Introduction
A high number of business organizations are laying their steps to reduce the environmental pollution. The increasing percentage of plastic pollution is one of the crucial concerns of New Zealand. The increasing disposable of plastic products is directly impacting the natural environment of the country. Plastic straw is one of such disposable product that has a significant contribution in rise of plastic pollution. Creation of biodegradable straw will assist in minimizing the pollution to a minor extent. It will enable in laying step towards a health natural environment in New Zealand (Wilcox et al., 2015).
The report involves the preparation of business proposal for ‘Biodegradable straw’. Considering the report, it involves company’s vision, mission, and SMART objectives. It involves analysing the business environment of New York with the application of PESTLE Model. It includes information based on potential problems, strategic decisions and issues that will impact the business operations. It includes evaluating the appropriate management structure for the fulfillment of organizational objectives. The passing part emphasize on required technology and communication strategy for sharing the business proposal and its benefits with the local population of the country. The key aim of the report is to develop a profitable and attractive proposal for the execution of the business enterprise.
Statements
Vision
‘The vision is to make a better world through environment-friendly product’.
Mission
‘The mission is to raise the awareness of sustainability among our people’.
Objective
- The company has multiple monetary and non-monetary objectives. These are as follows:
- It aims to earn a profit of 60% by 2023 in the New Zealand market.
- Another key objective is to achieve the title of ‘Green Business’ from the legal bodies by the end of the year 2025.
- One such goal is to offer more variety of biodegradable straw to the customers by 2026.
- To become market leader of the industry till the end of 2029.
Analysis
PESTLE Analysis
It is a theoretical tool to analyze the business environment of a country. It takes into account multiple factors to provide key information about the factors that impact the business operations. It mainly includes Political, Economic, Social, Technological, Legal and Environmental factors (Cadle et al., 2014). Below is the detailed analysis of company’s external environment in New Zealand.
Political Factor
The political factor considers the elements associated with business functioning (Paul et al., 2014). It is analyzed that Corporate Tax rate of the country is 28% (Taxsummaries, 2020). Additionally, the government does not impose restrictions on conducting business practices beyond the national boundary of the country. This will provide a chance to the business as it will not face difficulty in enhancing its business operations in the international market.
Economic Factor
The Gross Domestic Product of the country was $205.02 in the financial year of 2018. The Per Capita Income for the year 2018 was $58111 (Statista, 2019). There is continuous increase in the PCI of the population and it depicts that people have fine disposable income to easily opt for the product of the business. This states that the country is experiencing fine economic growth. This will generate an opportunity for the business as it will not face difficulty in selling its products at high price to New Zealanders.
Figure 1: Bar Graph of GDP from 2010 to 2018
Source: (Tradingeconomics, 2020).
Social Factor
The education status among the New Zealanders is fine and it depicts that they are educated enough to determine the significance and value of biodegradable product (Crossley et al., 2015 ). Additionally, New Zealanders are the showing high concern towards the environment and take active steps to minimize the environmental pollution in the country. This will provide a chance to the business as it will help the business in easily gaining the customer’s attention towards its biodegradable product.
Technological Factor
New Zealand provides adequate information and communication technology to business enterprises. The technology sector of New Zealand is also booming at a fast pace and offers high future prosperity to business organizations (Richerson & Christiansen, 2013). The presence of attractive in the country will seem beneficial for the business as the business will be able to minimize the requirement of human resource for the manufacturing of biodegradable straw. Hence, this will enable in cutting cost involved in the manufacturing process.
Legal Factor
This factor considers the laws associated with protection of labour, employment, and safety rights of the business enterprises. It is analyzed that the New Zealand government protects the property rights of the business. This depicts that the business will not experience issues associated with product imitation.
Environmental Factor
The New Zealand is less prone to natural disasters like Landslide, tsunami and flood and this states that the business will not develop risk from natural hazards. This will help the business to easily run its business operations.
Considering all these factors, it is analyzed that New Zealand provides fine business environment and adequate number of opportunities for successful business operation.
Rivals of business
The business will experience competition from number of companies are engaged in manufacturing of straw in New Zealand. Below is the table describing the key competitors fo the business in the industry.
| SERIAL NUMBER | COMPETITOR | DESCRIPTION |
| 1 | CaliWoods | This company offers reusable stainless steel straw to the customers of New Zealand. It has taken an initiative to minimize the increased usage of single usage plastic and therefore, it is working towards sustainable. It aims to minimize the plastic pollution and bring a positive change in the environment through its environmental-friendly product. It connects to its customers via Facebook and Instagram (Instagram, 2020). |
| 2 | Profile International | It is a New Zealand based company founded in the year 1981. It is manufacturing straw for more than 30 years. It provides wide variety of straw as per the customer requirement therefore, its straw differs in size, color, price, and quality (refer to the Figure 2). It is also engaged in the manufacturing of degradable straws. Besides straw, it produces plastic cutlery and toothpicks (Profileint, 2020). As it is serving customers for such long period, it has high brand recognition in the New Zealand. |
| 3 | Hippie Straw | Hippie Straw is also one of the companies that offer straw. Like, CaliWoods, it also produces reusable straw in attractive designs to draw customer’s attention (Thehippiestraw, 2020). Besides straw, it offers wide variety of environmentally conscious and sustainable products. Therefore, it offers reusable and biodegradable products at reasonable prices (Thehippiestraw, 2020). |
Figure 2: Profile International straw varieties
Source: (Profileint, 2020)
Among all the competitors, it is realized that Profile international will offer high competition to the business because it is an international organization and therefore it attains strong customer base and fine market share.
Critical and Reflective thinking
An organization experiences multiple problems in the initial phase of the business. Similarly, the company will also acknowledge some difficulties. Following are the possible difficulties that will be faces by the company to operate its business in New Zealand.
Presence of competitors: There are adequate numbers of companies engaged in same product line (Instagram, 2020). Therefore, the company will experience difficulty to develop its fine market share in the industry.
The business should lay high focus in maintaining its product quality and emerging as a sustainable business organization. Its continuous efforts in raising the product quality will benefit the company in improving its market share.
Complication in operating business: As it will be a new business of environmental-friendly straw, therefore, the company will experience difficulty to successfully run its business. This is because it will require high sum of financial as well as other resources for the successful operation of the business.
Initially, the business will be operated via e-commerce platform and it will directly minimize the cost of operations. Hence, this step will allow in smooth business operations.
Generating brand loyalty: The new business enterprises experience issues in gaining customer’s trust towards their product and service. This is because trust develops with time and the business enterprise has to wait for some time to develop faith among the customers.
Winning the customer’s trust is not an easy task as sometimes it took years to develop brand loyalty among the potential users. Therefore, the business will distribute free samples of its product to the customers. After using the disposable product, the customer will be able to acknowledge the product and its fine quality. Through this strategy, the company will find an ease in building trust and faith in its potential customer base.
Generating demand and raising awareness: As it is a new business enterprise therefore the business will encounter struggle to raise demand for its biodegradable product in New Zealand. One of the objectives of the business is to develop consciousness among the customers for the use of biodegradable straw.
It will lay high attention towards the marketing of its product and therefore, it will provide attractive offers, discounts and coupon codes. This will aid the business in improving the product demand in the market.
There are multiple Non-Government organizations (like Environment and Conservation Organizations of Aotearoa New Zealand) raising consciousness to save the environment (Eco, 2020). The business will seek the help of these NGOs as it will provide two benefits to the business. Firstly, it will enable in raising awareness to minimize plastic usage and opt for biodegradable product. Secondly, it will involve minor cost of the business as NGOs work in the absence of financial gains. Additionally, the business should seek the assistance of pop celebrity as the generation is fascinated highly by their actions. It will rely on ‘Anna Paquin’ as she is one of the famous celebrities of New Zealand.
Risk of business failure: The business encounter threat of failure because it is products are not proved in the New Zealand market.
In order to minimize its risk associated with business failure, the business will consider an addition in product line. The suitable product line will be ‘biodegradable cutlery’ for the customers. Therefore, loss from one product line will be optimized through profit from another product line.
Strategic decision
Penetration pricing strategy: The business aims to attract high number of customers for its biodegradable straw. It involves setting low price to the price to raise awareness and generate fine customer strength (Ingenbleek & Lans, 2013). The business will consider this strategy as it will be best suitable to attract the customers towards new product and service. It will allow the business to minimize competition from its rivals ‘CaliWoods’, ‘Profile international’, and ‘Hippie straw’ increase its sales volume in New Zealand market.
Single line distribution strategy: There are various forms of distribution channels for providing products to the end users. The business will consider ‘Single line distribution channel’ for delivering product to the customers. This will provide dual benefit to the business, firstly, it will enable in providing early product to the customers and secondly, it will save the cost. This is because the presence of less middle man will result in low transportation cost in supply chain (Dent, 2011).
Sustainable approach: The business will opt for ‘Hybrid and Electric trucks’ to transport product at the place of utilization. These are effective transportation system that is used by the business organization in the transportation process. This trucks will enable the business to lower carbon emission in the environment. Additionally, these are economical in nature therefore; the business will not find difficult to implement its usage in business activities (Keulen et al., 2012).
Research and analysis: The business will devote effective time and energy to determine the most profitable target market for the business. Another focus will be on how to satisfy the target market based on biodegradable product. It will assist the company to gain customer satisfaction and raise higher financial returns.
Ethical issues
There is a possibility that the business will experience ethical issues concerning Maori community of the country. These are the aboriginal people of the country and they do not have an access to large number of resources because they are socially and economically backwards (Spiller et al., 2011).
To emerge as an ethical business organization, it is the duty of the business to fulfill its responsibility towards the society. Therefore, the business will have to provide employment opportunities to the individuals belonging from Maori community. In this scenario, the business will face difficulty in employing aboriginal people. This is because they do not possess adequate skills and knowledge to fulfill the requirement of the business organizations. It will be difficult for the business to recruit potential employees from this community as it will yield high cost of the business to provide adequate training and learning to these people to develop required and essential skills among them to fulfill the business goals.
Cultural issues
As mentioned in the previous paragraph that Maori community is not developed as compared to other population of the country. This is because of their low reach to suitable resources in their external environment. Therefore, it experiences wide number of cultural and social issues in their respective environment. They found themselves prone to discriminatory treatment in the workplace. Additionally, they face difficulty to connect with other individuals in their natural surroundings.
In order to solve these types of cultural issues associated with the Maori community, the business will seek for beneficial approaches to solve their concern and issues. The business will provide possible resources to the employees from Maori community
To remove any form of discriminatory treatment with the Maori employees, the business will lay regular attention on this subject. It will frame strict policies and regulations against discrimination in the workplace. Additionally, it will impose heavy punishment on employees that are found involved in such form of mal practices. It will develop fun activities involving groups as it will enable the business to develop harmonious relation between Maori employees and other staff members. This will develop sense of belongingness among the Maori community. Therefore, these minor steps will allow the company to solve the issues associated with Maori community of New Zealand.
Management structure
There are multiple forms of management structures and it includes Hierarchical, horizontal, divisional, and team based organizational structure. The business will opt for horizontal organizational structure. It refers to organization structure with fewer levels of middle management between workers and higher authority. It emphasizes on teamwork and collaboration of distinct level of management (Winnubst, 2017). It organizational structure is chosen because it aligns with the cultural dimensions of New Zealanders.
According to Hofstede Cultural Dimension, there is low power distance in New Zealand. This states that higher authority is easily accessible to the employees in the workplace. This organizational structure will provide high number of benefits to the business entity. The high collaboration will assist in maintaining fine interpersonal relation with the human resource. The employees will easily seek the help of the authorities based on work therefore it will minimize the chances of mistakes and errors. Additionally, the higher connection between lower and upper level of management will allow the business entity to motivate its employees. To sum up, the business entity will be able to attain better performance and satisfied employees in New Zealand.
Figure 3: Power Distance in New Zealand
Source: (Hofstedeinsight, 2020)
Associated Stakeholders
| SERIAL NUMBER | STAKEHOLDER | DESCRIPTION |
| 1 | Employees | The employees form the part of internal stakeholders because they are operates in the internal environment of the business. They are the core asset of an organization as they help the business entity in fulfilling their goals and long-term objectives. In order to fulfill the responsibility towards the human resource of the business, the entity will provide financial and non-financial incentives to the working staff. It will fulfill its obligations towards the employee by considering their needs and wishes from the entity (Harrison & Wicks, 2013).It will provide paid leave, sick leave, and performance based incentives. It will also offer bonuses and free snacks to the employees. It will not discriminate its employees based on caste, creed, sex, colour, religion and cultural background. It will also give employment opportunities to the Maori communities as it will allow the entity to develop diverse workforce. It will provide adequate training to the employees as per their need and requirement. Additionally, it will develop learning and career development opportunities to its employees. |
| 2 | Customers | Customers are the external stakeholder as they are also affected by the business activities and operations in the market. The customers allow the business to run business activities and gain recognition in the market. They are key resource of the business and therefore the business will lay high attention in fulfilling their expectations. This is because failure in satisfying their needs develops the chances of low profit, poor word of mouth, reduction in market share and risk of business failure in the market (Harrison & Wicks, 2013). The business will not compromise with the product quality to cut production cost. It will give prior consideration to customer’s complaints and take necessary action to solve their issue in a polite and respective manner. |
| 3 | Shareholders | The shareholders act as the backbone of the business entity as they provide support, necessary fund to help the business. They are the partly owners of the business according to the number of share hold by them. They are referred as the well-wishers of the company. It will give considerations to shareholders ideas and suggestions. It will provide timely information to the stakeholders about the crucial decisions concerning business. It will be transparent to its shareholders and will provide all the detailed information about financial transactions (Harrison & Wicks, 2013).It will timely conduct the meetings, and take prior consideration in providing the shareholders with fine monetary returns. |
Current technology
There will not be requirement of high technology for the manufacturing of biodegradable straw. This is because it is made from PLA (polylactic acid), plant starches, oil and plants. It will require Biodegradable Drinking Straw Making Machine’ that performs multiple functions like temperature controller and counter. Besides this, it will also demand straw bending machine, straw packing machine and drinking straw auxiliary equipment (Strawmachine, 2020). The core winding machine and Tembo Paper spiralling technology will also seek useful for the manufacturing of straw in New Zealand.
Communication strategy
The choice of right communication platform is highly significant to yield better result. In order to communicate the business proposal to mass population of New Zealand, the company will consider multiple media because different age group show preference for distinct media according their usage. The company will consider the use of digital media because it is highly prevalent for communicating with the youth and middle age group.
In digital media, the company will opt for social media to gain the attention of young population towards its biodegradable straw. This is social media has increased with the passing years. However, there are multiple social media platforms to connect to customers and share business proposal. The figure below clearly depicts that social media will be best suitable to garb customers attention.
Figure 4: Rise in social media users
Source: (Hughes, 2020)
However, this will not suit the Maori community because not all individuals of this community have an access to social media. Therefore, it is estimated that the business will opt for Radio as a suitable media for communicating with the community and people about the proposal. There are multiple radio stations in New Zealand but the business will opt for ‘The Breeze’ as it is the most listened radio station (Barton, 2019). It will allow the business to seek the attention of high strength of population in New Zealand. Additionally, it will find an ease in communicating the goals behind the proposal.
Conclusion
The report emphasize on the business proposal of biodegradable straw in New Zealand. It is analyzed that it has multiple objectives besides building profit and it includes minimizing plastic pollution and raising awareness for sustainability. It is assessed that political, economic, social, legal, technological and environment factor of the country offers favourable business environment to the business. This is because the country has strong GDP, PCI, upgraded technology, low trade restrictions and less risk from natural hazards. From the competitor analysis, it is evaluated that it CaliWoods, Profile International and Hippie straw are some of its key competitors in the New Zealand. As a new business enterprise, it will face some problems in business operations like gaining customer attention, developing product demand, developing market share and building trust among the customers. Considering strategic decisions, it is evaluated that the business will opt for ‘Single line channel’, ‘Penetration pricing strategy’, and ‘sustainable approach’ for successful business operation. It is assessed that horizontal organizational structure will be suitable for the business considering the power distance dimension of Hofstede Cultural Dimension. The key stakeholders of the business include customers, employees and shareholders and the business attains multiple responsibilities towards them. In technology it will mainly opt for Biodegradable Drinking Straw Making Machine, core winding machine and Tembo Paper spiralling technology. For communicating the business proposal, opting for radio as a broadcasting media will yield best result in gaining the attention of large strength of population. Hence, it is a profitable business proposal that will allow the business to fulfill its social responsibility towards the environment and aboriginal community.
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