Market Analysis Summary
Green Office believes that it faces a market with many opportunities and significant demand. Green Office’s three main customer segments will be corporations, government agencies, and others which is a “catch all” category.
The office supply industry operates with several different large companies and many small ones. Within the office supplies industry there exists a niche of environmentally-friendly companies that Green Office competes against. Some of these companies serve local markets, others are Web-based for broader coverage.
4.1 Market Segmentation
Green Office has identified three customer segments that it will go after:
- Corporations: This customer group is composed of companies, typically with at least 35 employees. This customer group makes purchases for the entire organization, however sometimes different groups within the same organization will make purchases individually.
These customers are interested in the purchase of environmentally-friendly supplies because of a decision by the owners for personal/corporate belief reasons or as part of a PR program that communicates to their customers that the business is committed to the environment and makes procurements based on environmental factors.
- Government Agencies: This segment is an ever expanding group. The foundation of this segment is Former President Clinton’s Executive Order (EO) 13101 entitled “Greening the Government Through Recycling, Waste Prevention, and Federal Acquisition.” This order requires the federal government to buy recycled content and environmentally preferable products.
The order directs the head of each executive agency to incorporate waste prevention and recycling and to increase and expand markets for recovered materials. The bottom line of this EO is that federal government agencies are forced to make environmentally-friendly office supply purchases. In addition, the majority of states have enacted similar legislation for their governmental agencies. These legislative requirements for environmentally-friendly products has created a huge market for Green Office.
- Other: This is a catch all segment that contains a wide range of entities such as small companies, individuals, school districts, etc.
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4.2 Target Market Segment Strategy
As mentioned previously in the Market Segmentation section, three customer groups have been identified. Two of these, corporations and government agencies are quite attractive as customer segments. The third is used as a “catch all” category. The strategy will be the use of a targeted sales campaign that uses specific sales agents each of whom are responsible for a specific customer group.
The hiring process for these sales agents will be done with the specific group in mind. The agent responsible for the government agencies will be chosen based on his past experience and proficiency in selling to government agencies if possible. Green Office will therefore provide each experienced sales person with an exclusive territory, assisting them in achieving high sales marks for the respective customer group.
4.3 Industry Analysis
The broader industry that Green Office competes in the office supplies industry. Within that industry there are several market leaders:
- Office Depot
All three of these companies offer both local retail stores as well as mail order/Internet sales. These are the leaders with a combined 59% market share. The remaining players in the market are made up of both mail order/Internet competitors as well as local retailers. Within this market is a newly developed niche of environmentally-friendly suppliers. The majority of companies competing in this niche are mail order/Internet based.
4.3.1 Competition and Buying Patterns
Competition comes from two sources, direct and indirect competitors. Direct competitors are companies that offer similar lines of environmentally-friendly products. The main companies are:
- The Good Humans
The indirect competitors are companies within the office supplies industry who offer eco supplies, but do not concentrate on these products. Customers’ buying patterns are based on two main factors:
- Price: Both a relative comparison to standard office supplies as well as eco-friendly ones.
- Convenience: Ease of ordering, shipping schedule, variety of products.