MGMT20143 Assessment 2

MGMT20143 Assessment 2 Idea Generation and Business Model Development Business Idea- Green Timber Clothing (Sustainable apparel at reasonable price) 1 | P a g e

Executive Summary An Australian firm named Green Timber Clothing was conceptualised in response to this business model. While there is a huge demand for sustainable apparel in Australia, the expensive cost prevents many Australians from purchasing it. The proposed approach to doing business is around making advantage of internet distribution channels and economies of scale to provide consumers competitively priced goods. Our early investigation into the current conundrum of expensive sustainable apparel is complete, and we are looking for the market gap or consumer challenges that have led to it. By operating in this way, the company has built a recognisable brand that responds to consumer demand and offers items at affordable prices. The nine interconnected parts of a business model are the value propositions, customer segments, key business partners, key activities, distribution channels, cost structure, revenue stream, customer relationships, and key resources. To that end, we have conducted a thorough research to pinpoint all of the factors that might have an influence on the company's long- term viability. Low operating costs are a strong indicator of the organization's potential for success, which may be traced back to the prioritisation of important feasibility areas and success factors. The business plan's projection of the company's future performance places a premium on using AI and placing an emphasis on online sales. 2 | P a g e

Introduction Developing a business model is an essential aspect of initiating a company as it enables entrepreneurs to discern opportunities for gaining a competitive edge and offers valuable understanding of the organization's functioning. The business model canvas is a very efficacious tool for achieving this objective as it facilitates the identification of critical factors that will impact a company's future performance and enables the development of effective strategies to address these challenges ( Thorisdottir & Johannsdottir, 2019). The present business plan establishes the foundation for the initiation of Green Timber, a digitally-based company specialising in environmentally sustainable apparel. The majority of Australian citizens are unable to purchase the sole sustainable clothing options now offered in the market, mostly due to their excessively high pricing. This group is endeavouring to modify it. The company's products will have competitive prices because of the company's use of online retailing platforms for selling and economies of scale in manufacture. The report will go over the nine pillars of the business idea, including the essentials for success, the essentials for feasibility, and the risk assumptions. Finally, some recommendations for enhancing the business strategy will be included in the report. Identified Problem As individuals gain increased awareness of the correlation between greenhouse gas emissions and the escalation of global temperatures, they modify their purchase choices. There is currently a heightened focus on the purchase of ecological clothes. In Australia, sustainable clothes options are mostly offered by renowned labels such as Par Moi, Sister Studios, and Collective Closet, among others. The production of these things in an ecologically friendly manner incurs significant costs, thereby resulting in higher pricing for consumers ( Su et al., 2019). As a result of budgetary limitations, consumers in Australia are actively seeking a sustainable clothing brand that offers a more cost-effective alternative compared to other market competitors. Benefits Generated by the Idea In order to address this concern, we propose the introduction of an environmentally conscious apparel brand named Green Timber Clothing into the Australian market. The proposed business model would exclusively operate in an online environment, aiming to capitalise on the economies of scale associated with procuring raw materials. 4 | P a g e

The benefit to the Customers: Costs can potentially be diminished due to the realisation of economies of scale, enabling the firm to effectively cater to the demands of Australian customers by offering affordably priced and ecologically sustainable clothing options. The firm intends to exclusively distribute its products through digital channels, hence minimising operational costs and enabling the transfer of these cost savings to customers in the form of reduced pricing ( Holtström et al., 2019). The benefit to the Organization: Businesses might potentially reduce expenses and increase revenues by leveraging economies of scale through exclusive reliance on online marketplaces. Business Model The firm intends to integrate aspects of both the retailer and manufacturer business models to facilitate the production and distribution of environmentally sustainable fashion items through conventional and digital sales channels. Building Blocks A comprehensive overview of the nine fundamental components that constitute the framework, all of which hold significant relevance to the operational and strategic requirements of the organisation (Refer to appendix). A sustainable apparel brand that is primarily promoted through online channels would mostly include of the following elements: Customer Segment : This segment of consumers represents the company's target audience. Green Timber Clothing will target customers in the 35-44 age range, since this group has been found to be highly engaged in Australian online retail ( Shrivastava et al., 2021). Key Partners : Collaborations amongst businesses to share the market's limited resources. Green Timber Clothing has settled on eBay Australia as its primary distribution and sales platform. This group will assist the company with digital marketing, product returns, and customer assistance. Value Proposition : The value proposition of a firm refers to the distinctive array of benefits it offers in comparison to its competitors, extending beyond its core product or service. Green Timber Clothing will provide customers with other options for replacement after a period of two months, in addition to the convenience of offline purchase and pickup services ( Johnson & Plepys, 2021). 5 | P a g e

Connections among target market, partners, and value proposition: The company's preference for eBay shows that its target demographic of 35-44-year-olds are passionate online buyers. Online sales will feature the replacement option, improving the value offer- online buyer relationship. Relationship among Key Resources, Critical Activities, and the Cost Structure : Costs associated with vital resources like skilled labour, a website manager, or organic inputs are intrinsically tied to the financial plan's cost breakdown ( Dicuonzo et al., 2020). Relationships among the value proposition, distribution channel, and customers : As fashion professionals provide tailored, automated advice and help completely online, these services' customer relationship management activities are tightly related to the online sales channel or distribution channel. Critical Success Factors Critical success elements are examined to determine if a business has been successful. Key elements that will shape the future of Green Timber Clothing include:  It offering low-priced sustainable fashion products in a market where other significant companies are offering the identical items at excessive costs will attract the attention of the wide client base towards the brand, leading to a high sales ratio. Even if it fails to persuade customers who prefer to shop at luxury brands, this will become an essential part of the company's success ( Li et al., 2020).  The second critical element is making all sales online, which may save costs but may scare away clients accustomed to shopping in person. Critical Assumptions and Risk Here are some potential assumptions and risks that might affect Green Timber Clothing:  Risk of customers lacking familiarity with brand : A company's rate of growth might be slowed if it relies on eBay sales but fails to differentiate itself in the eyes of its target market. However, it is possible that the product's popularity will explode unexpectedly.  Financial Risk : It is conceivable that the corporation will apply for a loan from a financial institution in order to satisfy this requirement. If the firm is unable to secure a loan from a financial institution, it may turn to less formal lenders, including friends and family ( Ahmad et al., 2020). 7 | P a g e

Feasibility Evaluation The success of a corporation can be judged through a feasibility analysis. Long-term success required the organisation to demonstrate its proficiency in many key areas. The following is Green Timber Clothing's success strategy:  Product Feasibility: A product's market potential grows in proportion to how well it solves problems for buyers. Affordable, eco-friendly clothing is in high demand, and this label will be able to provide that need.  Target Market Feasibility: Among online shoppers, those between the ages of 35 and 44 make up a sizable percentage of the demographic. The product's popularity will skyrocket among that demographic as a result ( Viciunaite & Alfnes, 2020).  Organization Feasibility: If the corporation adopts frugal practises, it won't have to spend a lot of money building stores to market its products. The corporation has decided to shift its emphasis away from brick-and-mortar stores and towards growing its online marketplaces.  Financial Feasibility: The production facility, which will also function as the company's central core for operating its website, will require $1,000,000 to get started ( Thorisdottir & Johannsdottir, 2019). This business plan is doable because of the ease with which one may obtain funding from banks and personal networks. Conclusion The report concluded that financial forecasts for Green Timber Clothes show that their strategy to deliver eco-friendly clothing at cheap pricing is highly likely to succeed. All the boxes are checked in terms of product quality, market potential, company strategy, and financial stability. Companies can mitigate the negative effects of weak brand identification among clients and financial risk by producing goods in bulk and selling them online. Risk mitigation strategies and approaches can be put in place to eliminate any threats to the success of the company strategy in question. Recommendations The many suggestions that Green Timber Clothing can take are as follows:  The firm should put a lot of money into advertising its website since it risks having low brand awareness among customers if it relies entirely on eBay to sell its products. while stressing the importance of online purchases to build brand recognition. 8 | P a g e

References Ahmad, S., Miskon, S., Alabdan, R., & Tlili, I. (2020). Towards sustainable textile and apparel industry: Exploring the role of business intelligence systems in the era of industry 4.0. Sustainability , 12 (7), 2632. https://www.mdpi.com/2071-1050/12/7/2632/pdf Dicuonzo, G., Galeone, G., Ranaldo, S., & Turco, M. (2020). The key drivers of born- sustainable businesses: evidence from the Italian fashion industry. Sustainability , 12 (24), 10237. https://www.mdpi.com/2071-1050/12/24/10237/pdf Goworek, H., Oxborrow, L., Claxton, S., McLaren, A., Cooper, T., & Hill, H. (2020). Managing sustainability in the fashion business: Challenges in product development for clothing longevity in the UK. Journal of Business Research , 117 , 629-641. https://irep.ntu.ac.uk/id/eprint/34228/1/11676_Oxborrow.pdf Holtström, J., Bjellerup, C., & Eriksson, J. (2019). Business model development for sustainable apparel consumption: The case of Houdini Sportswear. Journal of Strategy and Management , 12 (4), 481-504. https://www.emerald.com/insight/content/doi/10.1108/JSMA- 01-2019-0015/full/html Johnson, E., & Plepys, A. (2021). Product-service systems and sustainability: Analysing the environmental impacts of rental clothing. Sustainability , 13 (4), 2118. https://www.mdpi.com/2071-1050/13/4/2118/pdf Li, X., Cao, J., Liu, Z., & Luo, X. (2020). Sustainable business model based on digital twin platform network: The inspiration from haier’s case study in China. Sustainability , 12 (3), 936. https://www.mdpi.com/2071-1050/12/3/936/pdf Murzyn-Kupisz, M., & Hołuj, D. (2021). Fashion design education and sustainability: towards an equilibrium between craftsmanship and artistic and business skills?. Education Sciences , 11 (9), 531. https://www.mdpi.com/2227-7102/11/9/531/pdf Shrivastava, A., Jain, G., Kamble, S. S., & Belhadi, A. (2021). Sustainability through online renting clothing: Circular fashion fueled by instagram micro-celebrities. Journal of Cleaner Production , 278 , 123772. https://www.sciencedirect.com/science/article/am/pii/S0959652620338178 Su, J., Watchravesringkan, K., Zhou, J., & Gil, M. (2019). Sustainable clothing: Perspectives from US and Chinese young Millennials. International Journal of Retail & Distribution 10 | P a g e

Management , 47 (11), 1141-1162. https://pdfs.semanticscholar.org/47b6/2c6a941f2abec3ec02bfc0e239e93e19e797.pdf Thorisdottir, T. S., & Johannsdottir, L. (2019). Sustainability within fashion business models: A systematic literature review. Sustainability , 11 (8), 2233. https://www.mdpi.com/2071- 1050/11/8/2233/pdf Tunn, V. S., Bocken, N. M., van den Hende, E. A., & Schoormans, J. P. (2019). Business models for sustainable consumption in the circular economy: An expert study. Journal of cleaner production , 212 , 324-333. https://research.tudelft.nl/files/47865632/VivianTunn_JCP_paper.pdf Viciunaite, V., & Alfnes, F. (2020). Informing sustainable business models with a consumer preference perspective. Journal of Cleaner Production , 242 , 118417. https://www.sciencedirect.com/science/article/pii/S0959652619332871 11 | P a g e

Budget Analysis Start-up Costing for Online platform for bloggers - 2023 START-UP COSTS Cost ($) EQUIPMENT/CAPITAL COSTS Cost ($) Registrations Business purchase price $0 Business name $150 Franchise fees $0 Licences $250 Start-up capital $1,00,000 Permits $100 Plant & equipment Domain names $120 Vehicles $11,600 Trade marks/designs/patents $120 Computer equipment $10,600 Vehicle registration Computer software $1,200 Membership fees Phones $600 Accountant fees $2,700 Fax machine $300 Solicitor fees $1,200 Security system $800 Rental lease cost (Rent advance/deposit) $31,200 Office equipment Utility connections & bonds (Electricity, gas, water) $12,000 Furniture $8,000 Phone connection $1,300 Shop fitout $1,900 Internet connection $1,600 Computer software $3,700 Training $11,000 Wages $1,80,000 Stock/raw materials $0 Insurance Building & contents $2,200 Vehicle $1,600 Public liability $0 Professional indemnity $0 Product liability $1,000 Workers compensation $3,000 Business assets $1,400 Business revenue $0 Printing $1,200 Stationery & office supplies $1,800 Marketing & advertising $2,100 Total start-up costs $2,59,740 Total equipment/capital costs $1,35,000 Assumptions: All figures are GST exclusive. 13 | P a g e