Writing a Business Plan: A Template (Part 3)

In this article we will continue discussing one last subsection you can include in your “Market and Competitors” section.

The first three subsections are: Market Analysis, Demand Analysis, and Competition Analysis. The last subsection we will discuss is Environmental Analysis.

4. Environmental Analysis

This subsection tackles the environmental factors that can affect the behaviour of the market and consequently, also influence the consumers and even your competition.

Cite the variables that you think will be crucial and how it will affect your business decisions as well as your competitor’s.

The environmental factors that can come into play are:

Cultural
Economic
Social
Legal
Technical
Political
Demographic
Religious

When writing this subsection, take into consideration the unemployment rate, average, income, technological advancements and interest rate changes, especially those in your field.

You should always keep abreast with current events so you will not be caught flat-footed when a big issue or crisis comes up.

Marketing and Sales

By this time, you have already talked about the market you want to penetrate, your prospective competitors as well as the factors that can affect your business. The next step would be to discuss strategies on how you will start your initial forays into the market.

Based on most business plans, the most identified principal strategies would be:

Enter the market
Penetrate new markets
Increase the share in the marketplace
Solidify the position in the market

Each business would have different strategic objectives depending on the vision and tactics of the business owner. But to give you an idea, here are some common strategic objectives:

Penetrate a new market
Positioning of the product/service in the market
Launch new products
Increase sales

Having identified your objectives it is now time to look at the marketing strategies you will use to achieve your objectives. The four essentials of marketing that you will use are: Product, Price, Promotion, Distribution.

Product. You can make three product decisions in this subcategory: create a new product, make modifications/change a current product or remove a product from the market.

These product decisions must be made by taking into consideration the perceived gaps in the market, in other markets and the failures of the competition.

Price. Some of the pricing objectives most often seen in business plans are:

Get profit on sales
Get profit on the invested capital
Get a share of the market

Now there are usually three pricing strategies that are used in all businesses. These are:

Price the product low to penetrate the market
Match the price of the competition
Increase the price of the product/service

The pricing strategies above are applicable on these situations:

Across all products
A different pricing strategy one each line of products
Each product will be independently priced
Pricing strategy will be on a regional/geographical basis

(To be continued)

Business Issues
Business Plan
Countries
Finance
Marketing
Start up
Strategies
Taxation
Technology


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