This is a solution of Business Plan for SME Enterprise Assignment part 4 in which we discuss ,This market research will lead to many stipulations which were confirmed before the business establishment.
Virtually, all companies need some sort of telemarketing irrespective of their scale of integration. Usually, a company can determine the customer awareness or satisfaction by surveying. Sometimes, a conference can be used as an effective mode of communication about an upcoming event.There are various companies which are willing to know if it is feasible to use telemarketing for the purpose of generating sales. Contact centres also serve a purpose in the form of first level services for help desk. All technical problems can be resolved by non-technical customer care executives who follow a technical or computer system to solve issues of end users. They do it by referring to a scripted set of processes of procedures for resolving most frequently happening problems. By this technique, SME Enterprise can save huge amount of money and decrease chances of hiring more people as per the rough the clock requirement.
SME Enterprise has planned to get into two segments of the market. Initially, they will join their hands with medical services industry. Medical industries need such call centres for maintaining regular contacts with their patients. At the same time, this call centre will be operational as a first level assistance panel for its clients.
Mr. A and Ms. B have already managed to sign contracts with two major medical companies in Dubai. All customer care executives are in the process of obtaining online as well as offline training from these two companies for matching their requirements. SME Enterprise has also decided to take small projects like surveying and mystery shopping from small scale companies. After establishing a harmonious working environment with these initial companies, SME Enterprise will leverage their profitability and reputation into new contracts and contacts with other local companies. The utmost goal of importance will be to serve the entire city of Dubai and then, UAE for becoming a company with a highly dominant share in the market.A market analysis graph and table shown below represents the number of related business running in the city of Dubai. This can be represented as the preliminary geographical focus for the initial four to five years of the organization. There are further chances for expansion in the entire region of UAE where SME Enterprise will look for other business plans including potential customers.
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Clients Growth CAGR
High-tech firms 5% 500 525 551 579 608 5%
Medical firms 5% 500 525 551 579 608 5%
Others 5% 2,500 2625 2756 2894 3039 5%
Total 5% 3,500 3,675 3,859 4,052 4,254 5%
As it can be seen from the chart and graph mentioned above, the majority of customers are in high-tech companies and medical companies. At the same time, there is more number of potential customers for year 1 in other categories. For year 1, there are 500 expected customers in high-tech companies and medical firms. On the other hand, there are 2,500 clients for other companies. There is a projected 5% growth pattern for all these companies which will increase the number of potential customers by the said margin over the coming five years. At the end of five years, there will be average growth of 5% with total number of customers increasing from 3, 500 to 4, 254. Also, there is average CAGR (Compound Annual Growth Rate) of 5%.
Service Business Analysis
When it comes to understand the telemarketing industry, there is a need to know the fact that various companies have a specific yearly growth from 6.5% to 8% (CMO Council, 2014). It is happening due to the fact that most of the businesses are becoming slowly aware of the requirement for the market information. It is supplementary with a need to decrease turnover rates for clients in a rashly hit economy. However, SME Enterprise has fewer expectations in terms of continuing growth rate which is represented by the long-term skills assessment for growth rates in the market sector. It can be further explained by the stipulation that the annual growth rate for the telemarketing industry is not as grand as any telemarketing industry can expect. However, as this field is under development and there is a high possibility for high-end gains after 5 years, the company should think about the contact centre in a positive manner.SME Enterprise believes that they have a greater threat in the shape of new market entrants. All these entrants have a potential for high growth opportunity in the industry. Here, most likely rivals are already existing advertisement agencies which are willing for horizontal integration by entering new sub-markets. All these agencies have slight disadvantage in terms of switching costs while developing a new partner. All these companies will be occupied in contraction of various telemarketing agencies while facing switch costs. Moreover, SME Enterprise believe in the fact that there is a considerable learning curve in the industry. It represents a declining unit cost trend as a company gains more accumulative experience in the market sector itself.
There is a possibility to generate long-term customers too. Ultimately, there are considerably higher initial costs related to the creation a call centre.
There is a highly intensive rivalry amongst various call centre agencies. On a contrary, overall telemarketing industry is quite matured with a long-enduring but moderate growth pattern. Most of the large scale industries are quite dependent upon each-other when they engage themselves in market share and jockey for position. They are quite generic and diverse in their approach which has smoothened their way in this cutthroat industry.There is another threat of various clients opting for backward integration for executing their factor of in-house advertisement. It is one of the major factors used by procurers for indirectly controlling prices in the industry while increasing the competition amongst different organizations. Therefore, this conditions should be kept in minds of the top management officials of SME Enterprise while setting prices and providing services.
Buying Patterns and Competition
Buying needs and patterns,Most of the companies get into a contractual agreement with contact centres on the basis of their professionalism, reputation and effective past campaigns. It is difficult to get that reputation and professionalism from new organizations. However, it can be ratified by such a professional approach followed by employees of SME Enterprise. The overall scope and price are other significant reasons to accept contracts if the company is small scale integration.
Here, the competition comprises of all potential telemarketing agencies and call centres running across the nation. Additionally, SME Enterprise faces indirect competition from firms which manage in-house telemarketing services. They do not go for availing outsourcing services. Practically, they have extensive completion from other call centre companies like IBM, TCS, Oracle, etc. All these call centres are a part of multi-national firms like ABC International and can pose great threat due to extensive diversity.When it comes to understand the call centre industry; there is a need to know that contact centres are highly fragmented. There are a huge number of small scale integration companies that majorly cater to small scale companies and some large scale companies. These large scale companies seek largest contracts from big companies like GM, CBI, ADIC, Sprint, etc. it can lead to intense market competition in the industry. By using a concentrated strategy of providing services to niche markets; SME Enterprise tend to avoid such deliberating environments. They also tend to avoid drawbacks like price wars and tender fill ups.
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