Business Idea Statement
Burjuman Consultancy Group is a start-up company based in Sheikh Khalifa Bin Zayed Street, Burjuman, United Arab Emirates. The company will specialize in marketing high-tech products in Burjuman and other cities within the UAE.
The services will include consultancy on different types of projects, market study and top-notch retainer consultancy. The company fits the needs of businesses dealing with the increasing agony of hiring staff and expanding operations. The company will offer attractive prices, both compared to the market and the cost of establishing an in-house system.
In addition, the company will offer very flexible and scalable services to the existing and prospective clients. Burjuman Consultancy Group will make the project-based consulting and market research the core of the company’s business and a source for referrals for other consultancy services.
Company’s mission
Burjuman Consultancy’s mission is to be the top brand and provider of consultancy services in Burjuman and the entire UAE. The company acts as an alternative to internal systems. The company’s operators provide a high level of practical experience and expertise. The services will be offered in a more professional and less risky manner. The company’s long-run vision is to be known for exceptional, high-quality services and to increase its presence across the region.
Company Ownership
Burjuman Consultancy Group will be created as a high-tech consultant company, based in Burjuman, United Arab Emirates. The company’s ownership is under the main investors/operators. The company has not been registered so far and is still pondering on whether to be registered as a public limited company or private company.
Start-up Précis
The total start-up expenses will amount to 18,000 AED. It will include legal fees, the cost of designing company’s emblem, office supplies,’ and other associated costs. The required start-up assets will cost 31,000 AED. More details are shown in the table below.
Services
Burjuman Consultancy Group will provide the expertise needed to expand channels of distribution and explore new opportunities. This can be described as consultancy on different types of projects, market study and top-notch retainer consultancy.
Retainer consultancy entails carrying out business development and market development operations on behalf of the client. This requires the company to fully understand the client’s condition, goals, and limitations.
It also involves confidential representation of clients in various meetings. On the other hand, project-based consulting entails developing and/or implementing specific plans using expertise to solve particular challenges and compiling important information on behalf of the client.
Lastly, market research involves conducting market studies on behalf of the client. The study may be on a particular market segment, distribution channels, or a specific subject. For example, the company may conduct a study on consumer behavior in a given market segment or impact of changing margins on the client’s products.
Environmental and Industrial Analysis
Generally, the consultancy services fit very well with the existing and new businesses. The industry is fairly stable since there are numerous individuals starting their own businesses and looking for assistance to manage their business and market development plans. The industry is also highly concentrated.
It has numerous medium-sized consulting companies and thousands of individual consultants. Given a large number of high-tech manufacturers and multimedia companies in the United Arab Emirates, consulting services are in high demand. However, most companies offering these services cannot match the experience and expertise of the Burjuman Consultancy (PKF 19).
The political state of affairs in the United Arab Emirates (UAE), particularly in Burjuman can be described as stable at the moment. The main focus of the current government is economic growth and attainment of the first world status.
Therefore, the UAE government provides the most conducive environment for doing business. The policies are very friendly, with limited bureaucracy. In addition, the global economic crisis that swept most countries had limited impact on the UAE’s economy. As a matter of fact, the UAE is one of the leading economies in the Gulf region (PKF 19).
However, the main hurdle the company could face is exporting its services in the region and the rest of the globe. Full integration of the Gulf economies has not yet been realized. The integration was aimed at enhancing the customs union and implementing common market.
This is partly attributed to the political rivalry among some Gulf States, for instance, Saudi Arabia and Qatar. As a result, doing business in the region is relatively very difficult. The low number of skilled personnel in the country has increased demand for consultancy services over the past few years.
Lack of enough qualified personnel in the labor market has made the development of in-house systems very difficult and expensive. As a result, a number of businesses have opted for other cost-cutting measures. These measures include outsourcing some services (Nonneman 35).
SWOT Analysis
SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is commonly used in business studies to explore the existing conditions in order to come up with possible solutions or strategies of addressing both internal and external challenges.
Strength and weaknesses explore factors within an organization, whereas opportunities and threats look at the external environment (Porter 54). In this case, SWOT analysis will be used to audit the target market.
The long-term experience of the operators in the consulting business and international market research gives the company a competitive edge in the industry. The principal’s eminence in the industry will facilitate marketing of the company’s services, despite the high prices charged.
In addition, the operators have been undergoing constant training to get updated with the current trends of consultancy in different types of projects, market studies, and top-notch retainer consultancy. As a result, the company is able to provide high quality and reliable services to its clients. The company’s major weakness is attributed to its low status and inadequate publicity.
The company still has a low contact network. Even though the company aims to explore the social media to increase network coverage, it is not sufficient to attain a high number of clients. It also focuses on high-tech markets and products alone, which limits its market. In addition, the fee charged is very high.
Lastly, most operations will be carried out by junior employees, although publicity will be done by the partners and senior operators.
The company’s opportunities depend on the advertisement of high-quality project-based consultancy, market research and top-notch retainer consultancy services on the social media and print press. The company can enhance its network contact and market its services online by simply creating a Facebook and Twitter profile.
This will create an additional value for the customers. The company can also increase its client base by offering competitive prices. Last but not least, the Burjuman Consultancy’s major threat is the high number of companies within the target market offering similar services.
As a result, competition is very stiff. Other threats include global economic recession and unhealthy competition from the well-established companies like PricewaterhouseCoopers (PwC). The large companies charging fairly uncompetitive prices are hurting small and medium-sized companies with low volume capacity.
Competitive Strategy
As already been mentioned, the company’s mission is to be a top brand and provider of consultancy services in Burjuman and the entire UAE. However, its strategic objective includes revenue maximization; establishment of a high-status retail presence in Abu Dhabi and its environs; expanding the market of its products through vigorous promotion and multi-channel marketing; and optimization of a company’s operations to reduce costs and satisfy customers.
Revenue maximization will be achieved through business expansion, which requires increased brand awareness and hiring qualified sales personnel. High-status presence will be achieved by locating the business at prime locations and through market segmentation.
The product promotion will entail the use of the mass media, internet marketing, trade fairs, strategic alliances, and contract marketing among others. Optimization of key operations will be achieved by streamlining the cost structure, consumer satisfaction and constant evaluation of the company’s operations.
Competition
The company will face different kinds of competition. The most important competition will come from the hi-tech companies that have established their own systems. These companies have workers who carry out the above-mentioned functions as part of their routine.
The advantage Burjuman Consultancy Group has over such businesses is that most of their workers are already overburdened with responsibilities. As a result, they cannot perform these functions effectively. Burjuman Consultancy Group can also approach the new partners and other stakeholders in a confidential manner.
In addition, they can collect information and make preliminary contacts in a manner that most of the corporate employees can’t. Competition will also come from high-level management consultancy firms, for instance, High Tech Security Solutions, Aon Consulting, Arthur D. Little, and McKinsey among others.
These are basically generalists who offer a wide range of services and do not focus on a particular market segment. In addition, some of them are frequently held back by the unsound organizational framework that doesn’t offer the most qualified and knowledgeable personnel for various tasks. Burjuman Consultancy Group will have a competitive advantage over these companies because its operators are experts in their own fields and will provide top-notch services.
The third competition is multinational corporations that specialize in market research, for instance, KPMG Consulting and Deloitte Consulting. These are very strong competitors. However, Burjuman Consultancy Group will match them by providing the required expertise and top-notch services to the clients. Last but not the least, competition will also come from smaller companies that are market-specific (UNCTAD 8)
Operation Plan
As mentioned above, the company will offer various services, which include consultancy on different types of projects, market study and top-notch retainer consultancy. Discretionary services will also be offered upon client’s request.
For this reason, the company will try to be as flexible as possible. In case a customer is not fully satisfied, remedial services will be provided. The services will be offered based on the schedule created, with priority given to project-based consulting and market research. The schedule will be adjusted from time to time depending on the magnitude of work available and many other factors.
The company will use all the available resources to increase its clientele and probably expand its area of operation. Since there are very many players in the industry, the company will seek a long-term partnership with its clients.
The business will be housed in the first floor of Burjuman Center, which is in the center of the UAE’s high tech industry. The office has adequate space to host a professional and well-organized operation and will be equipped with the required facilities. The facilities will include stationeries, computers, and other equipment. Communication within the company will be effected through face to face conversations and mobile phones.
On the other hand, communication with the clients will be through convenient means, for instance, phone calls, face to face interactions and e-mails. The key services will be rendered by the company’s principals. The company will also engage freelance experts for back-up in research and report development.
HR and Management Plan
The initial team will comprise of the principals themselves, with very little back-up from other freelance experts. In other words, the organizational structure will be very flat. As the company grows, extra help will be required, especially in sales and marketing.
Employees will be required to have a high level of experience and expertise in project-based consultancy, market research and other areas of service. The current personnel plan is still provisional. It will entail 3-5 principals, office manager, office assistant, editorial/graphic person, and a marketer.
Additional employees will be acquired as the company grows. The company expects to increase the number of employees from 14 in the first year to 20 in the third year. The majority will include sales people, editorial/graphic persons, and secretaries. The table in appendix 1 shows the company’s personnel plan.
Marketing Plan
The business idea and plan have been validated through a market research. The consultancy Industry in the UAE is growing rapidly and it is highly valued. The location of the company is very strategic. Burjuman Consultancy Group will target high-tech producers who want to sell their products in the local and international local. The clients will range from major multinational corporations to medium-sized companies.
The company’s most significant group of clients is managers of huge companies. They include sales executives, general managers and marketing executives. These managers are always in charge of specific market segments, channels of distribution and global spotlight. Their schedule is extremely tight. Hence, time and resource management are always on top of their priority. In addition, when exploring new opportunities, they must be very cautious not to put their company in massive risks (Kotler and Armstrong 10).
Burjuman Consultancy Group will set prices, which reflect savings when compared to the actual value of the service. The services will be priced at the upper edge to match the general positioning of the company as a high-quality service provider. In order to further the growth and development of the company’s brand, the activities of advertising, online marketing, discounting and publicity will be used to entice customers.
Promotional strategies will be used in defining and locating the target audience for the product and clearly passing the specific message. The promotional strategies will be employed in creating awareness of the presence of the brand in the UAE market (Payne 41).
Market Segmentation
The market will be divided into two: large manufacturing companies and medium-sized companies. Large manufacturing companies are the most significant market segment. They include large multinational corporations, for example, Samsung Gulf Electronics, Etisalat and Gulf Electronics Company.
Burjuman Consultancy will carry out development functions on behalf of these companies better than they would manage on their own. On the other hand, medium sized companies include multimedia and software firms. These companies are Emaar Properties, Jumeirah Group, and Wardi Telecom among others. Burjuman Consultancy will provide specialized development alternative to these companies to enable them to explore new opportunities (UNCTAD 15).
Financial Data
The following table shows the projected growth in sales in the next three years. The figures are in the United Emirates Dirham (AED).
The table in appendix 2 shows the annual estimates. Sales are expected to rise from 590,000 AED in the first year to about 1000,000 AED in the third year while direct costs of sale from 160,000 AED to 290,000 AED. On the other hand, the gross margins are expected to remain at around 70%. Last but not the least, net profit is expected to increase to approximately 7%.
Projected Cash Flow
Cash flow projection is very important in any start-up business. The yearly cash flow figures are shown in the table in Appendix 3. Cash receivables are projected to rise from 570000 AED to more than 1000,000 AED. On the other hand, expenditure is projected to rise from 560,000 AED to about 950,000 AED.
Projected Balance Sheet
The balance sheet in appendix 4 indicates that the company will have more assets than liabilities. In other words, Burjuman Consultancy Group will be in a strong financial position. The figures shown are annual estimates. The company’s assets are expected to rise from 145,000 AED to over 350,000 AED. On the other hand, the liabilities are projected to rise from 110,000 AED to 225000 AED. Last but not the least, capital is expected to increase from approximately 34,000 AED to over 90,000 AED.
Works Cited
Kotler, Philip and Gary Armstrong. Principles of Marketing, New Jersey: Upper Saddle River, 2008. Print.
Nonneman, Gerd. EU-GCC Relations: Dynamics, Patterns & Prespectives, Dubai, UAE: Gulf Research Center, 2006. Print.
Payne, McDonald. Marketing Plans for service businesses, Burlington, MA: Oxford, 2006. Print.
PKF. Doing Business in United Arab Emirates: Business and Tax Profile, Burjuman, UAE: PKF, Inc., 2012. Print.
Porter, Michael. Competitive strategy: Techniques for analyzing industries and competitors, New York: Free Press, 1980. Print.
UNCTAD. Management Consulting: A Survey of the Industry and Its Largest Firms, United Nations conferences on Trade and Development, New York: UNCTAD, 1993. Print.