We are today experiencing a rapid growth in the economy of unsurpassed nature. This has been brought about by amongst other things, the relaxation of foreign exchange policies and macro economic policies geared towards attracting foreign investors into the country. The fiscal and monetary policies of the government geared towards maintaining growth with social justice have largely contributed towards this, evidenced by our economy averaging a growth rate of 7% since 1990 -- very high by international standards.
The current drive and emphasis by the government on diversification of the industrial base away from the minerals sector presents an opportunity for Palms and Bonds to make a valuable contribution towards achieving this goal. This will result in implementation of modern market research techniques and transfer of knowledge. Having undertaken a thorough and comprehensive research of the market we realized that there was a need for a specialized market research firm that focuses on producing market research reports that are tailored to the clients needs. Though there are business consultancy firms currently on the market, some of whom have been in existence for a relatively long period of time, we believe that there is a market need for one (ourselves in this instance) that particularly focuses on market research. We intend to provide services of extremely high quality -- something that cannot be over-emphasized in the international arena with the current drive towards globalization.
We appreciate that entering such a market is not a bed of roses and intend to implement an aggressive marketing strategy, well supported by the other business functions. The above prognosis influenced our decision to enter the business consultancy industry.
4.1 Market Segmentation
Palms and Bonds will be focusing on local businesses and foreign investors looking at investing in the country. These will be small, medium, and large-sized companies looking for a total service and quality work.
Our most important group of potential customers are foreign investors. These are potential investors who want to have a feel and understanding of the local markets and the opportunities, and constraints they present to them. They do not want to waste their time or risk their money looking for bargain information or questionable expertise. As they go into markets looking at new opportunities, they are very sensitive to risking their company's name and reputation.
Large corporations: one of our most important market segment is the large organization looking at penetrating new or existing markets. These companies will be calling on Palms and Bonds for development functions that are better spun off than managed in-house, for market research, and feasibility studies.
Medium-sized growth companies: particularly in rapidly expanding markets, Palms and Bonds will offer an attractive development alternative to the company that is management constrained and unable to address opportunities in new markets and new market segments.
Small-sized companies: in an increasingly competitive environment entrepreneurs are becoming more cautious in the markets they seek to enter and on establishing new market opportunities. They are often seeking for prior research to be done to identify possible markets that are suited to their resources and capabilities.
Hence the most likely types of businesses to require our services would include:
New businesses seeking investment or start-up capital
New firms looking at investing in the country
Existing companies which are expanding or introducing a new product/ service.
The table below summarizes the total market potential.
Small sized companies
Medium sized companies
Large sized companies
4.2 Target Market Segment Strategy
Our marketing strategy will be based mainly on making the right information available to the right target customer. We will ensure that our services' prices take into consideration people's budgets, and that these people appreciate the service and know that it exists, including where to find it. The marketing will convey the sense of quality in every picture, every promotion, and every publication. There is already a sense of segment strategy in the way we define our target market. We are choosing to compete in areas that lend themselves to local competition, service and channel areas that match our strengths, and avoid our weaknesses.
Our strategy calls for the development of relationships with investment bodies, attorneys, accountants and financial institutions to support our business with referrals. Interviews with commercial loan officers have indicated that there is a serious need for a professional firm like ours to help their clients in market/marketing research, and development of comprehensive and concise business and marketing plans.
4.2.1 Market Needs
Palms and Bonds intends to provide the client with more than general market information. We intend to provide accurate, relevant, specific and timely information that will enable our clients to make more accurate decisions. This information we intend to be available to our clients at competitive rates.
We understand that our target markets need more than just information but information that will enable them to make more informed decisions. Our target client wants information that is relevant to their needs and easily understandable so as to make the right decisions. We don't just intend to provide a service, but to provide one of unparalleled nature relative to the market.
4.2.2 Market Trends
Our intended markets are increasingly growing towards recognizing the difference between poor quality business consultancy service and that of high quality. This development is an important trend for us as it represents our target market, and hence opportunity. We now are having an increasing number of people who appreciate quality information and the importance of having comprehensive and concise market and business plans undertaken.
Another trend is the one toward greater use of specialized and focused consultants, instead of in-house resources. Companies are looking for out-sourcing (but unfortunately few offer such a service) and, in general, a preference for variable costs instead of fixed costs.
4.3 Positioning Statement
Although there are a number of attorneys and accountants who write or assist in writing a business plan, the reality is that these professionals provide invaluable services in the areas in which they specialize, but lack the imagination to write a comprehensive and effective business plan. The attorneys tend to dwell on the legal aspects and contractual arrangements while accountants sweat over the balance sheets, cash flow statements, product costs and income statements. Additionally, these vitally necessary professionals cannot afford to spend the many hours necessary to work on a business plan when they could be earning much more per hour concentrating on their particular field of expertise.
Our expertise lies in the ability to listen to a business owner and perceive their vision for their company over the next few years. We can envision what the business person is looking for in the future, then put it in writing and at a cost they can live with.
4.4 Service Business Analysis
The consulting "industry" is pulverized and disorganized, with many smaller consulting organizations and individual consultants for every one of the few dozen well-known companies. These other organizations often offer a service, which is not to the client's satisfaction. In addition they often claim to offer a service, which they are not fully capable of providing satisfactorily.
Consulting participants range from major international name-brand consultants to hundreds of individuals. One of Palms and Bonds' challenges will be establishing itself as a real consulting company, specializing in market research, positioned as a relatively risk-free corporate purchase. The business consulting industry may be segmented by economics and needs patterns. This incorporates some of the service type differences, but in a more practical sense:
Mainline Services: these include marketing/market research undertaken through advertising, direct mail, referrals and sales literature. Essentially these will be customized to the client's needs.
Ancillary Services: these include services such as trading licenses and company formation, which tend to be similar with not much to differentiate amongst providers except speed of execution. We intend to have an extremely efficient and 'state-of-the-art' business centre that will cater to our clients' needs. Service provider decisions don't tend to be major decisions/events covering relatively insignificant amounts.
4.4.1 Distributing a Service
Consulting is sold and purchased mainly on a word-of-mouth basis, with relationships and previous experience being, by far, the most important factor.
The major name-brand houses have locations in the main mall, and executive-level managers or partners develop new business through industry associations, business associations, chambers of commerce and industry, etc., and in some cases social associations such as country clubs.
The medium-level houses tend to be general in terms of services and specific in terms of target market -- targeting FAP seeking clients/individuals. They are not easily able to leverage their business through distribution, which we intend to be one of our competitive advantages.
4.4.2 Competition and Buying Patterns
The key element in purchase decisions made at the Palms and Bonds client level is trust in the professional reputation and reliability of the consulting firm. The most important factor in this market is the quality of the service. The majority of the investment referrals said they were not satisfied with the current plans often submitted for their approval as they were of poor quality.
4.4.3 Main Competitors
There are numerous companies operating in Gaborone who classify themselves as "business consultants". However, upon contacting these, it appears that the vast majority of these companies are bookkeeping and secretarial services companies. There are some companies that provide services similar to those offered by us and that is good, but none of them specialize in market/marketing research. The following are some of our main competitors:
The high-level prestige management consulting firms
Strengths: Prime locations managed by owner-partners with a high level of presentation and understanding of general business. Enviable reputations, which make purchase of consulting an easy decision for a manager, despite the very high prices.
Weaknesses: General business knowledge doesn't substitute for the specific market, channel, and distribution expertise of Palms and Bonds, focusing on local markets and products/services. Also, fees are extremely expensive, and work is generally done by very junior-level consultants, even though sold by high-level partners.
General Business Consultancy firms
Strengths: Expertise in certain functional areas particularly bookkeeping. Palms and Bonds intends not to compete with general business consultancy firms in these markets.
Weaknesses: The inability to spread beyond a specific focus, or to rise above a specific focus, to provide actual marketing and market research expertise, experience, and wisdom beyond the specifics.
The most significant competition is no consulting at all, companies choosing to do market research, business development and channel development in-house.
Strengths: No incremental cost except travel; also, the general work is done by the people who are entirely responsible, the planning is done by those who will implement it.
Weaknesses: Most managers are terribly overburdened already, unable to find incremental resources in time and people to apply to incremental opportunities. Also, there is a lot of additional risk in market and channel development done in-house from the ground up. Finally, retainer-based antenna consultants can greatly enhance a company's reach and extend its position into conversations that might otherwise never have taken place.
Attorneys and Accounting firms
Strengths: Able to provide sound accounting or legal advice and services with the plans being done by the partners.
Weaknesses: They often lack the imagination to write a comprehensive and effective business plan. The attorneys tend to dwell on the legal aspects and contractual arrangements while accountants sweat over the balance sheets, cash flow statements, product costs and income statements. Very little market research, if any, is often undertaken, and often ineffectively.
4.4.4 Business Participants
At the highest level are the few well-established major names in management consulting. Most of these are organized as partnerships established in major markets around the world, linked together by interconnecting directors and sharing the name and corporate wisdom. Some evolved from accounting companies and some from management consulting. These companies charge very high rates for consulting, and maintain relatively high overhead structures and fulfillment structures based on partners selling and junior associates fulfilling.
(Discussion omitted in this sample plan)
4.4.5 Competitive Comparison
We have sought to identify competition in terms of companies that satisfy the same client needs that we intend to. Our competitors are few in our main service, and, including Government agencies, numerous in our ancillary services. There will be a need to strongly differentiate ourselves from these other businesses. However on a broader scale our competition comes in several forms:
The most significant competition is no market research consulting at all, companies choosing to do market research, business development and channel development in-house. Their own managers do this on their own, as part of their regular business functions. Our key advantage in competition with in-house development is that managers are already overloaded with responsibilities, they don't have time for additional responsibilities in new market development or new channel development. Also, Palms and Bonds can approach alliances, investment bodies, and channels on a confidential basis, gathering information and making initial contacts in ways that the corporate managers can't.
The high-level prestige management consulting: XXX and international firms. These are essentially generalists who take their name-brand management consulting into specialty areas. Their other very important weakness is the management structure that has the partners selling new jobs, and inexperienced associates delivering the work. We compete against them as experts in our specific fields, and with the guarantee that our clients will have the top-level people doing the actual work.
The third general kind of competitors are the various trading and Investment bodies. These companies are formidable competitors for published market research and market forums, but cannot provide the kind of high-level customized consulting that Palms and Bonds will provide.
The fourth kind of competition are the business consultancy firms, which undertake business plans for various organizations. For example: LLL, MMM, NNN, and OOO Consultancy.
The fifth kind of competition are the numerous "fly-by-night" business consultants that claim to offer the same services as we do. Often they offer a below par service with no qualified personnel.