Business Plan of Living Workshop In Taipei (Taiwan)

Introduction

Living Workshop is an emerging corporate house with a start-up business in the ever-broadening market of home merchandise. We sell excellent products of home furnishing and related field, which boast of international standards. Mr. Eric Wang is the owner of the Living Workshop and Mr. Christian Lee heads its operations.

To maintain our company, operation plans are to include the following strategies:

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• To generate external funding
• To expend more store locations
• To create a financial strategy segment that controls the cash trend

The Business:

Living Workshop has expertise in managing a massive diversification of quality products in the domain of home merchandise with equal weight on efficiency and customer service. The range of products is conveniently made available in one place giving consumers’ interests the foremost priority. There are in total four main divisions of our business which re enumerated below in a detailed format:-

Bedding: - sheets, pillows, shams, comforters, mattress pads, ensembles, dust ruffles, blankets/throws, bedspreads, futon covers, bedding accessories.

Bath: - towels, towel warmers, bathing ensembles, caddies, curtains, curtain rods, showerheads, tub accessories, shelving, bathroom furniture, hardware, bathing rugs, cabinets, shelving, mirrors/hampers, kids bathing range.

Furniture: - seating, accent furniture, tables, furniture for office, media, wine storage equipment, storage furniture, furniture for the kids, kitchen carts, luggage, headboards/beds.

Home Decoration: - food preparation gadgets, cutting boards, baking wares, sink wares, spice racks, kitchen textiles, kitchen rugs, water filtration equipment, cookbooks.

Mission:

Living Workshop relentlessly works on helping our dear customers experience the best quality of lifestyles by providing premiere home décor items and a whole range of excellent household commodities conceptualized by the best designers and developed by the best craftsmen. We are always concerned about customer satisfaction and every moment ready to deliver with the best possible solutions to the needs and queries of our customers whom we consider the most precious assets of our company.

Goals

The company of Living Workshop has certain specific and general goals to establish itself as a premier enterprise in the sector of world-class home merchandise products, which are enumerated below. To serve the customers by providing them with a whole range of options for home furnishing products of international standards. To continuously strive for developing newer and diversifying the range of products. To sincerely ensure the qualitative aspects and element of responsiveness of customer services. To provide a healthy environment for the employees to work and prosper. To whole-heartedly ensure the long-term sustainable growth of the company’s business in order to stress the interests of the stakeholders.

The Business Pyramid:

The corporate family of the Living Workshop whole-heartedly believes in the above structure of the business pyramid. It maintains that thinking and applying within the intangible framework of the above pyramid is compulsory for developing a good business, and sustaining it in the long run with stability in all spheres of functions, keeping both the customers and employees satisfied and happy (Beckwith, n.d. pg 1-2). The broad segment at the base of the pyramid signifies certain regulations for the employees, which are very essential to understand and follow sincerely. The employees will be abiding themselves to the basic laws of the company, keeping individual interests behind, and help the fellow workers to create and maintain a healthy environment to work. They need to aim for practicing environment-friendly technological expertise and toil to succeed in the arena of research and development, which will resultantly help the company to confidently take profitable strategic decisions.

Taiwan:

Taiwan is the official name of the Republic of China (R.O.C.). It is situated on the East Asian premises off the coastal strips of China. Its location is southwest of the principle isles of Japan and north-northwest of the Philippines. The oceanic island nation of Taiwan is 245 miles long and 89 miles wide (Taiwan Geography, 2005). Taiwan consists of steep mountains and major parts of the country are covered by vegetation of tropical and subtropical kind. Its climate is marine tropical in general. Natural hazards like typhoons and earthquakes are prevalent in the country. Taiwan’s total population near the end of 2008 was 23,016,257. The economy of Taiwan is totally capitalist in the framework. It is chiefly led by the exports of high-end goods and services. The major technologies of Taiwan are centered on bicycle manufacturing, laptops, semiconductor device fabrication, and biotechnology. The above diagram is a graphical representation of annual gross investment as a percentage of the gross national product (GNP) in Taiwan’s economy. It reveals a change in the amount of gross investment from the year 1997 to 2007. The gross investment comprises of both public and private investment. A notable aspect in this regard is an almost steady rate of growth in gross investment in Taiwan in the particular three-year period between 2005 and 2007. There has been a constant rate of growth of about 20% in the total amount of resources invested as a percentage of GNP. This indicates promising signals for business and commerce to flourish, as the environment of the market economy is compatible and in a prominent growth path. The Living Workshop will explore this fact further and accordingly organize its investment plans in the future to expand its business in other parts of Taiwan. For future endeavors, the Living Workshop has Kaohsiung City and Hsinchu in the radar.

In order to understand the economy of Taiwan in more depth, it is imperative to assess the data about the per capita GNP of the country. The diagram given in the previous page is a graphical representation of the total amount of per capita GNP of Taiwan (at current prices) in US $. It shows the approximate amount of the Taiwanese per capita GNP in the period between the years 1997 and 2007. In a four year period between 2004 and 2007, as revealed by the graph, Taiwan’s per capita GNP has increased from an approximate level of US $16,000 to the US $18,000, which is a rise of an enviable 12.5%. The annual inflation rate in Taiwan in fiscal 2007-2008 was between 1.5% and 2%, i.e., on the lower side. A definite economic interpretation can be drawn from this situation that the purchasing power of the Taiwanese people who are earning is on the rise, as a whole, considering the indicative data of per capita GNP and the inflation rate.

The Competitors of Living Workshop:

After analyzing the market for home furnishing products in Taipei, it has been seen observed that, as said before, there are two separate segments of companies, which will compete with the Living Workshop in this field. Analyzing IKEA - First of all, it is crucial to dissect the business of IKEA; Sweden based International Corporation in the sphere of home furnishing products. It has got 4 shops in the city of Taipei and one warehouse. It is very dominant in the European market of home furnishing products, with a total market share of a massive 76%. But in the context of the Asian market, only 6% of its total sales were generated from the region (IKEA, 2006). The Taipei City market is obviously an even more minuscule source for IKEA for the generation of sales revenue.  The other two corporate houses in the business of home furnishing products, MUJI and Working House are not so effective like IKEA, though does a considerable business in the Taiwanese market, especially in Taipei.

SWOT analysis:

Strict maintenance of the value system and giving the utmost priority to the customers’ needs as per the international standards. Conveniently provides a whole range of quality home furnishing under one roof.
Target customers of every age. The home furnishing products will be competitively priced. Original product designing concepts are used.

WEAKNESSES

A new entrant in the Taiwanese market of home merchandise. Prevalence of the factor of a considerable time lag in incurring the initial costs of setting up a business in home merchandise. Presence of the element of unawareness regarding the brand name of the Living Workshop. It is not yet proved that consumers are going to prefer the products of the Living Workshop over those of its rivals.

OPPORTUNITIES

Finding potential and taking advantage of the ever-expanding market for home furnishing commodities in Taiwan. Scopes for putting the focus on the diversification of home merchandise products.

THREATS

Prevalence of numerous experienced competitors in the sector of home merchandise products in Taipei City. This can reduce profit margins. Moreover, the rival companies can steal the business ideas and concepts of the Living Workshop. Taiwan is prone to natural disasters and unfortunately, Taipei city is not barred from this radar. The location of Taiwan is in the subtropical zone, as well as in the seismic belt. Strong typhoons or catastrophic earthquakes could damage the prospects of logistics, hence business. This tree-structure defines the company’s executive arrangements while penetrating the market. The network shown above provides the functions and the responsibilities of the different wings in a hierarchical approach. Here the stated five most important departments like the Departments of Finance, Human Resource, Marketing, R&D, and Technical Support and finally the Operations are supposed to report to the CEO of the company about the regular updates and the advancements in each of their respective fields. The business structure as planned by the CEO and the top management requires this information to pave their way through and advance towards the expansionary motive of the company. The Operations Department, as shown above, should be directly in contact with the three stores, which are to be launched, responsible for the supervision of the same, gathering the facts and providing them to the CEO.

Structural Overview: 

The functionary and the responsibility composition of the various departments can be presented in a definitely structured format, which should be followed to ensure the perfect understanding of the duties imparted to each of the mentioned departments.

Operations: 

The information regarding the types of stores and the costs associated with the space rentals and wages are needed for adopting apt policy-decisions in ascertaining the locations and cost-effective zones in establishing the stores. There can be two kinds of locations where these stores can be set up—Traditional and Non-traditional. The traditional location can be defined as a business premise or a store with a substantial or significant size (say for an example a store build upon 10000-15000 sq. feet land area) and designed in such a way so that by appearance it will be able to attract maximum population judging their tastes. The critical features to be incorporated in the designing part are the consumers’ choices, unique characteristics of the products satisfying the demands of the potential consumers, etc. This requires extensive research, proper exposure, and efficient publicizing of the commodities that the company markets along with the choice of proper locations pulling in a maximum volume of the crowd. Therefore the best-suited locations should be major urban centers or some strip mall centers belonging to the sub-urban regions. Again the Non-traditional business premises can be considered as a store that runs its business by remaining under or by combining itself with some other primary business house, or maybe within some institutional establishments like schools, colleges, universities, supermarkets, shopping malls, airports, etc. The benefits associated with these setups are that there generally exists a definite quantity of crowd in the mentioned spots, which normally does not diminish, and so there is very little chance of a decrease in the number of store visits.

Timeline:

By the timeline, the company will set up a tentative target date in respect of when to open up the store by gradual steps undertaken from a few days before the actual inauguration of the store and should try to abide by that.

Marketing:

Focusing on the company’s valuable product range and communicating with the customers through proper building up of its brand image should follow the marketing strategy. The plan must and should be constructed in such a way so that with expertise and skilled manipulation of the company’s core values and brand image, there can be penetration in the market. This will depend upon some major factors like consumer behavior, the geographic, and the cultural basis of the territory. In Taiwan, the market is fragmented, and so there is equal opportunity for all the companies who are rivals and selling homogeneous products. “Fragmented industry environments are usually ideal for focus on a well-defined market niche”. There are many strategies that can be undertaken depending upon the market condition like focusing on a particular geographic area, becoming a low-cost operator, specializing in a particular product or customer type, etc. The last two policies can’t be adopted as the company is trying to expand and spread into people belonging to every age group analyzing their tastes and meeting the demands.

Financing & Financial Operations:

The main characterizing feature of this department is to provide financial reports to the top management after conducting extensive financial analyses. It should assume the responsibility regarding tax affairs, payroll, and accounts, which are receivable and payable. All the accounts reconciliations are prepared and reviewed along with the cash flow and this department manages financial budgeting. There is a huge lot of tangible and intangible real assets of the enterprise, which need to be transacted with expertise. The dealings are mainly based on these financial securities, which include capital goods like machinery, shares, bonds, and varieties of other specialized securities. The cash generated by these assets and the loans that can be acquired by the company by selling these assets are matters of genuine management and the Financial Manager of the company who is also the chief of the Department of Finance assumes operations concerning these managements. The sales forecasting is done based on the initial capital investment of 4 million US$. A simplistic approach has chosen in predicting the sales revenue earned by Living Workshop. The target is to reach the breakeven level of initial investment by the third fiscal year at most. The growth rate as can be seen from this diagram, from the 1st to the 2nd fiscal experienced 50% and from the 2nd to the 3rd witnessed a 66.67% rise in the revenue earnings. So at the end of the 3rd fiscal, the company is reaching its target of the breakeven level of sales.

Reference

1. http://www.newscast.in/asia/taiwan.php (accessed on April 5, 2009)
2. http://www.economist.com/countries/taiwan/profile.cfm?folder=Profile-
3. http://72.14.235.132/search?q=cache:oCiOXucJyasJ:cc.shu.edu.tw/~schive/DOCUMENT/Rising%2520Phoenix(mofa).ppt+gross+investment+as+a+percentage+of+gnp+OF+TAIWAN+IN+2007&cd=3&hl=en&ct=clnk&gl=in&client=firefox-a, (accessed on 4th April 2009).
4. http://www.barwrite.com/pdf/brooklyn_paper.pdf, (accessed on 4th April 2009).
5. http://www.globalsecurity.org/military/ops/taiwan-geo.htm (accessed on 2.04.2009)

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