Redhawks Consulting

D-Bamboo Home & Garden Shop

Key Concern

• To ensure the long-term survival of D-Bamboo Home and Garden Shop

PESTEL AnalysisPolitical • 3 Branches of Government: Executive, Legislative, Judicial

• Parliamentary democracy• Political pressure from Jamaat-al Muslimeen

Economic • Turbulent economic climate• Excellent investment site for international business • Growth Rate: 5.5%• GDP Per Capita: $18,300 USD• Public debt: 26.6% GDP• Inflation:

Social • Population: 1.3 million• Literacy rate: 98.6% • Cultures: African 40%, Indian 40%, European Chinese, Middle Eastern• Religions: Catholic 26%, Hindu 22.5%, 9 others each at approximately 10% or lower • Languages: English, Caribbean, Hindustani, French, Spanish, Chinese• Crime rate: Steadily increasing over past 3 years

Technological • Internet usage: 163,000 people• Cell phones: 1,655,000 • Televisions: 425,000• Radio: 680,000

Ecological • Climate: Tropical with Rain season June-December• Natural Resources: Petroleum, Natural Gas, Asphalt• Current issues: Water and oil pollution, deforestation, soil erosion

Legal • Under English Common law• Licensing required for importing plants and seedlings

Porter’s 5 Forces

Suppliers• Customers turn into suppliers

• Several local suppliers are used

• Large network of suppliers

• Equipment from larger hardware retailers

New Entrants• Rumor of new company entering market

Buyers• Willingness to travel significant distances• 60% Working women• 15% Retirees• 10% Expatriate workers• 10% Teenagers• 5% Farmers

Substitutes• Self-grown

•Home gardens

Industry Competitors• New shop 1 km away

• New shop entering shopping mall

• Larger competitors offer similar products

SWOT AnalysisStrengths • Large product line• Offers unique and exotic plants• Loyal customer base• Extended hours of operation• Located in a high traffic area of town• Excellent bookkeeping practices

Weaknesses• Expansion of car park decreased plants

available for sale• Limited promotion• Lack of proper signage• Shop not clearly visible to motorists

Opportunities• Provide plant rental service• Relocation • Increase pricing • Partnering with local science teachers• Better control supply chain• Provide landscaping service• Customer incentive program

Threats• Nearby shop opening offering similar

pricing• Turbulent economic state of Trinidad• Competitors beginning to supply similar

items

Marketing Mix

Product- Medium- to low-end plants- Gardening supplies- Ornamental flowers- Plant and vegetable seedlings- Bonsai, turtles, aquariums

Place- Located in heavily traffic area- Recessed angle of building- Across the street from popular gas station- Main highway 200 meters from shop

Pricing- 100% markup on plants < $20- 50% markup on plants > $20- 50% markup on shop items - 35% markup on items > $150 Promotion

- Flyer distribution for grand opening and special events- Plant and balloon giveaways- 30% discount on seedlings - No outdoor sign- Posters on roadside wall periodically

Consumer60% Working women

15% Retirees10% Expatriate workers

10% Teenagers5% Farmers

Monthly Sales & Expenses2007 2008 2009

Sales Revenue

Expenses Sales Revenue

Expenses Sales Revenue

Expenses

January $19,870 $10,531 $37,730 $20,752June $34,945 $18,521 $43,475 $23,911August $25,650 $13,595 $22,910 $12,601October $34,865 $17,781 $36,235 $19,205 $21,820 $12,001December $79,945 $47,967 $88,290 $54,740 $65,000* $35,750* Note: Amounts are in Trinidad and Tobago dollars * Projections for December 2009 by D-Bamboo owner.

Estimated Financials2008 2009

Sales Revenue $491,000 $458,000

Expense $280,000 $252,000

Profit from Operating $211,000 $206,000

Note: Amounts are in Trinidad and Tobago dollars

Identification of Alternatives

1. Relocation2. Major IMC3. Limited IMC 4. Providing additional services5. Price increase6. Retreat7. Stay the same8. Customer Incentive

Alternative 1:Relocation

• $80,000 Initial Cost• Depreciated over 10 years = $8,000• $5,000 annually• 20% increase• $81,000 per year

Alternative 2:Major IMC

• $40,000 Expense• 40% (Conservative)• $189,600 per year

Alternative 3:Limited IMC

• Three times current expense• $2,250 Expense• 7.5% (Average)• $33,338 per year

Alternative 4:Additional Services

• $100,000 Total Expenses• 35% Markup on high prices• $135,000 Revenue• $35,000 per year

Alternative 5:Price Increase

• 7.5% Decrease sales volume• 5% Sales increase• ($12,582)

Alternative 6:Retreat

• Decreasing equity• Potential for growth• Not feasible

Alternative 7:Stay the Same

• Decreasing profits• Not feasible

Alternative 8:Customer Incentive

• $47,000 Discounts paid• $51,700 Additional revenue• $4,700 per year

Feasibility

• Relocation• Major IMC• Limited IMC • Providing additional services• Price increase• Retreat• Stay the same• Customer Incentive

Weighted Average Competitive Strength Analysis

Relocation Major IMC Limited IMC Additional Services Customer Incentive

Profitability 0.4 3 1.2 3 1.2 1 0.4 1 0.4 1 0.4

Brand Image 0.3 3 0.9 3 0.9 2 0.6 2 0.6 2 0.6

Customer Loyalty 0.1 1 0.1 2 0.2 2 0.2 2 0.2 3 0.3

Accessibility 0.2 3 0.6 1 0.2 1 0.2 2 0.4 1 0.2

1 2.8 2.5 1.4 1.6 1.5

Budget

• $55,000 Cash Reserve• $110,000 Credit Available

• $30,000 Cash• $70,000 Credit

RecommendationsRelocation Major IMC Limited IMC Additional Services Customer Incentive

Score 2.8 2.5 1.4 1.6 1.5

Rank 1 2 5 3 4

Direct Cost 85,000 40,000 2,250 25,000 5,000

Available Yes No Yes No Yes

Phases of Implementation

I. Customer Incentive ProgramII. RelocationIII. Integrated Marketing and

Communications CampaignIV. Milestone ReviewV. Long-term Planning

Phase I:Customer Incentive Program

• Time Frame: Upon approval of plan• For every $100 spent– 10% discount on next purchase– Encourages return of customer

Phase II:Relocation

• Time frame: 0-12 months• Ideal location:– Close to the current location– Availability of a green house– Easily seen from street– New sign installation

Phase III:Limited Integrated Marketing &

Communications • Time frame: The move - Ongoing• Use of Flyers and posters• Internet exposure– Increase in technology– Use social media

Phase IV:Milestone Review

• Time Frame: 12 months - Ongoing• Periodic Reviews– 3-6 month intervals

• Criteria– Customer Satisfaction– Owner Perception– Profitability

Phase V:Long-Term Planning

• Time Frame: 5 years +• Expansions as Budget allows– More extensive Marketing– Additional Services:• Commercial Landscaping• Science/Biology Education

Timeline

Phase I: Customer Incentive Program

Phase II: Relocation

Phase III: IMC Campaign

Phase IV: Milestone Review

Phase V: Long-term Planning

0 3

6 9 12 +Months

Spending SummaryMove 85,000.00 Customer Incentive 5,000.00 Limited IMC 2,250.00 Reserve 7,750.00 Total: 100,000.00

Revenue SummaryMove 81,900.00Customer Incentive 4,700.00Limited IMC 33,338.00Total: 119,938.00

Redhawks Consulting

D-Bamboo Home & Garden Shop