The Different Aspects of the Business Plan for a New Startup Company

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PESTL Analysis

- Politics:

The political situation in Egypt has been unstable for the past six years, especially after the revolution of January 25th, 2011, and what was followed by several events and clashes between security forces and the rebellions. This instability was never a nourishing environment for investors or new businesses to emerge.

- Economic:

The Egyptian economy has been suffering from the outcomes of this period, and it was very clearly noticed in the first eight months of 2011, the imports of American hardwood lumber has fallen by 45% compared to the same period from January to August of 2010, given the fact that Egypt’s furniture industry is the primary end-user of American hardwood lumber. However, in the past three years this situation has changed due to the contribution of Egyptian manufacturers in many worldwide furniture exhibitions, and the openings of more factories and establishments that support the furniture industry in Egypt.

- Social:

As globally known, Egypt is one of the countries reputed with its historical culture that is strongly present in the designs of classic furniture, modern furniture, and antiques. However, the vision towards the future of furniture industry is aimed to modern design ideas that can fit the needs of the community. The vast increase in population in Egypt, and the number of adults who are beginning their lives whether by marriage, or living independently from their families, or who are starting new businesses, are the targeted customers with the profiles that would be open to the concepts of modern design, and smart solutions to manage small spaces.

- Technology and Legal:

Egypt’s furniture industry has expansion is mainly due to the assistance of favorable government regulations and strong support from the Ministry of Trade and Industry. These business friendly policies have provided a strong support for Egyptian furniture producers and play a critical role in the sector’s continued development as a global leader. Two of the entities are of particular importance to the Egyptian furniture sector’s emergence: the Industrial Modernization Centre and the Egyptian Furniture Export Council. The Industrial Modernization Centre, funded by the Egyptian government, the private sector, and the EU, provides technical assistance to producers, in the form of improving productivity, training manufacturers, and enhancing sector output and exports. (According to Egyptian Furniture Sector Development Strategy Detailed Report, December 2010).

Market Analysis

Market Segmentation, Target Market and Positioning

Segmentation

Geographic Segmentation:

- Cities: The market is divided according to the geographic criteria into two segments: a segment which includes people in Cairo and Giza and another segment for those who live in other governorates other than Cairo and Giza.

Regions: Moreover, Cairo and Giza can be divided into regions. Such as, Zamalek, Mohandesin, Nasr City, 6th of October, Al Sorouk City, Maadi, Heliopolis and New Cairo.

Demographic Segmentation:

- Age: The age range of the customers are

- 20-30 years old

- 30-40 years old

- 40-50 years old

- 50+ years old

- Family Size: Our targeted families are

- Singles

- New married couples

- Small Family with 1-3 children

- Large Family with 4+ children

- Income: The market can be divided into people who get affluent income, moderate income or low income. People who earn low incomes are mostly regarded because their income can barely afford buying a lot of furniture and so needs better solutions for their houses.

Psychographic Segmentation

- Social Class: We have also divided the customers into low, medium and high social class. The low social class is our main focus so they will be able afford to buy our high quality and somehow inexpensive products.

- Lifestyle: The market is also divided according to the different characters of people. Our concentration will be on people who are willing to try new types of products and try out different living lifestyles. Furthermore, the market can be divided into people who have an eventful work life and they want to end the stress and tension as they reach their home. Hence, Smart Design will be a stress reliever when having stressful life full of work and problems.

Targeting

Our main location that we will target is New Cairo. Moreover, according to CAMPAS, the age range of 20-30 years old represents more than 40% of Egypt’s population which is definitely a large percentage. Therefore, the main target customers would be young newly married couples who are between 20 to 30 years old who are willing to find good affordable design solutions for their relatively small living space.

Positioning

We are generating an impression of the highest quality and customizing the design by combining two different types of functionalities in one piece of furniture and putting that idea in the minds of our customers.

In summary, the main key benefit that we offer to the target market:

- Unique high quality expandable furniture and home accessories (the first to exist) to serve young adults as there are many of them who cannot afford living in apartments with a lot of space and so are looking for appropriate type of furniture that can fit in small spaces. Thus, our product will represent adolescence and respect for our customers.

Buying Decisions

There are three main ways to understand the customers better. One is to put yourself in their place and try and look at your business from their point of view. The second way is to collect and analyze data in order to shed light on their buying behavior. The third way is simply to ask them what they think by interviewing them or making them fill out survey forms.

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