Kelvin's Authentic Wine: Crafting a Niche in London's Portobello Market

Name of business, vision, and mission statements

The name of the pop-up business is "Kelvin's authentic wine". This shop is located at Portobello market in London, UK. This business is focused on selling the finest, organic and authentic quality wine is the product. They have come up with an idea of selling wine on a small scale and later on, they might grow their business to become one of the largest breweries in the UK. This company has a vision of selling wine in its authentic form with no adulteration of components and keeping it in a safe environment until served. The mission of this company is "We grow with our customers"(Camilleri, 2017). This business has a mission of giving people enjoyment and taste of authentic wine by using the finest quality raw material. A detailed understanding of business ventures is required for the company's growth and sustainability achievement in a competitive market of the UK (Wu, Yuan, and Pan, 2018).

Explanation of types of venture set-up

This type of venture is associated with partnership, as it is a small business and it needs good support for the development. Long-term stability and growth have been found out through applying the relatable actions in wine trade (Cherrier, Goswami, and Ray, 2018). However, in this case, collaborating with banks or maybe some big shot investors can become a good idea. It is expected that if investors like the taste of wine and become eager to invest in business then the business growth will be faster. That is why partnership is chosen as the idea of business venture (Maizza et al. 2017). This store can plan online sales, by collaborating with e-commerce giants such as Amazon for featuring the product on their website. As the business will directly collaborate with e-commerce platforms, the middleman cost will be eliminated and profit will be maximized. Moreover, providing people free samples with pamphlets of store location is expected to help the store generate maximum profit offline as well.

Detailed analysis of the market

The wine shop comes with a facility of home delivery, so that customers can order from them at any hour (Angelova et al. 2019). Market penetration is rapidly changing and the public is more focused on organic beverage shopping (Hamid, and Abu Naseib, 2018). Hence, the 100% organic tagline is expected to introduce maximum sales for the organization and provide marketing opportunities. "In 2018, the UK wine and spirits industry: created £49 billion in economic activity, generated £21.7 billion in sales, £10.6 billion of which in sales of wine. Employed 358,000 people across the supply chain by sales increase" These statistics clearly show that UK has potential of selling wine at a good amount. “In 2019, 12.59 million hectoliters of wine were released for consumption by HM Revenue and Customs”. Pestle analysis of this business that is associated for market development and opportunity is as follows

The market gap can be met with authentic and quality tested organic wine sales at an affordable cost for everyone. The target customers are middle-income group and people above the age of 18. There is lack of authentic wine sellers in the market and this can be used as a market opportunity for the company. The Portobello market is one of the largest tourist destinations in UK. This brings a clear opportunity to sell wine to the tourist. The pop-up shop meets customer’s needs by allowing them to purchase quality product at affordable costs. The company will sell affordable food combos with main wine product. It also comes with free home delivery service and take away.

Creation of appropriate marketing and sales strategy

As derived by Ferrer, and Villanueva, (2020), unique selling of this business idea will indulge in as organic wine selling and that at a low cost. Promotions can be done with offers of 50% off on next purchase for fresh customers of this wine shop. Promoting gift sets of different flavored wine can be a marketing strategy. The gift box can be customized in terms of shape and the sizes and special messages can be written on the gift sets. It is quite easy to create a social media page nowadays. Social media is associated with the clear and coordinated components of managing sales through promoting business in different locations across the globe without any extra travel charges. Social media is identified as a market penetration strategy and it becomes easier to penetrate inside the market (Kotler, 2020). SWOT analysis of this business can give internal and external business performance idea:

City of London gives an effective place for marketing as locals and tourists all people are interested in buying organic wines. UK has been an attractive market for wines for decades. Market entry channels are wide open and most of the wine shops are owning the business since ages. UK’s wine selling is based on three main qualities like labeling, quality and additives along with record keeping.

Market development

Creating an USP of free home delivery for the pop-up business is expected to create a market development. Selling some uncommon pours that are not available in other shops might increase the market demand of this organization is both locals and tourists.

Product development

Product will be developed in factories and they will be transferred to the shop. This helps in managing the business until it becomes a success and contains own factory of production.

Diversification

Uses of human resources and funding are expected to help this organization grow. Funding received from bank is essential to selling a new product in a new market.

Detailed competitor analysis

USP for this shop will be “Hold your breath, as the authentic wine is yet to be poured”. Competitor in UK market is Hardys, Barefoot and Tesco. They are premium brand and beating them is quite a tough job (Sánchez-Gutiérrez et al. 2019). However, the competitive advantage for this business is that the shop is providing appetizers and food combos with wine. The total cost of ordering the combo is slashed down to 50% for initial sale increase. “Visitors should be encouraged to have sample various wines and learn about the history of the distillery.” Moreover, they are preparing a beverage that is free of harmful preservatives and all natural (Ngugi, 2019). These are some aspects that can provide the business with adequate competitive advantage.

Justification of the human resource requirements

There will be technically advanced machines used for extracting wines and customizing them according to the customer's taste. Human resource is required for transporting the wines from factories to the shop. According to Murínová (2017), customers might ask for a mixed flavor of and that should be delivered to them. For a pop-up business it is not possible to produce wine on their own, however, the produced wine can be transported and sold in the shop. A team can be built up for managing the online medium of promotion. Another Team is required for spreading the pamphlets of a new product in town. Responsibilities are aligned with requirement optimization and clear synthesis development of job roles. An accountant is also required for a complete analysis of roles inside an organization. The operational structure will need to hire delivery boys and there will be staff serving the liquor to customers in-house (Sheth, 2017).

Suggestions relating to the sources of funding venture

As the figure, it is evident that Barclay’s is one of the most supportive banks that helps the business pop up to grow. Commercial banks such as Barclays can be taken into consideration for taking down public venture options. As commented by Olarte-Pascual, Oruezabala, and Sierra-Murillo, (2017), capital funds are important for any organization to initially set up any business. Barclays is found to be one of the best banks in markets as product suite is improved. Improved technology and investments in client footprint have been seen for sustainable development of Barclays'. This organization's shares have risen to 28% this year and it has become one of the best performing investment banks. Barclay's has stocked up a U.S credit card unit that can give benefits to reach out to a large variety of people with business reopening and analyzing the factorials (Trivedi, Trivedi, and Goswami, 2018). The payback period is also good for the management of markets with a rising share rate. Approx, 69873 loans are approved with a value of £2.1billion by Barclay’s. In this case, investment capital should be around £30000.

Cash flow statement

The Cash Flow statement for the operation is:

Profit and loss summary

In this projected cash flow, there are operational costs identified such as inventory, rent, wage and utilities. Insurance and miscellaneous charges are associated with the entire volume of operation. The expected cost of inventory is identified to be 1500, whereas renting cost will be 1000 for the production house. Labor charges are 2500 with utility cost of 500. Accounting costs will be managed within 518 so that the project is successfully managing its operations.

The cash flow table suggests how the cash flow statements can be indulged in business the pop-up business development can be successfully managed. Profit can be calculated from subtracting the total expenses from total revenue (Sasso, and Solima, 2018). Sales in the first year are expected to be 15518 and after-tax, profit should be 10266.3. There is provided an idea of projected cash flow, which is expected to be 10266.3 in the first year of 2021. Before-tax, profit is identified to be 11407, which is quite good in terms of starting a pop-up business initially.

References

Journals

Angelova, M., Georgiev, P., Dimitrova, G. and Pastarmadzhieva, D., 2019, October. Business-Science-Education: a Collaboration for Competitive and Sustainable Growth of the Wine Industry. In IOP Conference Series: Materials Science and Engineering (Vol. 618, No. 1, p. 012070). IOP Publishing.

Camilleri, M.A., 2017. Corporate sustainability and responsibility: creating value for business, society, and the environment. Asian Journal of Sustainability and Social Responsibility, 2(1), pp.59-74.

Cherrier, H., Goswami, P. and Ray, S., 2018. Social entrepreneurship: Creating value in the context of institutional complexity. Journal of Business Research, 86, pp.245-258.

Ferrer, J. and Villanueva, E., 2020. A managerial survey to discuss wine business models. International Journal of Wine Business Research, 33(1), pp.102-117.

Golicic, S.L., Flint, D.J. and Signori, P., 2017. Building business sustainability through resilience in the wine industry. International Journal of Wine Business Research.

Hamid, A.A. and Abu Naseib, A.G., 2018. The mediating role of value co-creation on the relationship between structural supply chain orientation and marketing adaptiveness: a structural equitation model. International Journal of Supply Chain Management, 7(1), pp.112-128.

Jraisat, L., 2017. Factors of relationship marketing in creating leadership. Journal of Organisational Studies and Innovation, 4(1), pp.1-14.

Maizza, A., Fait, M., Scorrano, P. and Vrontis, D., 2017. Old, new and third wine regions: a consumer perspective. World Review of Entrepreneurship, Management and Sustainable Development, 13(5-6), pp.521-541.

Murínová, A., 2017. Wine Marketing: The Case of Micro and Small Wine Companies in the Czech Republic. In Innovation Management, Entrepreneurship and Sustainability (IMES 2017) (pp. 641-653). Vysoká škola ekonomická v Praze.

Ngugi, I.K., 2019. Co-creating Value in the Dyadic Relationships of Small and Large Firms in the Agri-food Sector. Journal of International Food & Agribusiness Marketing, 31(1), pp.52-68.

Olarte-Pascual, C., Oruezabala, G. and Sierra-Murillo, Y., 2017. Innovation ecosystem: a trigger for new product development? Exploring the acceptance of a sparkling red wine amongst Spanish small business actors. International Journal of Entrepreneurship and Small Business, 32(1-2), pp.47-63.

Sánchez-Gutiérrez, J., Cabanelas, P., Lampón, J.F. and González-Alvarado, T.E., 2019. The impact on competitiveness of customer value creation through relationship capabilities and marketing innovation. Journal of Business & Industrial Marketing.

Sheth, J., 2017. Revitalizing relationship marketing. Journal of Services Marketing.

Trivedi, K., Trivedi, P. and Goswami, V., 2018. Sustainable marketing strategies: Creating business value by meeting consumer expectation. International Journal of Management, Economics and Social Sciences (IJMESS), 7(2), pp.186-205.

Wu, Y.J., Yuan, C.H. and Pan, C.I., 2018. Entrepreneurship education: an experimental study with information and communication technology. Sustainability, 10(3), p.691.

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