Company History
Businesses operate in various sectors to make a profit. It is critical to understand the history of business to analyze its prospect. Furthermore, businesses exist for various reasons, including offering necessary services for profit-making or benefiting the community. Therefore, entrepreneurs should understand and even document their firm’s history and the achievement made over the years (Philip, Kevin, Fabio, & Costabile, 2017). Jem Computer Shop started in 2014, indicating that the firm has been operating for the past five years. According to the owner, the business started as a hobby out of his passion for computers and fixing computer parts. With time, he established a business that he hoped to continue expanding. During the initial days of operations, the entrepreneur worked part-time in banks, telecom companies, as well as computer shops before working full time and having the shop as a side business. He has also gained business skills, having worked in his father’s shop, which has operated for more than 30 years, as a part-time employee. Although the business was an automobile repair parts, it taught him important lessons about how to run, manage, and strategize his own business.
Detail of the Markets, Products, and Customers
Businesses meet the needs of a particular market segment because it is not possible to serve an entire market. Therefore, in marketing, entrepreneurs should identify particular customer needs that they can effectively address (Kotler, Keller, Ancarani, & Costabile, 2014). They should study the market effectively to collect information to apply when segmenting the industry. Furthermore, market segmentation involves various demographic factors such as age, gender, income, and geography among other aspects (Miquel-Romero, Caplliure-Giner, & Adame-Sánchez, 2014). Jem Computer Shop operates within the computer hardware and consumer electronics retail market. The business targets males aged 16-30 years and local businesses. The firm identifies with the target market because mostly, males are the most likely to run both computer and electronics businesses and are always fascinated by technology. Therefore, the business operates within the market to meet their needs.
SWOT ANALYSIS
Market Trends (Opportunities and Threats)
The SWOT analysis provides critical information for entrepreneurs to make decisions about how to operate within a particular market. Entrepreneurs should understand their external environment to strategize and continue operating productively. Opportunities and threats are the two forces within the external environment that affect business operations (Kotler, Keller, Ancarani, & Costabile, 2014). According to the entrepreneur, his main opportunity is to expand into different markets with similar supplies. Hence, development in technology, increase in technological skills and interest, and emerging markets are the three trends that offer opportunities. The three actions according to the opportunities include innovating the business to include other product offerings, such as software, deploying more talented employees and training the current ones to serve the techno-savvy clientele, and expanding to new markets within the country such as the software market.
Besides, the competition due to the emergent of new rivals in the market, inadequate international suppliers, and rapid technological changes are the major trends that represent a threat to the business. One of the actions to mitigate the threat of competition is to create innovative products and improve customer services by training employees (Kotler, Keller, Ancarani, & Costabile, 2014). The action will allow the business to attract more customers and retain the current ones to have a competitive edge. The second action to mitigate the inadequacy of international suppliers is to capitalize on the current local suppliers who have high quality parts and services. The third action to address rapid changes in technology is to study the market and ensure constant updates on the firm’s products.
Strengths and Weaknesses
Besides the external environment, it is critical to understand the internal forces that affect the success of a business. Strengths and weaknesses are the internal factors that affect the productivity of any business (Kotler, Keller, Ancarani, & Costabile, 2014). The business enjoys a strong brand name since it is famous among the customers. However, the business has weaknesses that the entrepreneur should understand and address to prevent negative effects. The company experiences a high level of competition and a significant rivalry. The business operates from a prime location, but it is characterized by small storage. On the other hand, the firm competes with H Power Computing, which is a big brand that operates within a huge space. The competing firm is one of the leading software businesses in Hawaii. The business also competes with Computer Geeks Hawaii, which is a renowned brand name in the hardware market.
Positioning Strategy
Positioning is critical in business because it determines the success of a business in the market. Positioning is the act of designing the firm’s image to have a characteristic place in the mind of the target customer (Philip, Kevin, Fabio, & Costabile, 2017). It is a value proposition because the business should communicate an advantage to customers and give a rationale of why customers should buy a product
Points-of-difference (PODs) is one of the positioning strategies used in business. The strategy suggests the attributes or benefits that a company offers to customers, which make them associate with the business (Kotler, Keller, Ancarani, & Costabile, 2014). They use the attributes to evaluate the brand that they do not find in products offered by competitors. Jem Computer Shop offers trust to its customers. The entrepreneurs and his employees build trust with the customers by providing the right products while offering value for money. For instance, the business builds trust with customers by training employees to create positive relations with clients. Unlike other retail shops in the same business, the firm invests in training and developing employees to develop necessary skills, especially whenever changes in the market are available. On the contrary, competitors such as H Power Computing and Computer Geeks believe in hiring skilled IT professionals. As a result, they fail to invest considerably in training and developing employees. Consequently, they rate lower in the ability to create trust with customers because employees lack adequate customer service skills.
Unlike competitors, Jem Computer Shop believes in customer service. Competitors focus on attracting technical skills to provide excellent hardware and other electronic devices. On the contrary, Jem Computer Shop focuses on developing customer service skills. The entrepreneur believes that clients are attracted by much more than quality. Therefore, the business attracts and retains employees with excellent customer service capability (Philip, Kevin, Fabio, & Costabile, 2017). During the interview, the entrepreneur confirmed that he uses his employees to create working relationships with customers to support its word of mouth marketing strategy. Hence, a satisfied customer will market the product through word of mouth to actual and potential customers.
Points-of-parity (POPs) is a positioning strategy in which the company provides attributes that are not necessarily exceptional but could be shared with other companies. However, the characteristics offer value to customers (Armstrong, Adam, Denize, & Kotler, 2014). For example, the business capitalizes on excellent customer service to attract and retain customers. The same attribute is common among competitors, but the business uses it to avoid losing customers to rivals. One of the points of parity used by the business is providing installation services to clients. For example, when a consumer buys computer hardware from the company, the employees provide installation services. Another aspect on the point of parity by the customer is the use of highly skilled employees to support customer service (Miquel-Romero, Caplliure-Giner, & Adame-Sánchez, 2014). The firm uses a similar model as competitors to train and develop employees to provide excellent services. The last point of parity is the use of reliable suppliers to obtain quality products. The firm provides quality products to customers because they use reliable suppliers. The entrepreneur indicates that he has remained in business for the last five years because of the ability to provide products that attract and retain customers.
Target Market
Targeting is a critical strategy for businesses because it determines the particular needs that it meets. A business cannot effectively serve an entire market because of limited resources. Therefore, entrepreneurs should segment the market to meet the needs of a particular sector effectively. Consequently, it can effectively focus its resources on limited needs (Armstrong, Adam, Denize, & Kotler, 2014). The target market for Jem Computer Shop is the users of computer hardware and consumer electronics. However, the entrepreneur focuses on a target market that provides the highest number of clients based on needs. The firm markets its products to males aged 16-30 years and local businesses.
One of the segmentation strategies used by the business is gender. Although female customers use retail products, they do not provide a higher rate of returns on investment. Male customers are easily fascinated by electronics and computers. Therefore, they are most likely to purchase new devices that are entering the market.
Another factor used by the company to segment the market is age. Furthermore, men have the highest purchasing power for the products during the middle age. The majority of young men have started working and opening up their businesses. Therefore, they provide a huge market for the firm. The company also uses the level of income as a segmentation strategy. Thus, it targets high and middle-income customers because of their purchasing power.
Based on the nature of its segmentation, the entrepreneur revealed that the majority of his customers are males, engineers, architect, and multi-media students looking to adjust their PC’s. Those customers are reliable users of computer hardware and electronic devices for personal, educational, and professional purposes.
Customer relation is one of the most important elements of success in any business. Therefore, Jem Computer Shop’s employees focus on creating positive relations with their customers by providing excellent customer service. Employees are trained to focus on the needs of the customers to provide them with excellent services (Baker, 2014). For example, they are highly responsive to their needs, which is evident in the way they respond to queries and process orders.
Besides, the entrepreneur believes that the most effective way of getting quality is having a strong relationship with suppliers (Foxall, 2014). The firm has built relations with PC shops, Samsung Kuwait, and other suppliers to access quality materials and other supplies and build an effective business.
Promotional Strategy
Businesses should have an effective strategy to reach customers with a message about their products and services. Promotional strategies are used in informing, persuading, and influencing consumer decisions. Such approaches are mainly used in developing primary and selective demand. Primary demand is about the desire of the consumers for general products. On the other hand, selective demand is the desire for particular or selective products. The objective of the activities is to create demand among customers by informing them about their products or unique attributes. The business enhances customer value depending on the effectiveness of the promotional strategy. Therefore, businesses should carefully consider the promotional strategy that will have the greatest impact on consumers.
The entrepreneur agreed that promotion is an important aspect of the business because he can connect with his customers. He used the word of mouth strategy to communicate with his real and potential customers. He provides effective services where the customers are satisfied, keep coming back, and spread the word about products and services. The strategy is simply an organic means of spreading a message that uses components of viral marketing. The approach applies natural channels to send messages about a product or service. One of the benefits of this promotion strategy is that it is a free form of advertisement. The entrepreneur uses his customers to promote and market the products. However, the business should maintain excellent quality of products and customer service to be effective in using the channel (Serrat, 2017). The entrepreneur has effectively used the channel because of the ability to build trust with customers. Therefore, over the years, he had served the same customers and those who hear about their services from current and previous clients.
Although the strategy has remained effective over the years in promoting and marketing the firm’s products and services, other options could help in achieving better results. One of the strategies that can be used effectively includes social media marketing, which is an effective channel of communicating with customers. The media is useful for businesses of all sizes to communicate with real and potential customers. Given that the target customers are within the age limit of social media users, the business can integrate the channel into its promotional campaigns. The entrepreneur can speak directly to his customers through various social media apps such as Facebook, Instagram, Twitter, and Pinterest among other platforms. The firm should take advantage of such platforms for viral marketing just as the word of mouth strategy. Effective marketing through social media can have incredible results for the business, creating a lasting devotion to the brand and establishing leads to more sales.
Strategic Analysis Conclusions
Conclusions
Jem Computer Shop has effectively operated computer hardware and electronics retail shop. The entrepreneur has been in the business for the past five years in a shop that he started as a hobby. He has managed to create a successful business and hopes to expand it into a real business empire. The entrepreneur has the goal of serving the customer, providing them with a trustworthy experience, and making a profit out of business. He also hopes to revolutionize the IT and electronics market in Kuwait. Besides the owner, the business has three full time and one part-time employee. The entrepreneur is effective in segmenting the market to serve the needs of a particular group of clients. The business targets male customers, 16-30 years, and local businesses. Majority of its customers include males, engineers, architects, and multi-media students looking to adjust their PCs. The entrepreneur understands his competition to counter the major rivalry in the hardware and electronics retail market. It has positioned itself efficiently in the market to rival the competition.
Recommendations
Regardless of the efficiency in targeting the market and positioning the business to beat the competition, various areas that the entrepreneur can improve to become more productive and profitable are evident. Targeting males aged between 16 and 30 years is effective for the company because they have a considerably high purchasing power and are fascinated by technology. Therefore, to ensure that the business increases its reach to attract more customers within the age bracket, it should use other communication channels (Serrat, 2017). Social media use has become famous among youth and young adults. Therefore, the business should integrate the marketing strategy into its marketing activities.
The entrepreneur understands his competitors. However, he failed to indicate the measures he intends to take to counter the competition. The business could increase its product offering by including hardware maintenance. Therefore, the firm will not only sell hardware but also improve a service aspect to serve additional customer needs. The company will counter competition from other similar businesses that only focus on selling hardware and electronics. By providing maintenance services, the business will improve its point of difference strategy, while increasing trust among clients in the quality of its products and services (Serrat, 2017). It will also improve customer relations by ensuring that its employees are well-trained to meet the additional needs.
The entrepreneur should use the BCG matrix or Growth-share matrix to determine the new markets or the segments to venture into. The matrix is a corporate training tool that reveals the strengths of the company’s portfolio or SBUs on a quadrant. Growth-share matrix utilizes relative market share and industry growth rate when determining the growth capacity of the company (Kotler, Armstrong, Swee-Hoon, Siew-Meng, & Chin-Tiong, 2017). The business is a “cash cow,” which means that it is the most profitable and provides fast cash inflow. The entrepreneur should expand into the IT market and continue enjoying more profit. The entrepreneur should perform extensive market research before venturing into a new market. Such information is critical to avoid potential errors in the expansion strategy.
As the business expands, the entrepreneur will need to expand his store to accommodate the additional services. Besides, the owner plans to expand the business into a computer gaming lounge and open a restaurant. By expanding into new sectors, the entrepreneur will invest in a larger space. Furthermore, the strategy will address the problem caused by entering a homogenized market with high competition. Another strategy to overcome competition is to improve customer service by training employees and possibly hiring new talents (Kotler, Armstrong, Swee-Hoon, Siew-Meng, & Chin-Tiong, 2017). The IT market keeps on changing, and it is imperative for the business to keep track of the changes and adapt accordingly, including training employees whenever the market experiences a major transformation.
References
Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Sydney: Pearson Australia.
Baker, M. J. (2014). Marketing strategy and management. Macmillan: Macmillan International Higher Education.
Foxall, G. (2014). Strategic Marketing Management (RLE Marketing). New York: Routledge.
Kotler, P., Armstrong, G., Swee-Hoon, A., Siew-Meng, L., & Chin-Tiong, T. (2017). Principles of Marketing, an Asian Perspective. London: Pearson Higher Ed.
Kotler, P., Keller, K. L., Ancarani, F., & Costabile, M. (2014). Marketing management 14/e. London: Pearson.
Miquel-Romero, M. J., Caplliure-Giner, E. M., & Adame-Sánchez, C. (2014). Relationship marketing management: Its importance in private label extension. Journal of Business Research, 67(5), 667-672.
Philip, K., Kevin, K., Fabio, A., & Costabile, M. (2017). Marketing management (pp. 1-1031). London: Pearson.
Serrat, O. (2017). The future of social marketing. In Knowledge solutions (pp. 119-128). Springer, Singapore.