Fitness Express Web Based Entity

Published Date: 02 Nov 2017

All fitness needs fulfilled at the click of a button. This document is a projected proposal for establishing a Web Based Organisation within the fitness/sporting goods industry and the feasibility of establishing such an organisation. Research and analysis concerning the feasibility of starting project will be undertaken by the group using such data collection methods as surveys, questionnaires, interviews and using a range of different sampling techniques to implement them. The project will be well scheduled to ensure objectives are being met on time, clarify roles of team members and to achieve the final goal of the deliverables.

The proposed name for this potential business is "Fitness Express" and will be solely based on delivering desired fitness and sporting gear to our customers as quickly and efficiently as possible within the Australia and New Zealand region. In order to achieve the main aim of the business, Fitness Express will be aiming to purchase cheap stock from overseas suppliers, possibly China and pushing them down the supply chain to a Sydney based Distribution Centre. On arrival to Sydney Distribution Centre, Fitness Express’ main goal is to deliver stock without breaching lead times or damaging goods. The best way to fulfil the distribution and demand is through contracting third party logistics. Our metropolitan and regional deliveries will be handled by a transport company such as Linfox, Toll or a smaller company such as Alvaro Transport depending on the most inexpensive solution. For interstate and international deliveries (New Zealand) a combination of rail and ships will be used in order to reduce costs. Through outsourcing our organisations logistics, the organisation will be in fact reducing cost. This is due to the "industry know how" the third party organisation have to offer. Examples of costs that will be saved are costs such as purchasing of transport vehicles (trucks etc.), hiring of drivers, training of staff and maintenance costs of transport.

The organisation will be concerned with selling two major lines. The first line will be fitness equipment; this will include home gym units, treadmills, spin cycles, cross trainers, rowing machines, boxing equipment, free standing weights, benches etc. The other line the organisation will be focusing on is fitness clothing and accessories. Some examples of this line include, sweat shirts, training shorts, skins, sporting footwear, back support belts, gloves, hand wraps, heart rate monitors, supplements, sports bags and much more.

With the recent growth of online shopping, consumers today want to use their time as efficiently as possible (Eroglu et al. 1999). Web based organisations have been growing rapidly and achieving great success due to the demand. The industry as a whole allows customers to receive customised products to their homes and businesses at the click of a button at a price that is relatively cheaper than our competitors.. There are many companies today which have established themselves within the fitness industry that buy and sell gym equipment. Sporting goods giants Rebel Sport and Workout World are amongst our largest competitors, due to their well established brand names, it is a lot easier for customers to be exposed to their new online stores. In terms of operations similarity our other main competitors include Calibre Fitness, Exercise Australia, FitBiz and Technogym. These smaller organisations are already established organisations within the industry and it is important for Fitness Express to establish core competencies in order to enter and remain in the market.

The main objective of this project is to achieve feasibility, in order to achieve feasible objectives the organisation must justify all costs such as inventory, warehousing, wages, distribution, advertisement/marketing and website start up/maintenance costs. The main potential outcomes of Fitness Express are delivering our products to our customers as quickly and efficiently as possible. In order for this outcome to be possible the organisation must reach an agreement and obtain at least four operations related contracts. Firstly, Fitness Express needs to establish relationships with reliable and cost effective suppliers in China. Then, once the base inventory is organised transport contracts with truck, rail and shipping based companies will be essential in aiding the efficient delivery system that is projected.

Project Background

96% of Australian businesses are Small-Medium Enterprises (SME’s), (Longenecker et al. 2008). Fitness Express will be classed as an SME. SME’s tend to start up with a flat management style in order to build processes and growth through closer communications rather than having senior management. Having a flatter organisational structure at Fitness Express will allow the business to prepare for change in the organisation if any issues arise during start up and growth periods. Less levels of management to inform, so information flow is improved and lower level employees are empowered. This is where the organisation will draw its strength, due to its simple design of its organisational structure making it very flexible and require minimal costs to maintain (Robbins & Barnwell 2006). The organisation will be structured as follows:

CEO

Operations Manager Web Developer/Maintenance (IT) Accounting (Outsourced)

Receptionist Floor Supervisor

Store person 1 Store person 2

The project scope is important as it determines what are all the elements in the project that have to come together to ensure you achieve outcomes/deliverables of the project that were intend (Larson & Gray 2011). Scope of the project concerned researching and analysing the feasibility of establishing an organisation (Fitness Express) which its operations include managing a supply chain from an overseas seller/s and the distribution of the inventory to its customers located both domestic and international markets (New Zealand), which buy from the organisations web based online store. The limitations of the project are not obtaining suppliers and contracts with logistics companies to outsource our distribution, insufficient capital to fund operations, level of demand for products and our particular business not being high enough, and finally target market not being large enough to sustain organisation long term. To counter act the risk of our suppliers possibly being unreliable Fitness Express will try to obtain at least two main suppliers.

Fitness Express will incur a wide range of start up costs. Due to its diverse nature and many departments of operations and marketing. There are many costs to be considered prior to the opening of the organisation. These include:

Warehousing Costs (Located: Wetherill Park, Size: 614 Mz) $89,868 pa

Web Design (jezwed.com) $1,500

Computers and Office Needs $10,000

Forklift $8,500

Pallet Racks $1800

Automatic Pallet Jacks $900

Workers Uniforms $300

Total $111,068

These costs a solely the essential starting costs. Other initial costs after the business is established include inventory, transport contracts, supplier contracts, outsourcing of the Accounting Department and other vital operating costs. The potential owners of Fitness Express do not possess enough capital to start the business outright, so in order to produce cash flow, Fitness Express will obtain a bank loan. After some brief research the loan with the best attributes is the ANZ Structured Business Finance loan (ANZ Bank Australia) which specialises in unique cash flow requirements and interest rate risk, with the option of overdrafts to aid the company with flexibility of meeting deadline payments. All start up costs are predicted to be payed off within three years of opening.

Methodology and Discussion

It is important for any start up business to do some research before deciding to enter a market, to identify key elements which will help ensure its success and sustainability. These include identifying target market, demand and consumer preferences. This approach won’t be any different for Fitness Express. To identify these important elements for the organisation, Fitness Express will engage in data collection methods such as surveys, questionnaires and face to face interviews with potential customers. To implement these data collection tools, sampling methods of random selection will be used. For this particular organisation we believe random selection would be the most effective way of identifying the information needed such as customer preferences, since random selection gives everyone in the population an equal chance to be selected, giving Fitness Express a wider variety of data from a wider range of potential customers (Sapsford & Jupp 1996).

The surveys and questionnaires will be structured using the ‘funnel’ technique, which means they will start with more general questions that are easy for the respondent to answer (eHow 2011). These questions make the respondent enthusiastic and get them more involved in the survey. Towards the middle of the survey will have the more difficult questions those which may take time to think about it. Finally it will end with easier questions again to make the survey more interesting for respondent. Also the survey must be short and to the point because most long surveys are not completed, and boring question make the respondent uninterested.

The survey must be short and its wording must not be too difficult to understand so that all respondents are able to understand every word of it, also it must be less than 15 question and no more than 5 minutes to complete. The type of questions will be multiple choice to make it easy for respondent to answer and for the researcher to collect the information.

Risk Management

Risk management is a key factor in initialising a major project (Larson & Grey 2010) such as establishing a new business. Every single existing organisation is open to risk within its operations. Fitness Express might face risk such areas such as operations, demand a financial market risks.

In relation to operational risk. It is extremely important for fitness express to possess and utilise all the hardware aspects of getting the product from the supplier to the final customer without breeching lead times or reducing the quality of the product. A failure in the smooth operations within the supply chain would eventually result in declined customer satisfaction. In order to avoid such inconveniences, the company has invested in the top of the range equipment and most importantly installed back-up power systems to deal with the random power outages in the region in order to consistently optimise supply chain communication.

Like with any other start-up organization, Fitness Express has to establish strategies for managing fluctuations in demand. One of the measures that will be taken is to reinvest sufficient cash flow from profits made in the high peak season so the company is able to remain afloat during slower periods.

In addition, financial market risk is also a vital strategy in maintaining cash flow. Businesses, particularly those dealing with consumer products, are subject to constant financial market fluctuations (Rogerson et al 2008). Fitness Express definitely has to contend with increases in taxation rates, a rise in interest rates on acquired loans and oscillating exchange rates for products that have to be imported from other countries. In order to maintain the international market and currency fitness express must constantly review the business plan and analyse the financial records in order to ensure that such fluctuations are appropriately managed.

Schedule of work intended

Date

Task

WEEK 4

PROJECT PROPASAL DUE

WEEK 5

Assign roles to group members

Begin structuring survey/questionaries

Transport contract research

Attend scheduled meeting with lecturer

WEEK 6

Review first draft of surveys and questionaries

Research demand and tendencies of web based market

Hold group meeting for review on each role

Attend scheduled meeting with lecturer

WEEK 7

Divide survey and questionnaire responsibilities among group

Conduct surveys and questionnaires

Analyse Literature Review

Gather Resources and Information (Contracts, Operations)

Establish Logo and Mission Statement

Attend scheduled meeting with lecturer

WEEK 8

Analysis of feedback from surveys and questionnaires

Divide Business Report sections

Find relevant industry and literature references

Group Meeting

Attend scheduled meeting with lecturer

WEEK 9

Continue with respective sections of report

WEEK 10

Collection of group members writing

Group meets to discuss and analyse work done so far

Compose other parts of methodology

Begin constructing first report draft

Attend scheduled meeting with lecturer

WEEK 11

Final draft of report

Translate information into PowerPoint

Begin construction of presentation

Assign presentation roles

Attend scheduled meeting with lecturer

WEEK 12

Prepare for presentation

Hand in report