PESTEL Barbados

Topics: Caribbean, Variable cost, Barbados Pages: 37 (8315 words) Published: May 25, 2014
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PROPOSAL
E X PA N S I O N
BARBADOS
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David Straka & Daniel Viglaš

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Table of Contents

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Executive Summary!

3!

PESTEL Analysis of Barbados!

4!

Porter’s Five Forces!

11!

IFAS!

13!

EFAS!

14!

TOWS!

16!

SFAS!

17!

Application!

18!

Entrance Strategy!

19!

Logistics & Distribution!

20!

4P Fundamental Research!

21!

Product!

25!

Price !

26!

Place!

26!

Promotion!

27!

Financial Plan!

30!

Conclusion!

36!

Recommendation!

36!

Sources!

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Straka & Viglaš

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Executive Summary

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As a member of Commonwealth Barbados is economically tied to United Kingdom. Not just it is one of the most progressive countries in the Caribbean; furthermore culturally in the sphere of uncertainty avoidance or masculinity. The firm on one hand has to be careful with motivating employees, because its the most problematic factor for doing business there, but on the other hand they can rely, because corruption is there low.

The current situation is very feasible; when considering Porter's five forces the uniqueness of the product and its quality is preventive to the threats of new entrants or substitutes of the product. In addition, it is wise to use competitive advantage of consistent, tasty and high quality product. Logistics might be a problem, it is crucial to be reliable and deliver goods on time whenever it is needed. We recommend to hire an expert, who already worked with frozen products and has needed equipment to provide the service. High tourist turnover is the best opportunity for entering the market and for spreading the product across the island. Among all 699 restaurants on the island we chose 24, which will be targeted with the product. Restaurants are 4+ stars, which ensures need for the characteristics, that your product fulfills. Except for inhabitants, whose consumption of vegetable is significantly higher than in other parts of Caribbean, Barbados is visited by 665 000 tourist who come with a cruise ship and 532 000 tourist, who visit the island by other means of transport.

When making the calculations about the future performance, it is crucial to include that “cruisers” come in average for 2,5 days and “direct travelers” come for 9,8 days in average. When looking at the prices of foreign products we can easily see that foreign goods are around 1,5 to 2 times more expensive. Since we pursue strategy of market skimming and price of asparagus is around 9€ per Kg the price we recommend is 15€ per Kg. Furthermore, the restaurants prefer bigger packages, that is why we recommend to make a 5 Kg packages of asparagus. In the year we believe you should be able to sell 6 800 Kg and first time make a profit.

There are several types of costs that need to be taken into account. Variable costs are computed to be 2€ per Kg of asparagus – the price we buy from the supplier. The conservative estimate of the price of transport is 7 000€ for one delivery so 21 000€ for one year. Furthermore, delivery within the Netherlands cost around 1 000€. As mentioned before, the agent is recommended and should be motivated well. The cost of 15 000€ is assigned to this part. The marketing budget that we recommend consists of these parts. First are training events for the cooks, where a skilled chef will teach new types of dishes from asparagus. These events would cost around

6 000€ including promotion etc. In the first year we recommend to do 3 events and in the second year 2 events. The second type of promotion are catering events, where tourists and natives are invited to try new types of food. We estimate the cost of a single event 5 000€. In the first year 5 events should take a place; in the second year 4 and in the third year 3. We believe that this type of promotion will help us to reach targeted 6800 Kg in the year 3. After 3 years firm will be in loss, but in...
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