreover, Greenflow can focus on those businesses’ weaknesses and take that into consideration to improve itself. Furthermore, Folia House has a similar business model and operations to Greenflow, making it the main rival to the business. This suggests that Greenflow needs to undertake strategic planning to tackle this opponent. For example, focusing on marketing can improve Greenflow’s brand awareness and gain more competitiveness against Folia House.

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COMPETITIVE ADVANTAGES Greenflow has decided to differentiate through the Green Connect smart indoor plantingkit. Competitors mainly offer traditional vases and pots, which shows a lack of innovation and interest. The introduction of Green Connect will allow Greenflow to attract younger demographics who are passionate about planting and technology. Utilising technology and innovative engineering will allow Greenflow to differentiate and achieve brand awareness. Additionally, Greenflow will compete with a reasonable and affordable price. The business idea not only focuses on generating organic profit, but also aims to deliver meaningful value to the community. This includes encouraging planting and bringing a new touch to Australian homes. This differentiation will create a positive impression for customers and eventually boost brand equity. Ultimately, Greenflow will also conduct strategic marketing plans, both long-term and shortterm. Short-term marketing plan will involve aggressive marketing tactics to boost sales and amplify brand awareness, whilst long-term plans will focus on building the business image and acquiring market share. Greenflow will invest in software applications that allows customers to shop, receive promotions and sign up for loyalty programs. Having understood the lack of innovation, technology implementation and effective marketing planning present amongst competitors, Greenflow has captured the opportunity to fulfill minor gaps and penetrate the market.

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REFERENCE LIST Ackerman, T 2018, How B2B And B2C Marketing Are Converging Today, Forbes, viewed 9 August 2021,

Alturas, B & Santos, MC 2009, ‘Direct Selling: Consumer Profile, Clusters and Satisfaction’, European Retail Research, vol. 23, no. 1, pp. 47-68. Burgio-Ficca, C 2021, Online Home Furnishing Sales in Australia, Industry Report, IBISWorld, viewed 10 August 2021, IBISWorld Database. Diaco’s Garden Nursery 2021, About, Diaco’s Garden Nursery, viewed 10 August 2021,

Donthu, N & Gustafsson, A 2020, ‘Effects of COVID-19 on business and research’, Journal of Business Research, vol. 117, pp. 284-289. Economist Intelligence Unit 2012, Agents of Change: The Future of Technology Disruption in Business, The Economist, viewed 9 August 2021,

Folia House 2021, Home, Folia House, viewed 11 August 2021,

Henderson, R 2015, ‘Making the Business Case for Environmental Sustainability’, Harvard Business School Working Paper, no. 15-068. Heo, S, Desai, MU, Lowe, SR & Bell, ML 2021, ‘Impact of Changed Use of Greenspace during COVID-19 Pandemic on Depression and Anxiety’, International Journal of Environmental Research and Public Health, vol. 18, no. 11, p. 5842. Moorman, C, van Heerde, HJ, Moreau, CP & Palmatier, RW 2019, ‘Challenging the Boundaries of Marketing’, Journal of Marketing, vol. 83, no. 5, pp 1-4. Mullins L, Charlebois S, Finch E & Music J 2021, ‘Home Food Gardening in Canada in Response to the COVID-19 Pandemic’, Sustainability, vol. 13, no. 6, p. 3056. Munim, Z, H & Schramm, HJ 2018, ‘The impacts of port infrastructure and logistics performance on economic growth: the mediating role of seaborne trade’, Journal of Shipping and Trade, vol. 3, no. 5.

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O’Sullivan, D, Rahamathulla, M & Pawar, M 2020, ‘The Impact and Implications of COVID-19: An Australian Perspective’, The International Journal of Community and Social Development, vol. 2, no. 2, pp. 134-151. Plants in a Box 2021, Plants in a Box, Plants in a Box, viewed 10 August 2021,

Sago, B 2010, ‘The Influence of Social Media Message Sources on Millennial Generation Consumers’, International Journal of Integrated Marketing Communications, vol. 2, no. 2, pp. 7-18.

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