Solution
Soumi answered on
Feb 28 2021
MANAGEMENT BUSINESS PLAN
A BUSINESS DEVELOPMENT PROPOSAL TO SET UP A SKY DIVING ACADEMY IN SELANGOR, MALAYSIA
Executive Summary
The proposed business plan titled ‘A Business Development Proposal to Set up a Skydiving Academy in Selangor, Malaysia’ offers in-depth details of Malaysian skydiving industry and the potential it ca
ies in terms of being considered as a profitable market for new business academies. The proposed plan first introduces the topic, the background of the chosen industry, namely skydiving industry in Malaysia. The first part of the proposed plan also described the rationale behind the plan and mentioned the purpose, objectives and questions, upon which the proposed plan is set up. In the second chapter of the plan, the four major factors— market feasibility, technical feasibility, operational feasibility and financial feasibility for the proper assessment of the potential in the industry in general. It is worth the mention that all four aspects have been assessed critically, offering in-depth argument for and against their roles and potential. In the third chapter of the proposed plan, the data collection methods and types have been mentioned. In case of the cu
ent plan, secondary data collection process has been used to collect secondary qualitative data from the market. In addition to the description of the data collection methods and the collected data types, the ethical issues are also mentioned. In the following chapter, the data is critically analysed in the context of the gaps identified in the plan in the introduction chapter. In the last chapter, the collected data and the analysis driven information are used for business plan and strategy implementation.
In case of the cu
ent skydiving academy, it can be seen that the skydiving market is not saturated and therefore, the need for new services are less prefe
ed. It is also seen that outdoor skydiving is popular in its original form and professional skydivers do not prefer the use of excessive technology as they take away the feel of skydiving. Therefore,
inging in any changes in the skydiving trend will not generate added attraction among the skydivers and therefore, the strategy of using differentiation will not be the perfect approach for the skydiving academy. Based on the identified gap, it is implied that entering the skydiving market in Malaysia is the only condition skydiving academies must take note of and use the scenario in their advantage for establishing a successful business. Unlike that of considering lesser number of market competitors, the increasing popularity of indoor skydiving is cutting into the market shares of traditional skydiving, namely outdoor skydiving.
Table of Contents
1.0 Introduction 6
1.1 Skydiving Industry and Skydiving Organisation Background 6
Skydiving Industry in Malaysia 6
Background of the Organisation 7
1.2 Business Opportunity 8
1.3 Purpose and Rationale 9
Purpose 9
Rationale 9
1.4 Terms of Reference 10
Research Questions 10
Research Objectives 10
Research Framework 11
2.0 Business Review 12
2.1 Market Feasibility 12
Global Skydiving Market Description 12
Analysis of Global Skydiving Market 12
Anticipated Future of Global Skydiving Market 13
2.2 Technical Feasibility 14
Description of Technological Aspects of Skydiving Industry 14
Analysis of the Technological Aspect of Skydiving Industry 15
Potential impact Technological Aspect of Skydiving Industry 16
2.3 Operational Feasibility 16
Description of the New Skydiving Operational Service Providing System 16
Alignment of New Skydiving Operational Service Providing System and Skydiving Organisations 17
Potential ways in which New Operational Systems can improve 18
2.4 Finance Feasibility 19
Required Capital for Setting-up Skydiving Academies 19
Sources of Capital Funding for Skydiving Academies 20
Potential Returns of the Investors in Skydiving Academies 20
3.0 Research Design 22
3.1 Research Methods 22
3.2 Collection Methods 23
3.3 Ethical Issues 23
4.0 Data Analysis 25
4.1 Case Finding Analysis 25
PESTEL Analysis of the Malaysian Skydiving Industry 25
SWOT Analysis of the Idea of Setting Skydiving Academy in Malaysian 27
Using Porter’s 5 Forces for assessing Competitiveness of Skydiving Industry in Malaysia 29
Using Porter’s Generic Strategies for Assessing Proper Approach of Skydiving Academy 30
4.2 Business Implications 32
5.0 Conclusion and Recommendations 34
5.1 Vision and Mission 34
5.2 Objectives 34
5.3 Marketing Plan 35
5.3.1 Segmentation, Targeting and Positioning 35
5.3.2 4P’s of Marketing Mix 36
5.3.3 Use of Ansoff Matrix in Malaysian Skydiving Industry 37
5.4 Organisational Plan 38
5.4.1 Organisational Structure 38
5.4.2 Human Capital Plan 39
5.4.3 Value Chain 39
5.5 Financial Plan 40
5.5.1 Financial Statement 40
5.5.2 Key Result Areas (KRAs) and Key Performance Indicators (KPIs) 40
5.5.3 Assumptions, Explanations and Justification 41
5.6 Implementation Schedule– Gantt chart 41
5.7 Critical Success Factors (CSFs) 42
5.8 Risk Mitigation Plan 42
References 44
List of Tables and Figure
Figure 1: Research Framework 11
Table 1: PESTEL Analysis 25
Table 2: SWOT Analysis 27
Table 3: Porter’s 5 Forces Analysis 29
Table 4: Porter’s Generic Strategies 30
Table 5: SMART Objectives 35
Table 6: Budget 40
Table 7: Gantt chart 42
Table 8: Risk Mitigation Plan 43
1.0 Introduction
1.1 Skydiving Industry and Skydiving Organisation Background
Skydiving Industry in Malaysia
Skydiving is a very popular recreational adventure sport in Malaysia and people have been skydiving nearly for thirty years. In recent times, depending on the popularity of international travel, travellers from all over the globe are coming to Malaysia to experience skydiving. Based on the increasing popularity of skydiving as an extreme outdoor sports, a number of skydiving schools, organisations and skydiving equipment manufacturers have set up their businesses in Malaysia, which has resulted in the development of an industry, which is growing fast and is holding the potential of including more companies in it.
The leading organisations in Malaysia, such as the Skydive Malaysia, Ace Skydive Centre, and Skydive Langkawi offer substantial skydiving training to the people who come for skydiving (Says, 2014). Skydiving is evidently risky and therefore, the needs for safety and diving in a safe environment have become a popular demand among the local as well as international masses. Based on the popularity of the safer skydives, indoor skydiving has become popular in recent time, which offers people to experience the floating in air, within a controlled environment developed within an artificially designed tunnel.
Considering the popularity of indoor skydiving, organisations such as AirRider Indoor Skydivin and iFly have started successful business and the flow of customers are increasing. The lower pricing of the country makes the skydiving services lower in pricing that acts as an amplifier of attracting customers, who look for adventure at a budget. It is also found that the government of Malaysia has promoted the skydiving as a part of its tourism package and experience and have generated sustainable platform for employment and earning. The Malaysian skydiving industry is very efficient in its service offerings and the standards of safety are very high, which makes it very safe and the rate of accident minimal. However, it is found that there is still scope for improvement in the industry regarding the safety of the customers as a number of customers are still found to receive injury during their sky diving experiences.
The Malaysian skydiving industry acts as a part of the tourism industry in the country, therefore, the locations of the skydiving academies, organisations and schools are set up in popular destinations in Malaysia, such as Kuala Lumpur, Sungai Rambai, Johor Bahru and Padang Matsirat (Skydive Malaysia, 2019). Based on the limited availability of skydiving organisations in Malaysia it can be assumed that setting up new businesses in new places in the country drive will generate customer curiosity. It has to be noted that setting up skydiving business organisations in popular places near Kuala Lumpur will be beneficial as majority of the travellers come to visit the popular places only. Considering the cu
ent trend in the skydiving industry, it is seen that the growth in the industry is consistently increasing and therefore, more companies are being set up in the industry, making the competition higher. The increasing popularity and the increasing demand in the skydiving industry has the potential of developing positive rivalry in the industry and therefore, new business set up is possible and potentially profitable if the recent trends are incorporated properly for strategic developments.
Background of the Organisation
The cu
ent organisation will be set up at Selangor and it will offer skydiving training as well as skydiving facilities. The company will have only one owner and the owner only will provide the entire funds invested in the business. The company will offer its skydiving facilities to locals well as international travellers. The company will have a fixed set of rules and regulations, which will abide by the national norms of safety and business ethics in Malaysia. The company will have a tall organisational structure so that the small workforce can be managed properly. The owner of the company will be responsible for all the business decisions and will make cyclic investments for business refinement and management. The company will be advertised online and offline and enter the market as a new treat to its competition. The company will offer lower prices to the customers, yet retaining highest quality possible for providing, hinting at the lower profit percentage targets.
The company will start with a taskforce of 40 employees, majority of which will be recruited from the local areas. In terms of getting the support of experienced employees with vast knowledge of skydiving training and skydiving, higher salaries, better incentives and job flexibilities will be provided. The regular employees, engaged in ordinary tasks will be offered same wages as the cu
ent industry rates. In order to offer training to the employees training sessions will be conducted once in a week by the experienced trainers. In order to accommodate the equipment, and the aircraft used for skydiving a hall will be build, while an adjoining room will be used for the training of the employees. In addition, three regular sized rooms will be building for official, dressing and miscellaneous purposes. In order to ca
y the skydivers to the required altitude one an aircraft, with a ca
ying capacity of 30 people, will be taken on lease. The company will also keep 40 sets of skydiving equipment and the safety and condition of each set will be inspected before every skydiving session.
The company will frame its legal contracts and agreements on regular terms used by rivals in the industry. The people opting for sky diving will is offered training, the cost of which will be included in the offered package and declaration of self-responsibility will be asked to be signed by the skydivers. However, in case any accident does take place due to the i
esponsible actions of the company the company owner will agree to be subjected to legal proceedings. In case the company register loss the owner of the company will have to continue the business for a grace of three months at least to regain profit, give employees to find alternative jobs.
1.2 Business Opportunity
Firstly, based on the information collected from the skydiving industry in Malaysia it is identified that the country has become one of the favourite skydiving spots in the world, as the skydiving sight during the free-fall includes greenery and beautiful landscape. Based on the increasing popularity of the country, it can be assumed that the inflow of skydivers will increase in the coming years, making the skydiving business a potential sector for profiting. However, the number of skydiving business organisations is not adequate for managing the increasing number of skydivers. Based on the low numbers and the increasing popularity of skydiving in Malaysia, it can be infe
ed that there is ample opportunity in terms of setting up new skydiving service business and earn profit.
Secondly, it is seen that indoor skydiving, which take place inside a controlled environment is gaining popularity among the masses and huge number of local and international travellers are opting for experiencing indoor skydiving. The reason behind the popularity of indoor skydiving is taking away the free-fall experience that was exclusive to the outdoor skydiving. As affirmed by Stenros (2019), as outdoor skydiving is not conducted within a controlled environment, the chances of accidents remain moderately on the higher side, making the indoor skydiving a safer option with almost all of the experiences of freefalling at offering. It is worth consideration that people opting for indoor skydiving are trained and the free-fall experience reduces the anxiety of the people about safety, which passively generates a customer base for outdoor skydiving. It can be assumed the people who has availed the indoor skydiving at some point will try outdoor skydiving, opening opportunity for profitable business. However, the only thing that has to be considered important for catering more skydivers is to offer better safety provisions and practices to inspire confidence.
Thirdly, it is seen that the use of the equipment that are used for the skydiving purposes by the skydiving business organisations, are reused and repaired and due to the limited number of customers in the country, the equipment are used more than their lifecycle, making the risk of accidents higher. As supported by Raggiotto and Scarpi (2019), the older equipment cause majority of the accidents as the free-fall and windblast create stress on the equipment making them falter easily. It is however, noticed that in case higher quality products are used and lifecycle of the equipment are considered the chances of accidents will reduce and the customer flow will increase.
1.3 Purpose and Rationale
Purpose
The purpose of the proposed business plan is to help in setting up a skydiving academy in Selangor, Malaysia.
Rationale
The business plan is developed to work under a rigid framework so that a successful skydiving business is set up properly, offering consistent profit to the owner of the business. The use of the business plan in the cu
ent case is also important from the aspect that it will keep the use of the resources and their wastage minimal, help in attaining the highest quality of performance and keep the schedule on track. As supported by Richards et al. (2019), use of business plans help in assessing the potential risks beforehand, making the conflict and issue resolution easy and effective.
The chosen sector of the proposed business plan, which is the skydiving industry in Malaysia, is significant as it is found that the country cu
ently has low competition in the chosen industry and the number of travellers coming from local and foreign countries is considering Malaysia as a prime location for skydiving. Considering the high popularity of a business, as mentioned by Aydiner et al. (2019), it can be assumed that the industry will grow over time and the way to market saturation is long, opening opportunity of consistent business, employability and profit earning.
The cu
ent business plan will help in identifying the risks involved in the industry such as the limited numbers of organisations offering skydiving services, the growing popularity of the indoor skydiving and the lower quality of safety standards causing injuries and accidents. Based on the risks the plan incorporated precautionary measures, developed from the information available in the market and issues faced by the organisation, which will make the business successful, making the aspect of profitability sustainable and worth consideration.
The cu
ent business plan will assess the reasons of the business issues that are existent in the skydiving industry in Malaysia, instead of only making note of the issues. As opined by Tsimonis et al. (2019), based on the reasons of the issues, the business plans will be framed for the business that fulfils the demand of the customers and avoid the issues. In the proposed business plan, the set of business will solve the issue of lower number of skydiving organisations, in case of safety, the use of equipment a higher investment will be considered and for the issue of growing popularity of indoor skydiving, the experience of free-fall in open air will be promoted.
1.4 Terms of Reference
Research Questions
· How can an outdoor skydiving academy be set up within six months at Selangor, Malaysia?
· What is the way to promote outdoor skydiving to customers within the age group of 25 to 35 years from indoor skydiving industry using online advertising?
· How to reduce the risk of accident during skydiving, from 15% to 5% with the use of high quality diving equipment?
· How can the setting up of the prospective skydiving academy add towards the economic growth of Malaysia?
Research Objectives
· To set up an outdoor skydiving Academy within six months’ time in Selangor, Malaysia, using market analysis of Malaysian skydiving industry
· To promote the outdoor skydiving to customers of indoor skydiving industry within the age group of 25 to 35 years, with the help of online advertising
· To reduce the potential chances of accidents during skydiving from 15% to 5% with the use of high quality diving equipment
· To support and enhance the economic growth of Malaysia through setting up the skydiving academy
Research Framework
Figure 1: Research Framework
(Source: Learner)
2.0 Business Review
2.1 Market Feasibility
Global Skydiving Market Description
The sky diving industry is comparatively small in comparison to the other recreational activity industries around the globe. The outdoor skydiving industry on the global platform is small, however the growth rate of the industry is has retained its symmetry in terms of growth of the tourism industry. The industry despite being small follows the global standards of parachute safety norms and the local government norms for safety is less significant. The growing popularity of the skydiving around the globe is the outcome of the global tourism boom and the tendency of experiencing thrill. The global skydiving market is less popular, however, the customer base is very consistent and the negative growth of customer flow has not been observed steadily. Only a limited number of skydiving academies, owing to the fact that setting up a skydiving academy requires heavy investment and involves risk, which smaller organisations struggle to afford, dominates the small market (Indoor Skydiving Source, 2018).
Despite the limited number of skydiving academies in the market, it is highly competitive, as all the major companies in the industry tend to offer similar price points. The industry is divided in two sections, among which indoor skydiving is promoted as safer, yet artificial environment that is catering more customers than the mainstream outdoor skydivers (VR Scout, 2017). The industry uses online and offline advertising platforms for promoting its services and therefore, foreign skydivers contact to the skydiving academies in the industry easily. Considering the points, at which the services are offered are moderately high. The industry despite having consistent customer flow has been dominated by the service providing and skydiving training, while the equipment manufacturing has not been prioritised in the context to the degree of demand and hence are imported, making the prices of the equipment high. The majority of the customers in the industry are young adults and adults. The industry; however, is not systematically distributed all over the globe and has remained stationary in places, which are popular as tourist destinations (Indoor Skydiving Source, 2018).
Analysis of Global Skydiving Market
The craving for adventure sports, especially the extreme sports and activity category is becoming very popular, making the global skydiving industry a consistently growing market. Considering the fact that skydiving industry is small in comparison to the other recreational industries, it will potentially grow and is in its expansion phase. As the number of tourists is increasing worldwide and skydiving is promoted as a part of tour experience, it can be stated that there is many opportunities of earning profit from the industry and risk of customer flow hindrances are low. The global skydiving industry is yet to formulate its exclusive and high quality safety norms for outdoor skydiving, however, its abidance to the global safety standards for extreme sports, which makes it easily compatible with the international tourists, who have taken note of safety in earlier adventures. The indoor skydiving is also becoming popular and is a major threat of the outdoor skydiving around the globe. As argued by Lee and Ewert (2019), the threat generated by indoor skydiving is temporary, as the customer base of outdoor skydiving is passively generated from indoor skydivers, as one part of the customers eventually try outdoor skydiving at some point of their lifetime.
A critical analysis of the chosen industry hint that setting up of business can be achieved with high investment and the number of competitors in the market are low, increasing the chances of profit earning. The higher pricing of the skydiving equipment make them used for longer durations making them susceptible to malfunction and cause accidents. As assessed by Breivik (2019), it is noticeable that skydiving around the globe is very limited in terms of the locations of the skydiving sights, especially in areas where people come to travel. From the selection of locations for setting up skydiving academies, it can be understood that the academies are majorly set up to attract foreign customers, who come to visit the popular destinations during their tours and travel as travellers. Considering the targeting of young adults in the industry, it can be assessed that the adopted business strategy is aimed at long-term and consistent profit earning.
Anticipated Future of Global Skydiving Market
Based on the cu
ent trends and the analysis done based on the trends it can be expected that in the near future the market for skydiving, comprising both indoor and outdoor will expand as more people will try to experience the thrill of freefalling and adrenalin rush. Considering the competition generated by indoor skydiving in terms of their safety, it is expected that the outdoor skydiving industry will invest in refining the safety standards, the quality of the equipment and risk evaluation techniques. As affirmed by Araujo et al. (2019), the refinement of the safety norms would make the customers more confident about skydives, resulting in probable increase in the number of customers and higher profit earning scope. As a significant section of the travellers are found to be trying outdoor skydiving, in near future the government of countries around the globe have the potential chances of investing ample amount of money in the industry as a part of its promotion of tourism industry. Based on the cu
ent trends it can be assumed that in future the industry will generate higher number of employability scope, although the number of employment offered will be lower than mainstream industries of extreme sports and activities.
The leading organisations in the skydiving industry around the globe, have aimed for setting up diving locations along with safer services and better value for money propositions. Therefore, it can be expected that in near future the mere offering of skydiving will not be enough and the entry to the industry will be difficult for the new organisations. As stated by McIlwaine et al. (2019), the promise of better offering to the skydivers would require skilled human resources that would make the offering of value for money services. Considering the fact that skydiving services worldwide is moderately prices higher, which has undermined the growth of customers in the industry, the pricing most probably will decline, becoming more affordable to a larger section of customers.
2.2 Technical Feasibility
Description of Technological Aspects of Skydiving Industry
The use of technological aspect is a prime factor of the skydiving industry, which relies greatly on the technological innovations that ensure accurate assumptions, optimum safety and the functionality of the equipment used. As mentioned by Marshall (2019), technology, in the modern age is a mandatory part of an industrial development. Technology is used by the meteorological departments all over the globe for the forecasting of the days as well as the development of the following days. The meteorological departments use instruments such as wind vane, hygrometer, thermometer, rain gauge and barometer to note the wind direction, measure the humidity in the air, temperature, amount of rain and air pressure of a particular place respectively. The weather report formed out of the mentioned aspects help skydiving service providers to choose the right season, day and time, ensuring the most favourable diving conditions for safety.
In addition, the parachute, the GPS, altimeter and the safety gear are also the outcome of technological innovation, which gives the skydivers knowledge of their situation and safety. As mentioned by Salas De Armas et al. (2019), the parachutes, the mechanism of its unfolding at the time of deployment and the accuracy of the GPS and altimeter have been refined over the years. The safety gears have also become more secured and dependable based on innovative refinements induced by technological applications. However, in comparison to that of the indoor skydiving, the outdoor skydiving requires less technological aid. In case of indoor skydiving technology is being used to control the wind speed, the direction of the flow, the generated air pressure and many more, which offers better safety. However, the professional outdoor skydivers do not use excessive technology. It is seen that majority of the technological innovations relating to parachuting equipment production such as safety gears and parachutes. The technological usage in the industry is growing as Virtual Reality (VR) and Augmented Reality (AR) is being includes for better experiences before, during and post the skydiving (VR Scout, 2017). The use if VR is making people experiences the skydiving visuals, while the AR helps the skydivers to assess their jumps better.
Analysis of the Technological Aspect of Skydiving Industry
Based on the trends of the usage of technology in the skydiving industry it can be said that the industry is refining itself in terms of accuracy and safety. Technology is offering safety, which is acting as the major reason for the increasing number of the customers in the industry. As opined by Cao et al. (2019), the rapid evolving of the technological sphere is making the technology more affordable, because of which new skydiving organisations are being set up, offering low pricing and high quality. As the use of technology in skydiving industry has majorly, be done for the weather assessment new business set up in the industry have become decentralised allowing any location that is legally cleared for skydiving. As the technology has aided the knowledge of the su
ounding of a skydiver, the need for experience has reduced significantly, as a result of which the customer base is increasing, however, the safety features during the skydives are still not immune to the chances of accidents and it is found that the deaths of skydivers are always reported. As supported by Qu et al. (2019), the number of accidents despite technological innovation hints at the fact that the scope for refining technological innovation is ample and worth consideration.
The occu
ences of the accidents that are responsible of several deaths and uncountable injuries have reduced the confidence level of the general population and people have opted for safer options such as the use of VR and indoor skydiving that has lost out in offering the gravitational pull and free falling sensation, offered only by outdoor skydiving. The use of the technology have evolved fast, however, the latest technology in the skydiving industry are expensive and business organisations aiming to upgrade to the latest versions reconsider their investments in order to save profit over latest technology availing. As noted by Wakabayashi et al. (2019), the use of technology in the skydiving industry has made skydiving safer, therefore, places where technology is not available or the economy is very low to attain the technological facilities, the setting up of skydiving business will not be successful as the chances of accidents will be higher.
Potential impact Technological Aspect of Skydiving Industry
Based on the critical analysis of the technological feasibility in the skydiving industry and its trends imply that in the near future outdoor skydiving will become safer with the advent of time, as the use of newer technology will not only offer safety, but also accuracy of the environment, in which the skydiving is performed. It is also important to note that the technological usage in the industry will also help safety gears to be more reliable. As argued by Vega (2018), despite the increasing market share of indoor skydiving, the outdoor skydiving will retain its customer base and would probably increase it, as the safety standards get higher. As the weather, predictions will get accurate with technological usage new spots of skydiving will be set up, encouraging more people to take part in the adventure, making the customer base bigger. The increase in the use of VR and AR along with the indoor skydiving facilities will promote the desire for outdoor skydiving.
It is also worth the mention that while the use of technology will make the safety higher the thrill of free-fall and adrenalin rush will reduced considerably. Based on the adaptation rate of the technology in skydiving industry, it can be infe
ed that the investment for buying and developing technological innovation will be beneficial for the business organisations in the industry. The rapid technological innovation in the field of skydiving will reduce the cost for availing the technology in business. As opined by Trow
idge and Wallace (2018), as the skydiving industry is getting more reliant on the technological innovation and the prices of technology...