Reference no: EM131156946
THE CONCEPT: As an animal lover, you have always had pets -- cats, dogs, hamsters, rabbits,... and even a few reptiles and bugs. You have always been involved in animal rights issues and the humane treatment of all animals. Living in harmony with nature, the planet, and all of its inhabitants is one of your driving life principles and this permeates everything you do. If and when you start your own business, it will reflect this life-long passion.
You recently got the idea in your head to start a dog boarding business. A dog boarding business typically caters to dog-owners who need to find someone to take care of their pet when they need to go away from home. What better way to make money, you think, than to spend time with "man's best friend." Your passion for treating animals with the greatest respect and care will become your greatest differentiator in this industry. And the fact that you helped one of your friend's setup, launch and manage the swankiest dog hotel in town, "Chateau Pooch," has given you first-hand exposure to everything it takes to successfully start-up and operate this kind of business; and furthermore you have learned how to minimize costs without sacrificing quality.
Envisioning your business, you want to provide at least two services: a dog boarding service (where dog owners brings in their pets to a business location) and a dog sitting service (where a dog is taken care of in the dog-owner's home). You believe that both services are needed and you want to find a way to successfully bring them to your customer base.
You believe that there are two current customer segments that you wish to target: "The Average Pooch" and "The Pampered Pet." The Dog Whisperer, Cesar Milan, who is close family friend, has told you that a new segment called The Special Needs Canine" -- dogs with highly specialized needs due to illness, injury, or other special situations -- will soon become an expanding segment of the market as dogs' lifespans increase, and will be a large source of revenue for businesses that can service that segment. He has further told you that staff that can service such animals cost about 20% higher to employ than staff you would use to service The Average Pooch and The Pampered Pet.
You give customer segment names to the pets because they are the ones who are actually receiving the service, but you obviously keep in mind that it is their owners who are paying the bills. So you will need to understand both the representative pet in each segment as well as the representative owner.
Based on your experience with how to start a dog boarding business, you are confident that you can get the business started with an upfront investment of $24,000 for supplies, materials, etc. You further know that monthly expenses will amount to $5,000 for rent, $20,000 for wages, and $3,000 for miscellaneous expenses. Rental expense covers a high-end "out of the box" dog boarding facility with state-of-the-art features and lots of specialty items that dogs love. Wages cover well-trained staff that can deal with regular services and high end-pampering, but will NOT cover staff who can handle out-of-the-ordinary treatments or extremely complex services, medical or otherwise.
While you will be digging deeper into customer segmentation and specialized products and services, you already know the cost structure of the services & products you will be offering. Your prior experience with Chateau Pooch, as well as recent market research that you've conducted, convinces you that you want to adhere to the following pricing based on a daily rate of service provided:
- $30 - Average Pooch Daily Rate
- $42 - Pampered Pet Daily Rate
- $55 - Special Needs Canine Daily Rate
Associated costs for these packages are:
- $10 - Average Pooch Daily Cost
- $12 - Pampered Pet Daily Cost
- $15 - Special Needs Canine Daily Cost
Based on these numbers, it is clear that the least profitable segment on a daily rate basis is the Average Pooch, while the new segment, the Special Needs Canine, is twice as profitable. Your research has also made you a bit wary; a recent survey of 1000 dog owners nationwide by Modern Dog indicates that owners have been affected by The Great Recession and across the board are considering giving up dog boarding in favor of cheaper alternatives like asking friends and family to dog-sit for them; they love the high-quality service professional services like yours provide, but they just don't like the high price tag that comes along with it.
Despite the skeptical market, you are confident that your business will do well. And even though you aren't planning to take over the world with your idea, and you don't need any venture capital funding, you believe that having a well-thought out concept and completing the 5 Entrepreneurship Exercises will lead to success!!!
THE REQUIREMENTS (20 Points): Write a brief business paper describing your business, using the Entrepreneurship Building Blocks that you have been exposed to during this quarter. Be sure to use what you learned in the exercises to help write the sections in this paper. All of the information that you require to write each section should be found in the section titled "THE CONCEPT" above. If you have questions or feel like you need additional information, please don't hesitate to ask.
Please structure your paper as outlined below, and please title your sections appropriately. The paper is worth 20 points, and the point allocation is indicated below:
- ELEVATOR PITCH (2 points): Write a short (1-2 paragraph) elevator pitch that you could give to potential customers or others that you want to inform about your business. Remember to address the "6 components of An A+ Elevator Pitch" and the 9 C's for full credit.
- MISSION STATEMENT (2 points): Write a mission statement that combines elements of a standard (product, customer, value) statement and a socially focused mission statement. Refer to the Mission Statement of Patagonia (an environmentally friendly clothing company based in California), for an example of such a mission statement.
- SWOT ANALYSIS (5 points): Identify and document one strength, one weakness, one opportunity and one threat that applies to your business; these can be found in "THE CONCEPT" section of the instructions. Once you've identified the four statements, then group them into two pairs (Choose two from the following: Str-Opp, Str-Thr, Wea-Opp, or Wea-Thr). For each pair, write a supporting statement that describes how you will deal with the pair. Refer to Entrepreneurship Exercise 3 (SWOT Analysis) for guidance on how to write these supporting statements. Please make sure to clearly label all statements for easy grading.
- CUSTOMER SEGMENTATION (5 points): For the three segments identified above, use your best judgement to describe the segment according to demographic, psychographic and behavioral characteristics. Remember to describe any facts about the dog AND its owner that may be relevant. Then describe a set of services (and possibly products) that is tailored to each segment. Make sure that your service/product offering is supported by the segment description that you provide.