entrepreneurship by kedari kiran

8/3/2019 Entrepreneurship by Kedari Kiran

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Company Name :

Diamond GeezerGroup Assignment : Companyanalysis applying Realisable SalesPotential TM MethodologyModule Leader:Nigel CulkinGroup Member: Kedari Kiran Pampana-10280768

4/15/2011


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ContentsExecutive Summary................................................................................................................................................................2

Pitch........................................................................................................................................................................................3

Assumptions.....................................................................................................................................................................5

Intuition................................................................................................................................................................................10

Current Reality.....................................................................................................................................................................14

Competitive Intensity (Driving Profitability)...................................................................................................................16

Competitive Position (X-Axis).........................................................................................................................................16Scenario................................................................................................................................................................................18

Market Attractiveness (Y Axis)...............................................................................................................................................18

Competitive Position (X-Axis)................................................................................................................................................20

Worksheet (extract)..........................................................................................22

References............................................................................................................................................................................25

APPENDIX.............................................................................................................................................................................27

PESTLE ANALYSIS..................................................................................................................................................................27

PESTLE ANALYSIS..................................................................................................................................................................28

PESTLE ANALYSIS..................................................................................................................................................................29COMPETITIVE INTENSITY ANALYSIS.......................................................................................................................................30

COMPETITIVE INTENSITY ANALYSIS.......................................................................................................................................31

COMPETITIVE INTENSITY ANALYSIS.......................................................................................................................................32

COMPETITIVE INTENSITY ANALYSIS

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Executive Summary

This case study is about diamond rings in a company called Diamond Geezer.com. The Managing Director of this Company is Mr. Clive.

The company offers a variety range of diamond rings through online. Diamond Geezer is one of the largest online jewellery retailer in UK

and enjoys a strong market position due to the companys value positioning and continued focus on gaining consumer confidence. The

Company has a strong brand identity in the web.

The pitch by Clive Billing was very spirited. He wants investment for his online jewellery retail business and asked for 255,000 for 15%

equity. He was well informed of his business and competition and also was well prepared. We would like to invest in his business because:

1. The Entrepreneur has relevant experience for 40 years. He seems to have managed his business well and is also ambitious

2. The Research shows Online Jewellery segment is growing at a good rate.

3. All the research shows retail sales, in general, are moving to online sales.

4. The risk of debt can be mitigated with the other assets the Entrepreneur is willing to include as the companys assets.

As an online venture, Diamond Geezer is in the right direction and sustained investment can in the right areas should also mitigate risks ofother players in the market

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PitchCase Study: Diamond Geezer (Gemnet Solutions Ltd)

Notes from Pitch

P1: CEO Clive Billing wants to secure 255,000(GBP) for fifteen per cent stake in his business called Gemnet solutions

limited.

P2: 40 years experience in diamond business, founder, creator, developer of www.diamondgeezer.com. 20 years

experience on the Internet.

P3: Are going to be one of the leading online UK jewelers.

P4: Goal is to flourish in Click and Buy (Online Sales) as it is a new market for them.

P5: Target market is 50 times greater than what they are dealing with at present.

P6: Statistics show that an Internet shopper spends over 100 (GBP) on a click and buy purchase due to it being an

impulse buy.

P7: Average person buys 52 items of jewellery in their lifetime.

P8: Wants to introduce products ranging from 25 - 500 (GBP).

P9: Turnover of 1.6 million (GBP) and gross profit of 3243 (GBP).

P10: Wants to develop existing up market online jewellery business into new areas to attract mass-market impulse sales.

P11: Running the business from commercial premises owned by Clive and is happy to include in the company Gemnet

Solutions Ltd.

P12: Too early to enter the online market, this resulted in 1 million (GBP) loss.

P13: Typical product is Diamond engagement ring: 2500 (GBP).

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http://www.diamondgeezer.com/http://www.diamondgeezer.com/


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P14: All original companies still the same that were established in 1992.

P15: Bluenile.com is the biggest reseller of diamonds on the web with turnover of $330 million (USD).

P16: Diamond geezer name catches publics imagination with 10,000 index pages on Google and 300,000 references to it.

The brand is remembered by masses.

P17: Appears on page 2 at position 12 when typed search term Diamond. Appears on page 1 at position no. 9 when typed

search term Diamond Engagement Ring.

P18: 3.5 million (GBP) turnover is forecasted for April 2008 April 2009 with the gross profit of 458,000 (GBP).

147,000 (GBP) on the balance sheet and 152,000 overdraft and guaranteed loan. Freehold property is worth 456,000

(GBP) with a debt of 92,000 (GBP) plus a quarter of a million pounds worth of stock. 100,000 (GBP) invested last year,

which can be written off by Clive.

Investment:

P19: James Caan: 1. 255,000 for 40% equity or 127500 for 20% equity and happy to share remaining half with

any other dragon.

P20: Theo Paphitis: 127500 for 20% equity and happy to share with James.

P21: Peter Jones: Happy to join James and Theo for the same equity (127500 for 20%)

P22: All Three Dragons i.e. James, Theo, Peter for 255,000 GBP for 40% Equity

P23: Dragon by Dragon Analysis:

Deborah Meaden: Out: Not interested to invest, as this is not the business she is interested in, had been contacted

previously which was against the rules and had already declined to invest.

Duncan Bannatyne: Out: Not satisfied with the gross profit of3243 for online sales, annoyed at not receiving clear

answers.

Theo Paphitis: In: Interested to invest because of Clives experience and skills.

Peter Jones: In: Interested in their online website as his portfolio can bring value to online development.

James Caan: In: Business has substantial debts, which will eat in to the profits left to the investors. Impressed with

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Clives financial details. Mitigated risks to investor by containing the property in the business along with a quarter of

million worth of stock.

Assumptions

A1: Strong Financials Gemnet Solutions ltd. Quarter of a million GBP pounds worth of stock.

A2: Forecast: 08 09 3.5 million (GBP), Gross profit prediction 458,000 (GBP).

A3: Bank Balance: 147,000 (GBP) & 152,000 (GBP) Overdraft and guaranteed loans.

A4: Property: Freehold worth 456,000 (GBP) with debt of 92000 (GBP).

A5: Property contained in the business.

A6: Own Investment of 100,000 (GBP) can be considered written off.

A7: Market Growth: High. As competitor overall sales on web is $330 Million (USD).

A8: Clivescharacteristics: Strong background and experienced person on the web for almost 2 decades.

A9: Quarter million stock of diamonds may be not original diamonds.

A10: Costly: Product and it is not compulsory people should buy diamond rings for weddings and engagements.

A11: Clive could have borrowed more money from his friends and relatives for investment on the business

A12: Being diamond a costly item people are not used to buy online and they may visit the outlet and get one if a personal

service is not of high standard.

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A13: Google ranks changes every minute so there might not be consistency in their ranking order.

A14: New online seller and competitor are always a threat.

A15: Range of products

A16: Price and quality might not remain same

A17: Not able to physically see the designs can prevent buyers from making a purchase.

A18: Business only UK not global i.e. Europe

A19: Return on investment cannot be guaranteed due to large investments and low returns in the past.

A20: Lack of product information Clive may cheat.

A21: In practise most start-ups (if successful) can claim up to 5% of the market.

A22: So the overall market size need to be=66,64,000/5%= 133.3m.

A23: 30% market can be captured if company becomes successful.

A24: Market size would then be= 66,64,000/30%= 22.2m

A25: Diamond is an essential and valuable product for a human in his/her life.

A26: Online store will have less overhead costs as compared to having a retail shop. Retail shop would require security

surveillance, cameras, rent etc. Running the online store from commercial premises cuts the running costs by high

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margin.

A27: Consumers have broken the barrier of insecurity about purchasing online and people generally purchase the items

online on a regular basis.

A28: Social Networking is gaining pace at a higher rate

A29: Cyber laws are being improved upon continuously, this can improve consumer trust in online shopping

A30: New and easy to use handheld devices and mobile devices will encourage users to go online mode

A31: Diamonds being expensive the brand value and customer trust on the retailer is very important A32: Unique design can attract new customers

Secondary Research

CR1: The Outlook of Diamond market is good.

CR2: Shortage of diamond is expected in next 10 years as a result of global production.

CR3: Global diamond production is dominated by Africa, which constituted 61% by carats.

CR4: The world diamond jewellery is estimated to be growing at an annual rate of approximately 5.3% per annum over

the forecast period.

CR5: The demand for diamonds is generally measured in relation to the manufacturing capacity and the demand for

jewellery going forward.

CR6: Diamond prices are notoriously difficult to predict due to the whims of fashion and jewellery trends.

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CR7: Whether diamonds are forever, or just a girls best friend , there is no doubt that the economic power generated by

their allure to the female of the species.

CR8: Measured by value, some 80-90% of the worlds production of diamonds is used for jewellery.

CR9: Judging by the interim results, there is no question of diamonds losing their sparkle.

CR10: As per the research and online information the main competitor in diamond industry (Online Sales) is Blue Nile,

Union Diamond, and James Allen.

CR11: Diamond Geezers diamonds are costly compared to the competitors price in the market.

CR12: In 2010, 30.1 million adults in UK (60%) have accessed internet.

CR13: UK online shopping is to grow by 40% by 2020.

CR14: In UK, there are 13 million broadband subscribers.

CR15: The wedding market has significant impact on the diamond industry through the traditional weddings and engagement

rings as well as bridal jewellery and associated gift purchases, which also contribute to the market.

CR16: Global recession has affected luxury market and has caused problems since the consumers have become more

price conscious about buying diamond jewellery.

CR17: Financial times reported that luxury purchases and jewellery business were able to deal with the economic climate

more successfully than any other online retailer.

CR18: Retail sales of fashion jewellery rose by 4.9% in 2010 with the subsector estimated to be worth 425 million

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(GBP), this represents an overall increase of 16.4% since 2006.

CR19: UK bridal market is estimated to be worth more than 5.5 billion (GBP) per year according to the wedding

industry blog, with the average wedding costing around 20,000 (GBP).

CR20: Legal aspects of luxury retail business in the UK include sales of goods, consumer credit, supply of goods and

services, fair-trading, consumer protection.

CR21: An assay office mark is a mark of quality given by an assay office where precious metals and jewels are assessed

for the purity.

CR22: De Beer diamond jewelers' ltd is a competitor who has turnover of 57854 (GBP). 40% of the worlds diamonds

production is one by them. It has strong brand identity.

CR23: Another competitor is Blue Nile Jewellery ltd who has turnover of 937563 (GBP) and have established dominant

position in the market due to value positioning. It has international presence in the market.

CR24: Online sales is set to increase in the coming 5 years

CR25: New software packages enable non technical users to start online business

CR26: Conflict/Blood Diamonds are now a sensitive issue and can impact Diamond retail

CR27: Internet Marketing is important for foreign online firm

CR28: Being a Luxury segment traditional media advertising is also important to gain brand value

Segmentation / Market Area

What: Diamond Engagement Rings

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Who: Marriage and engagement occasions no age limit. Male or Females

Where: United Kingdom

Intuition

Market Attractiveness (Y-Axis)

Market Size: High

1. Average person buys 52 items of jewellery in their lifetime. (P7)

2. Market is aimed at people whether male or female interested in engagement rings and weddings rings. (P13) (A12)

3. Turnover of 1.6 million (GBP). Target market is 50 times greater than what they are dealing with at present. (P9) (P5)

4. Assuming the company becomes big =30% of the market (A23)

5. Market size would then be= 66,64,000/30%= 22.2m. (A24)

6. In practise most start-ups(if successful) can claim up to 5% of the market (A21)

7. So the overall market size need to be=66,64,000/5%= 133.3m . (A22)

Market Growth: High

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1. As Competitor overall sales on web is 330 million dollars. (A7)

2. Are going to be one of the leading online UK jewellers. (P3)

3. New online seller and competitor are always a threat. (A14)

Market Profitability: High

1. Goal is to flourish in Click and Buy (Online Sales) as it is a new market for them. (P4)

2. Forecast: 08 09 3.5 million (GBP), Gross profit prediction 458,000 (GBP). (A2)

3. Costly: Product and it is not compulsory people should buy diamond rings for weddings and engagements. (A10)

4. Turnover of 1.6 million (GBP) and gross profit of 3243 (GBP). (P9)

PESTLE (Driving Demand)

Political: n/a

Economic

1.Recession changes the customer behavior. He wants to introduce product range from 25 - 500. Typical product is Diamond

engagement ring: 2500 (GBP).

2.Statistics show that an Internet shopper spends over 100 (GBP) on a click and buy purchase due to it being an impulse buy.

(P6) (P8) (P13)

Social:

1. An average person buys 52 items in their lifetime. (P7)

2. Statistics shows an internet shopper spends over 100 GBP on click and buys purchase. (P6)

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Technological:

1. World has now become an Internet and online sales is growing in a faster pace (A 26)

Legal:

1. All original companies still operating with the same company names and entities since 1992. (P14)

Environment: n/a

Competitive Intensity (Driving Profitability)

Supplier Pressures: n/a

Customer Pressure: n/a

Competitor Rivalry: As competitor (Blue Nile) overall sales on web is $330 million (USD) (P14) (A7)

Threat of Substitution: n/a

Entry/Exit Barriers: n/a

Competitive Position: X Axis

Offering Position:

1. Typical product is Diamond engagement ring: 2500 (GBP). (P13)

2. Wants to introduce products ranging from 25 - 500 (GBP). (P8)

Operating Position:

1. Range of products (P8) (A15)

2. Price and Quality, Engagement Rings (A16) (P13)

3. Design of the rings to impress visitors on the website to buy. (A17)

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RISK (Z Axis)

1. Company Financials

Gross Profit: 3243 (GBP). (P9)

Personal Investment of 100,000 (GBP). Can be considered to wipe off. (A6)

Property: Freehold worth 456,000 (GBP) with debt of 92000 (GBP). (A4)

Investment deal on offer= 2,55,000 @ 15% equity

Compound Interest =40%

Exit = 3 years

Return: First year: (40% * 2,55,000)=1,02,000+2,55,000= 3,57,000

Second Year: 3,57,000+ (40% * 3,57,000) = 4,99,800

Third year: 4,99,800 + (40% * 4,99,800)=6,99,720

Net Return=6,99,720

Net return= Gross Returns Capital Gains Tax

Gross Return = 6,99,720/70%=9,99,600

Therefore to get 9,99,600 at the end of year 3, the company should be worth 66,64,000.

Targets

April 08 09 3.5 million (GBP), profit 458,000 (GBP) (A2)

147,000 (GBP) & 152,000 (GBP) overdraft guaranteed loan (A3)

2. Entrepreneurs Characteristics

The entrepreneur has 40 years of experience in the diamond business.(P2)

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Dragon was contacted previously broke rule. (P23)

20 years in the internet. He is an early adopter and it is the same company which he has established earlier which shows he is

very capable. Also he is so experienced in the field because he has been so long in the business and he has learnt from his

business. He knew his business well and he had researched thoroughly before entering the den. He knew his competitor and he

had a clear vision. When the dragons offered him the money, he after taking a minute or so he was clear on what he wanted and

how he wanted it. The company was also financed properly. He had fixed assets which could pay off his loan anytime. His

business model too was very smart. (P2)(P10)(P11)(P14)(P15)

3. Deal Dynamics:

255,000 for 15% equity is risky due to very low gross profit. (P1) (P9)

Cannot be sure about the return on investment due to large investments and low profit in the past. (A19)

40% of equity and property contained in the business mitigates any risk on investment. (A4)

Overall risk is High cause of huge amount of investment.

Conclusion: We are investing because the market size is huge and any risks are being mitigated.

Current Reality

Market Attractiveness (Y Axis)

Market Size: High

1. In 2010, 30.1 million adults in UK (60%) have accessed internet (CR12)2. UK online shopping is to grow by 40% by 2020 (CR13)

3. In UK there are 13 million broadband subscribers (CR14)

4. Diamond is an essential and valuable product for a human in his/her life. (A25)

5. UK bridal market is estimated to be worth more than 5.5 billion (GBP) per year according to the wedding industry blog, with the

average wedding costing around 20,000 (GBP). (CR19)

Market Growth: High1. The main competitors in diamond industry (Online Sales) are Blue Nile, Union Diamond and James Allen. (CR10)

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2. As competitors overall sales on web is 330 million dollars (A7)

3. Retail sales of fashion jewellery rose by 4.9% in 2010 with the subsector estimated to be worth 425 million (GBP), this represents

an overall increase of 16.4% since 2006. (CR18)

Market Profitability: The profitability is medium because Diamond Geezer is developing its network in the current market however itis evident that they are increasing their market position hence when searching in Google they appear in number 2

PESTLE (Driving Demand) Political : n/a

Economical :1. Running an online store from commercial premises cuts the overhead costs when compared to running a shop in the high street. It

makes perfect business sense to operate the business online due to recession as this will save costs. (A26)

2. As he is going to introduce product range from 25 (GBP) to 500 (GBP). (P8)

3.Whether diamonds are forever, or just a girls best friend, there is no doubt that the economic power generated by their allure to the

female of the species. (CR7)

Social: An average person buys 52 items in their life time. (P7)

1. Statistics shows a internet shopper spends over 100 (GBP) on click and buy purchase. (P6)

2. Being diamond a costly item people are not used to buy online and they may visit the outlet and get one if a personal service is notof high standard. (A12)

Technological: The company is not very active in social media however is positioned at no.1 on Google when using search term

diamond engagement ring and has to make their presence felt in the social media. ( A28)

Legal: Legal aspects of luxury retail business in the UK include sales of goods, consumer credit, supply of goods and services, fair-

trading, consumer protection. (CR20)

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Environmental: Global recession has affected luxury market and has caused problems since the consumers have become more price

conscious about buying diamond jewellery. (CR16)


Supplier Pressure: the current major suppliers of diamond jewellery are Bluenile and De Beer. Producing the items in one areawill aid in reducing the costs of delivery. (CR22, CR23)

Customer Pressure:Not able to physically see the designs can prevent buyers from making a purchase. Brand awareness is vital

especially when dealing with professional customers, who require high quality and specific designs in products. (A17) (CR23)

Threats of Substitutes: NA

Entry / Exit Barriers: NA

Competition Rivalry: As competitor (Blue Nile) overall sales in web is 330 Million Dollars (A7)

Measured by value, some 80-90% of the worlds production of diamonds is used for jewellery. (CR8)

Competitive Position (X-Axis)

Offering position (why would someone buy?)

Brand value and trust. (A31)

Popularity of designs.(A32)

Price. (A16, CR6. CR11)

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MSF Weight Diamond Geezer Blue Nile DeBeers

Brand value 50 3 6 6

Popular designs 25 3 4 4

Price 25 5 4 4

Total 100 4.7 4.7 4.7

Operating position (what have to be good at?)

Diamonds sourced from non-conflict regions(CR26)

Web Presence. Higher search engine rankings(A13)

Internet Marketing(CR27, A13)

Traditional Advertising(CR28)


Diamond Source 25 6 6 6

Search Engine Rankings 35 8 4 6

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Internet Marketing 25 6 7 6

Traditional Advertising 15 3 5 7

Total 100 5.8 5.5 6.3

SWOT

Strengths: Technologically advanced web site.(P17)

Weaknesses: Brand value is not on par with the big players.(CR22,CR23)

Opportunities: Internet is the cheapest and fastest means to improve brand value and attract customer loyalty. Here, Diamond

Geezer seems to have the upper hand(P17)

Threats: The big players also can invest in their online activities and surpass Diamond Geezer in online popularity. (A14)

Conclusion: We are investing because diamond geezer is networking in the current market is developing the network in the

current and increasing the market position

Scenario

Market Attractiveness (Y Axis)

Market size Large:

1. Number of online buyers will increase from 157 million to 205 million from 2010 to 2015. (CR13)

2. However, poised to grow. The growth rate is forecast to slow down a bit but the volume of the market will keep increasing till 2015.

(CR4, CR18)

Market growth Large:19


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1. According to Forrester Research (2011):

Online retailing is a growing market and online retail sales will continue to grow at a high rate as per Forrester Research.(CR23)

2. Forrester predicts that online sales will increase from $172 billion in 2005 to $329 billion in 2010 from in the USA alone .(CR23)

Market profitability- Small to Medium:

Latest technologies have made the entry barrier low for new players. There is going to be more competition. Profit margins can be

strained. (CR25)

PESTLE (Driving Demand):

Political: Stricter regulations and security laws will encourage shoppers to trust internet shopping over personal Computers as well as

mobile/handled devices (A27, A29)

Economical:

1.Recent recession in the economy has made a dent to all business sales .(CR16)

2.Increase in VAT will also impact customer spending, Increase in taxes, inflation and the general freeze in pay structures all

increase pressures on online as well as offline sales(CR16)

Social:

1. Hand held devices and smart phones make internet and internet shopping even more easily and accessible encouraging more

consumers to shop online(A30).

2. Awareness of Conflict Diamonds and the United Nations stand on it can direct customers away from diamonds(CR26)

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Technological:

Improved internet speeds are being achieved with latest progresses in technology. BT, for example, is rolling out very high speed

broadband to the whole of UK. these high speeds are going to attract more customer attention and satisfaction (CR14)

Environmental: n/a


Threat of substitution

Conflict diamonds and more awareness may make customers to choose other gems over diamonds .(CR26)

Entry/exit barriers:

Entry Barrier is low. New software packages make it easier to set up an online business. But, the jewellery sector is unique and stillhas a higher entry barrier because the security and insurance required to handle expensive items .(CR25)

Competitive Position (X-Axis)

Offering position (why would someone buy?)

Brand value and trust. (A31)

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Popularity of designs.(A32)

Price. (A16, CR6. CR11)


Brand value 50 3 6 6

Popular designs 25 3 4 4

Price 25 5 4 4

Total 100 4.7 4.7 4.7

Operating position (what have to be good at?)

Diamonds sourced from non-conflict regions(CR26)

Web Presence. Higher search engine rankings(A13)

Internet Marketing(CR27, A13)

Traditional Advertising(CR28)


Diamond Source 25 6 6 6

Search Engine Rankings 35 8 4 6

Internet Marketing 25 6 7 6

Traditional Advertising 15 3 5 7

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Total 100 5.8 5.5 6.3

As discussed, new players can always come in especially since this is a growing business with healthy growth rates predicted for the future.

This is a risk. But, even though new players can come in easily, it will be difficult for them to gain the web presence that Diamond Geezer

has acquired by intelligent investment in technology. Sustained investment in technology will enable them to stay ahead of other players and

should mitigate the associated risks.

Worksheet (extract)

MarketAttractiveness

Intuition Current Reality Scenario

Growth potential 7 7 6

Market size 8 7 7Profitability 4 4 5

Average 6.3 6 6

Market SuccessFactors


Range of Products 3 6 5Design 3 4 3

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Bran Value 3 4 5Price 2 4 6Average 2.75 4.5 4.75

Risk (High, Med,Low)


Risk of not hittingtargets

M M H

Would you invest in this company?

Yes because XYZ axis are over 4 except Y axis in Intuition which is less than 3.

A proposition into the investment of 125,000 with 30% stake in the company has been agreed. The decision to invest in the company was

agreed after evaluating and establishing potential risks. While examining the potential risks major consideration was put on whether the risks

could be substantially reduced, which could later aid us in capitalizing on the companys future income. To help mitigate many of the risks

the owners personal assets valued very high, thus to input fur investments, if needed while developing the network in the diamond industry.

Due, to the owner currently using parts of personal property, costs on rent and to some extend maintenances are also lessened, thus allowing

the owner to increase savings and profit for the future, allowing to invest in the increase of the company. The major risk with this company

and how they can be overcome are stated as follows:

Luxury Items: Due to the product being catered to the wealthy market or for occasional buy, thus making the product a luxury item. This is

a major risk because the vast market would be unable to afford in the product. However, not many products need to be sold to ensure a

medium turnover to equalize any money spent. If the product is marketed at the right target audience, and the network base is increased, a

growth in the profit will be visual.

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Constant Increase of Diamond Values: Despite the current profit levels being low, the investment prospects are high, due to the product

prices in diamonds on the increase. This increase in diamond value with the added incentives of unique design ideas will help in the

salability of the product. The diamond jewellery industry is constantly increasing, if the price of each product sold is made and designed at

minimal cost, thus allowing the company to sell the products at competitive prices.

Conclusion: Although the risks to invest in the company are high, the returns in profit with the global economy are on the increase, which

will also benefit us the investors and the company. By bringing our knowledge and rectifying the risks to increase profits will ensure the

companys increase in the diamond market and network. The company has potential to grow in the future, and surpass its competitors.

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References

Statistics [Online] Available at http://www.statistics.gov.uk/cci/nugget.asp?id=8 [Accessed on : 24th March, 2011]

Finance Markets [Online] Available at http://www.financemarkets.co.uk2007/02/16/report-uk-online-shopping-to-grow-by-40-percent-by-2020/ [Accessed on: 25th March, 2011]

Un Org [Online] Available at http://www.un.org/peace/africa/Diamond.html [Accessed on: 4th April, 2011][

Mashable [Online] Available at http://mashable.com/2011/02/28/forrester-e-commerce/ [Accessed on : 7th April, 2011]

Fame [Online] Available at https://fame.bvdep.com/version-2011222/cgi/template.dll?product=1&user=ipaddress [Accessed on 13th April,2011]

Fame [Online] Available at https://fame.bvdep.com/version-2011222/cgi/template.dll [Accessed on 13th April, 2011]

Key Note (2011) Jewellery & Watches Market Report Business Source Complete [Online] Available at http://www.keynote.co.uk/market-intelligence/view/product/2424/jewellery-%26-watches?medium=download [Accessed: 12th April, 2011]

Business Source Complete (September, 2010) Blue Nile [Online] Available at http://web.ebscohost.com/bsi/detail?sid=86b19282-a0ab-492c-9a5b-be34da4077cb%40sessionmgr114&vid=1&hid=104&bdata=JnNpdGU9YnNpLWxpdmU%3d#db=bth&AN=54598061[Accessed on 12th April, 2011]

Business Source Complete (July, 2010) De Beers [Online] Available at http://web.ebscohost.com/bsi/detail?sid=86b19282-a0ab-492c-9a5b-be34da4077cb%40sessionmgr114&vid=1&hid=104&bdata=JnNpdGU9YnNpLWxpdmU%3d#db=bth&AN=54598061[Accessed on 13thApril, 2011]

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http://www.statistics.gov.uk/cci/nugget.asp?id=8http://www.financemarkets.co.uk2007/02/16/report-uk-online-shopping-to-grow-by-40-percent-by-2020/http://www.financemarkets.co.uk2007/02/16/report-uk-online-shopping-to-grow-by-40-percent-by-2020/http://www.un.org/peace/africa/Diamond.htmlhttp://mashable.com/2011/02/28/forrester-e-commerce/https://fame.bvdep.com/version-2011222/cgi/template.dll?product=1&user=ipaddresshttps://fame.bvdep.com/version-2011222/cgi/template.dllhttp://www.keynote.co.uk/market-intelligence/view/product/2424/jewellery-&-watches?medium=downloadhttp://www.keynote.co.uk/market-intelligence/view/product/2424/jewellery-&-watches?medium=downloadhttp://www.statistics.gov.uk/cci/nugget.asp?id=8http://www.financemarkets.co.uk2007/02/16/report-uk-online-shopping-to-grow-by-40-percent-by-2020/http://www.financemarkets.co.uk2007/02/16/report-uk-online-shopping-to-grow-by-40-percent-by-2020/http://www.un.org/peace/africa/Diamond.htmlhttp://mashable.com/2011/02/28/forrester-e-commerce/https://fame.bvdep.com/version-2011222/cgi/template.dll?product=1&user=ipaddresshttps://fame.bvdep.com/version-2011222/cgi/template.dllhttp://www.keynote.co.uk/market-intelligence/view/product/2424/jewellery-&-watches?medium=downloadhttp://www.keynote.co.uk/market-intelligence/view/product/2424/jewellery-&-watches?medium=download


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BT plc (2009) Super-fast broadband Programme update [Online] Availableathttp://www.btplc.com/Sharesandperformance/Quarterlyresults/Financialpresentations/Superfastbroadbandprogrammeupdate.pdf[Accessed: 12 Apr, 2011]

BT plc (Feb, 2011) BT pushes the boundaries of super-fast broadband [Online] Availableathttp://www.btplc.com/Sharesandperformance/Annualreportandreview/Shareholdermagazine/Issues/February2011/broadbandfeb2011/index.htm[Accessed: 12 Apr, 2011]

Forrester Research (Feb, 2011 cited in Indvik, Lauren. 2011) US Online Retail Forecast, 2010 To 2015 [Online] Availableat http://mashable.com/2011/02/28/forrester-e-commerce/ [Accessed: 13 Apr, 2011]owley, Emma (Jan, 2011) Inflation set for new high as pay slumps Telegraph [Online] Availableat http://www.telegraph.co.uk/finance/jobs/8247910/Inflation-set-for-new-high-as-pay-slumps.html [Accessed: 13 Apr, 2011]

United Nations (2001) Conflict Diamonds [Online] Available athttp://www.un.org/peace/africa/Diamond.html [Accessed: 13 Apr, 2011]

27
http://www.btplc.com/Sharesandperformance/Quarterlyresults/Financialpresentations/Superfastbroadbandprogrammeupdate.pdfhttp://www.btplc.com/Sharesandperformance/Annualreportandreview/Shareholdermagazine/Issues/February2011/broadbandfeb2011/index.htmhttp://www.btplc.com/Sharesandperformance/Annualreportandreview/Shareholdermagazine/Issues/February2011/broadbandfeb2011/index.htmhttp://mashable.com/2011/02/28/forrester-e-commerce/http://www.telegraph.co.uk/finance/jobs/8247910/Inflation-set-for-new-high-as-pay-slumps.htmlhttp://www.un.org/peace/africa/Diamond.htmlhttp://www.btplc.com/Sharesandperformance/Quarterlyresults/Financialpresentations/Superfastbroadbandprogrammeupdate.pdfhttp://www.btplc.com/Sharesandperformance/Annualreportandreview/Shareholdermagazine/Issues/February2011/broadbandfeb2011/index.htmhttp://www.btplc.com/Sharesandperformance/Annualreportandreview/Shareholdermagazine/Issues/February2011/broadbandfeb2011/index.htmhttp://mashable.com/2011/02/28/forrester-e-commerce/http://www.telegraph.co.uk/finance/jobs/8247910/Inflation-set-for-new-high-as-pay-slumps.htmlhttp://www.un.org/peace/africa/Diamond.html


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APPENDIX

Case: Diamond GeezerNames: Ahzen kazmi, kiran,Amrutha,Adarvan SampathScenario

PESTLE ANALYSIS

28

Stricter regulations and security

laws will encourage shoppers to

trust internet shopping over

personal Computers as well as

mobile/handled devices

Recession

Increase in tax and VAT will

encourage online sales

Hand held devices and smart

phones make internet and

internet shopping even more

easily.

Awareness of Conflict

Diamonds

Improved internet speed

Political Economic

Social Technolo ical

N/A

N/A

Le al

Environmental


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Case: Diamond GeezerNames: Ahzen kazmi, kiran,Amrutha,Adarvan SampathIntuition

PESTLE ANALYSIS

29

N/A Recessions affects the buying

behavior so has productsranging from 25 to 500

An average person buys 52

items in their lifetime.

Statistics shows an internet

shopper spends over 100 GBP

on click and buys purchase.

Internet era

Political Economic

Social Technolo ical

N/A

N/A

Le al

Environmental


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Case: Diamond geezerNames: Ahzen kazmi, Amrutha,Kiran,Adarvan SampathCurrent Reality

PESTLE ANALYSIS

30

N/A Recession

Increase in tax and VAT will

encourage online sales

An average person buys 52items in their life time.

Statistics shows an internetshopper spends over 100(GBP) on click and buypurchase

Visit outlet for a personalservice because diamond being

a costly item

Increase in internet speed andimproving technology.

Political Economic

Social Technological

Stricter rules and regulations

Legal laws on Import andExport

N/A

Le al

Environmental


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Case: Diamond geezerNames: Ahsen Kazmi, Amrutha , Adarvan Sampath,kIranScenario


31

N/A

The jewellery sector is unique and still has

a higher entry barrier because the security

and insurance required to handle expensiveitems.

Su lier Pressures Customer Pressures

Entr /Exit Barriers


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Case: Diamond GeezerNames: Ahsen Kazmi, Amrutha,Kiran,Adarvan SampathIntuition

32

Competitor RivalryN/AN/A

Conflict diamonds and more awareness

may make customers to choose other gems

over diamonds.

Threat of Substitution


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Case: Diamond geezerNames: Ahmen Kazmi, Amrutha, kiran, Adarvan SampathCurrent Reality

33

Competitor RivalryAs competitor (Blue Nile) overall sales on web is$330 million (USD)N/A N/A

N/A People may go for other kinds of stones


Entr /Exit Barriers Threat of Substitution


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34

Competitor RivalryN/A N/A

The jewellery sector is unique and still has

a higher entry barrier because the security

and insurance required to handle expensive

items.

Conflict diamonds and more awareness

may make customers to choose other gemsover diamonds


Entr /Exit Barriers Threat of Substitution


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Definition&Segmentation

A) Market Attractiveness

Rateeachof thefollowingcriteria1-9toassesstheattractivenessof themarket inwhichthecompanyoperates

Score 1 9

B) CompetitivePosition

Chooseuptofour market successfactorsbasedonthecompany's a) offeringand b) operatingpositionandratethecompany1-9against each

Score 1 9

C) Risk

Ratethefollowingriskfactors1-9

Score 1 9

D) Shouldyouinvest?

Pleaseplot theaverages, Circlesizerepresentsrisk

C) Risk

Will revenuescover costsanddeliver attractive pro

A)MarketAttra

3

4

4

Yes/No: Yes

Strong

Favourable

Entrepreneur'sCharacteristics

Average


What wouldbethe value of theinvestment in

thr rtim?

Doestheindividual and/or teamhavethe

n r kill ?

Howmuch: 125,000

What %equity: 30%

3.7

Deal Dynamics

Wouldyouliketoinvest inthiscompany?

Unfavourable

Weak

Strong

Weak Strong

4.75

5Rangeof products

Average

CompanyFinancials

Weak

Isthemarket growing ?

(i) Howeasyisit for thisproduct/ideatobe copied(ii) Istherean alternative tothisproduct/idea?

a) Offeringposition: whywouldpeoplethinkthis

serviceor product better thanthecompetitors'?

Low High

GrowthPotential

Weak Strong

3

1) BrandValue

Strong

6

Profitability

7

2) popularityof designs

Strong3) Price 6

5

Weak

5

Average

b) Operatingposition: isthecompany lower cost

thn m titr inmkin n livrin thWeak

Case:DiamondGeezer Scenario

6

Large

Younowhaveaset amount of timetoworkthroughsectionsAtoDandevaluateyour investment decision. Remember your teamhasatotal of

100,000toinvest but theremaybemorepitchestocome...

Low High

Small

Definition&Segmentation Diamondengagement rings

Isthemarket big enough?Market Size

Who areitscustomers? Marriageandengagement occasions

Where doesit sell? UK

Names:AhmenKazmi,Amrutha,Kiran,AdarvanSampath

TeamNumber:

0

3

6

9

3 6 90

Low Medium High

35


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Rateeachof thefollowingcriteria1-9to assess theattractivenessof themarket inwhichthecompanyoperates

Score 1 9

B) Competitive Position

Chooseuptofour market successfactors basedonthecompany's a) offeringand b) operatingpositionandratethecompany1-9against each

Score 1 9

C) RiskRatethefollowingrisk factors 1-9

Score 1 9

D) Shouldyouinvest?

Pleaseplot theaverages, Circlesizerepresents risk

C) Risk

Since it isan impulsepurchasetheimportanceof the

ringoutweighs itscosts.Weak

Case: Diamond Geezer Intuition

7

Large

Younowhave aset amount of time toworkthroughsectionsAto Dandevaluate your investment decision. Remember your teamhasa total of 100,000to

invest but there maybe more pitchestocome...

Low High

Small

What doesthecompanydo? DiamondEngagement rings

Market Sizeis big.Market Size

Who areits customers? Marriageandengagement occasions

Where doesit Online, UK

Names:Kaz,Sam,Kiran,Amey

Intuition

6.3

Profitability

8

2) Design

Strong3) Brandvalue 3

3

Weak

4

Average

4) Price

Average

Company Financials

Weak

Themarket is growingbecause the USCompetitor is earningmuchmorethanDi

Ideas areeasytocopybut toget theexpertisei s hardto get.

Convenience of purchase, guarenttedqualityandowners

expertise

Low High

GrowthPotential

Weak Strong

3

1) Rangeof products

Strong

Strong

Weak Strong

2.75

2


Entrepreneur has skill s andexpertisehowever theunclear

formof answers raises questions about clive's character

Howmuch: 255,000

What %equity: 30%

4.6

Deal Dynamics

Wouldyoulike toinvest inthiscompany?

Unfavourable

Weak

Gross Profit is not highhowever involvement of propertyandstockmitigates anyri

A

)MarketAttractive

5

4

5

Yes/No: Yes

Strong

Favourable


Average

0

3

6

9

3 6 90

Low Medium High

36


37/38



Rateeachof thefollowingcriteria1-9toassesstheattractivenessof themarket inwhichthecompanyoperates

Score 1 9


Chooseuptofour market successfactorsbasedonthecompany's a) offeringand b) operatingpositionandratethecompany1-9against each

Score 1 9

C) Risk

Ratethefollowingriskfactors1-9

Score 1 9

D) Shouldyouinvest?

Pleaseplot theaverages, Circlesizerepresentsrisk

C) Risk

Will revenuescovercostsanddeliverattractive profits ?

A)MarketAttrac

6

7

4

Yes/No: Yes

Strong

Favourable


Average

B)CompetitivePosition

What wouldbethe value of theinvestment inthreeyears

time?

Doestheindividual and/orteamhavethenecessary

skills ?

Howmuch:150,000

What %equity:25%

5.6

Deal Dynamics

Wouldyouliketoinvest inthiscompany?

Unfavourable

Weak

Strong

Weak Strong

4.5

44) Price

Average

CompanyFinancials

Weak

Isthemarket growing ?

(i)Howeasyisit for thisproduct/ideatobe copied ?

(ii) Istherean alternative tothisproduct/idea?

a) Offeringposition:whywouldpeoplethinkthisserviceor

product better thanthecompetitors'?

Low High

GrowthPotential

Weak Strong

4

1) Rangeof Products

Strong

6

Profitability

7

2) Designsonoffer

Strong3) Expertise&PersonalIsedExperience 4

6

Weak

4

Average

b) Operatingposition: isthecompany lowercost than

competitorsinmakinganddeliveringtheproduct or

Weak

Case: DiamondGeezer Current Reality

7

Large

Younowhaveaset amount of timetoworkthroughsectionsAtoDandevaluateyour investment decision. Remember yourteamhasatotal of 100,000to

invest but theremaybemorepitchestocome...

Low High

Small

What doesthecompanydo? Diamondengagement rings

Isthemarket big enough?Market Size

Who areitscustomers? Marriageandengagement occasions

Where doesit sell? Online, UK

Names:

0

3

6

9

36 90

Low Medium High

37


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38

entrepreneurship by kedari kiran

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