Business PlanTEJANI PROJECT

Table des matières

A. CONTEXT

B. EXECUTIVE SUMMARY 4

C. INTRODUCTION 6

D. COMPANY DESCRIPTION 8

E. STRATEGIC MARKETING 9

I. SEGMENTATION 9II. TARGETING 9III. POSITIONING 9B. STRATEGIC GROUPS OF JEWELRY INDUSTRY 10C. COMPETITION 12I. PORTER 5 FORCES 12II. LEADERS WITHIN THE MARKET 13D. SWOT ANALYSIS 15I. S – STRENGTHS 15II. W- WEAKNESSES 15III. O-OPPORTUNITIES 16IV. T- THREATS 16E. PESTEL ANALYSIS OF GERMAN JEWELRY MARKET 17I. P – POLITICAL 17II. E – ECONOMIC 17III. S – SOCIAL 18IV. T – TECHNOLOGICAL 19V. E – ENVIRONMENTAL 19VI. L – LEGAL 20F. BUSINESS MODEL 21I. CUSTOMERS SEGMENT 21II. OFFER 21III. CHANNELS 21IV. CUSTOMER RELATIONSHIP 22V. REVENUE STREAMS 22VI. KEY RESOURCES 23VII. KEY ACTIVITIES 23VIII. KEY PARTNERS 23IX. COST STRUCTURE: 23G. MARKETING MIX 25I. PRODUCT 25II. PRICE 25III. PLACE 26IV. PROMOTION 26V. PEOPLE 27H. VALUE CHAIN (PORTER) 27I. SUPPORT ACTIVITIES 28II. PRIMARY ACTIVITIES: 28I. CRITICAL SUCCESS FACTORS 28

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I. Context

a. Executive Summary

Future brides in Germany could be the next to experience scintillating products that could change their wedding day from being memorable to spectacular? Tejani is a small company from the United States of America that has an aim to supply modern and fashionable jewelry to women in Germany at an affordable price. Items are designed with the intent of creating a product that is desirable whilst remaining reasonably priced for the customer.

Unlike so many jewelers that target the wealthy using expensive and rare materials Tejani is offering an alternative to consumers on a tighter budget. More often than not women are unable to buy jewelry they want due to the extortionate prices of precious metals and stones. This is especially true for brides, as a wedding is a one off event (traditionally) where a piece of jewelry may only be worn for that single occasion therefore buying an overly expensive piece is not always an option. A wedding is a time for women to be the centerpiece and eye catching for everyone to see, so why should money prevent this from happening? There are many reasons why brides may not want to spend as much money on their wedding outfit whether this is due to a budget or they don’t feel the need to over indulge for one single day but this does not mean they shouldn’t look any less glamorous.

Tejani offers a wide variety of jewelry that don’t lack in style or quality for all tastes and trends. The main difference from Tejani and other high end Jewelers offering a similar service is the price. Although a price tag can be the reason for buying a product due the exclusiveness it offers but now a bride can have all the qualities of an expensive piece of jewelry at a price they can afford.

There’s a huge potential market in Germany with there being and estimated population of 80 million and has one of the strongest economies in the world, making it good starting point for entering the European market. Currently in Germany there are many small independent Jewelers offering high quality products along with the large global Jeweler brands but there are few that are focused purely on bridal jewelry, this creates a huge opportunity for Tejani to take a percentage of that market relatively unchallenged.

Tejani offers a unique service for brides and their female entourage by offering unique designs of jewelry that radiate class and quality but are reasonably priced unlike the majority of the competition. Sets of jewelry

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are available allowing a bridal party to have a theme of jewelry but each individual piece having its own subtle differences.

Each piece is designed with the intention of keeping the cost of the product low but without compromising the style.

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b. Introduction

The purpose of this report is to come up with a business plan and market plan for the company Tejani to enter the German Market coming up with a business model to suit the attributes of the company and one that will be able to cope best with the challenges that the German market will throw at it. It will look closely into what sort of competition is currently operating in the bridal jewelry market and the financial projections that can be expected.

The report will show the findings of a SWOT (strengths, weaknesses, opportunities, threats) analysis looking at both external and internal factors to try and gain a clearer picture of the market and the company. Although the SWOT analysis matrix is a fairly simple tool to use it is one that is very effective in operational execution strategies. Through the use of the SWOT analysis grid (figure 1) management can learn how they can

take advantage of their strengths as a company, see where there weaknesses plus helping to magnify possible organizational threats (Hofer & Schendel,1978).

A similar method that will be used alongside the SWOT and PESTEL analysis is Michael Porter’s five of competition position, which are;

Rivalry among existing competitors Threat of new market entrants Bargaining power of buyers

Bargaining power of suppliers Threat of substitute products or services

Michael porter says that in order for a firm to have competitive advantage and profitability it depended on these five competitive forces. “Awareness of the five forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack”. He also states that you must have a clear understanding of the industry you operate in (Porter, M 2008).

PESTEL was first used by Aguilar as ETPS (economic, technical, political and social). It took until the 1980s before PESTEL was what it is today, (political, economic, social, technological, environmental, legal). There are two basic functions to PESTEL analysis according to Dincer, the first being that it allows an identification of the environment the company will be moving into and operating in. Secondly this tool provides predictability for future situations that the company may face (Dincer, 2004). This form of analysis is one that can be utilized in strategic management but it also has

(Figure,1 ) shankar soma

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limitations. This matrix of analysis will look at external factors that may hinder Tejani in the German market. Due to the fact that the intended structure of the company which will be setup as a Limited Liability company (GmbH) there are several taxes that will have to paid and more specifically the cooperate income tax. After carefully analyzing both external and internal environments thoroughly and painting a clear picture of what the current situation is, the report will will progress to producing a business model that is best suited for Tejani. Choosing the right business model is vital and defines the manner by which the company delivers value to its customers. A business model is not something that can give you a competitive advantage unless it easily differentiated. The majority of business models adopted can be easily copied by companies therefore it neither sets your company apart nor gives you an edge against the competition.

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c. Company Description Tejani is an independently run company based in New York. It began

trading back in 2004 when the owner and sole founder Urvi Tejani seen a gap in the jewelry market. She wanted to give brides the opportunity to buy stylish and fashionable jewelry for their wedding day. It’s a well-known fact around the world that on their wedding day the bride is the showpiece wearing an extravagant dress and jewelry to match. The jewelry pieces she offers not only cater for the bride but also the bridesmaids and other female members of the bridal party. Urvi noticed that so many jewelry companies only focused on the wealthy customers and although there were alternative products that were cheaper there lack of quality and style was easily noticeable. The business was set up on the principle of giving brides quality fashionable pieces of jewelry that weren’t overpriced. With a proud Indian heritage behind Urvi the designs of her jewelry are a combination of this plus her modern NY fashion sense, which gives her designs a unique twist. A way Tejani manages to keep the cost of her products low was by setting up the manufacturing of the products in India, each product is hand crafted and then exported to US to either be sold in the shop or to be packaged and sent to her online customers the ability to keep material costs and production costs down help to make the business sustainable for the future.

Tejani operates out of one store in New York City and also has an online platform that allows customers to purchase products. This website, which has details of all the products available for sale, offers free delivery on all internal orders in the US. This is a great way of increasing the popularity of Tejani as a wider audience is captured plus customers can have the luxury of buying the products from their home.

The company has a wide popularity in America being featured in several prestigious wedding magazines and receiving recognition by notable people both from within the industry and out with. The company has an ambition to enter foreign markets beginning with Germany although this may not seem like the easiest option given the Initial language barrier. Given the competition around Europe in designer jewelry mainly France, Italy and England it seems like a sensible option for a relatively small company.

Primary objectives for Tejani over the next few years: Infiltrate the German market to begin trading as soon as possible Build awareness for the Tejani brand both online and in shops. Become sustainable in a competitive German market Gradually Increase market share Look to set up several shops across Germany

II. Current situation

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a. Strategic marketing

i. Segmentation

Evolving on the market of jewelry, the company Tejani is focusing on a very particular segment: the wedding.The high quality jewels that the company offers are mainly intended to be worn during this unique day: necklaces, bracelets, earrings…future brides can have the best for themselves and their bridesmaids. Although not excluding other potential purchases (for other occasions such as anniversaries, gifts…), Tejani, by focusing mainly on this particular occasion and working on a marketing purely oriented towards brides, offers itself a very clear position on a blue ocean market.

ii. Targeting

As mentioned above Tejani offers high quality jewels at an affordable price. As present on the wedding market, which is supposed to be a once in a lifetime experience, we can assume that customers will only make a unique purchase. The Jewelry and ornaments are produced for women. We can clearly identify here the first target: future brides. The second could be their bridesmaids. Of course, the company’s products can also appeal to other women for diverse occasions and therefore, Tejani addresses women in general. Regarding future brides, the average age to get married for a woman is 26.5 years in Germany, not excluding other women though, the target of Tejani includes women from 25 to 45 years old.Being affordable, women who will buy those jewels are from middle class.

The main target of Tejani is therefore, women from middle class aged between 25 and 45 years old.

iii. PositioningTEJANI positions itself as “affordable handcrafted bridal jewelry for the bride and bridesmaids”.

Sources : 26.5 years old average age to get married in Germany “Mariage et famille en Allemagne”

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b. Strategic Groups of Jewelry Industry

The figure shows strategic groups of jewelry industry. The upper right group is the group with higher price and higher visibility, which are Cartier, Tiffany or Bvlgari. Further, on the lower right one is the group with Swarovski and Thomas Saba. They are located in higher visibility and lower price. The lower left one is Pandora and TEJANI group who is with lower price and low visibility.

Strategic groups of jewelry industry.

Figure 1. TEJANI and competitors positioning map.

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c. Competition

i. Porter 5 forces

In this section, the five forces will be use to shape industry competition. The five forces include Threat of New Entrants, Bargaining Power of Buyers, Threat of Substitute Products, Bargaining Power of Suppliers and Rivalry Among Existing Competitors.

Bargaining power

The bargaining power of supplier is low. According to Maps of India (2011), silver jewelry handicraft is quite popular in India, especially in Karmal, Hathra, Varanasi or Kolhapur (see picture 1). India is a county known for handicraft. We assume that it will not be hard to find highly skilled artisans. Since the income level is low, and the supplier can be found easily in India, the bargaining power of supplier is low.

Threat of substitutes

The threat of substitutes is very low. The purpose of TEJANI’s product is to decorate brides or bride mates’ appearance. There are little to no substitutes for wedding jewelry. A ring is a ring, a bracelet a bracelet. Wedding jewelry is a standard product across the board. It is merely the design, style, price, on occasion the brand and reputation that dictate which to choose. Other than that wedding jewelry has no substitute.

Threat of entry

The threat of entry is high. The market completion in Germany is quite intensive since every global jewelry brands (e.g. Swarovski, Pandora and Thomas Saba) have been operating the business in Germany. However, in recent year, clothing firms also sells accessories and jewelries. High fashion brand (e.g. LV, Gucci, Chanel) have jewelry in their product categories. Meanwhile, lower price clothing firms (e.g. Zara, H&M, Calvin Klein) also sell rings and bracelets. What is more, online shop (e.g. Amazon, Ebay, Alibaba) are also be able to help small size firm to sell the product online. Hence, the threat of entry is high.

Bargaining power of buyer

The bargaining power of buyer is low. The buyers are mostly from individual women, not from a firm or an organization who has power to buy huge amount of TEJANI’s product. And the price cannot be negotiated in online shop. Hence, the bargaining power of buyer is low.

Intensity of competitive rivalry

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The intensity of competitive rivalry is low. TEJANI has developed the business in the U.S. and the collection has been featured in Brides magazine. The company has experience to open a shop and deal with online orders. Their products are unique which is designed by Mumbai Indian craftsman. What is more, the product can be customized by client’s preference with affordable price and good quality. But considering Germany is a different county with different consumer behavior, the previous experience might only have a little help. Also, TEJANI is a small size company; they might have lack of human resource. Especially the human resource to support language barrier and legal terms are very important.

Therefore, TEJANI will need to put a lot of effort to start a business in the country (see figure 4).

ii. Leaders within the market

Luxury business is synonymous with Germany, the automotive industry is a global leader, its manufacture of cameras and optics are some of the best in the world and some the world’s most expensive watches are handcrafted there. The Germans are surrounded domestically by quality design and craftsmanship. Would their jewellery scene be any different?

The German jewellery scene is not necessarily one of world renown, in fact outside of jewellery enthusiasts, it is not very well known within

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Europe. This may trick an outside observer into believing that this is due to German jewelry being of low quality or that there is so few domestic players within Germany that there is a huge gap in the market. It may not be that simple.

The global consumers’ appetite for jewelry was damped by the recession for very obvious reasons however now it appears to be more voracious than ever. Annual global figures of €148 billion global sales are expected to rise to €250 billion by 2020 predict a glowing future for the jewelry industry1. However this may not be the case for Germany as some predict that it will be a difficult future. Germany, in 2013, recorded a positive performance in the jewelry industry. Due to the economic uncertainty within Germany at this time most people sought monetary security. “Real jewelry benefited from these conditions in 2013, as many consumers perceive these items as the safest investment”2. To an extent there is a great deal of uncertainty for the future of the German jewelry industry.

The nature of competition in Germany is slightly fragmented with many key players at the high end dominating. As an example ‘Christ Juweiler und Uhrmacher’ in 2012 overall led the industry due to benefiting from a competitive advantage in terms of distribution and licensed products within Germany. Thomas Sabo, who specialise in watches as well as jewelry and also cater to men and not only women have 28 official stores across Germany3 and a vast number of official partners all over Germany allowing them a huge distribution range including online stores. Wempe with over 700 hundred employees worldwide and 30 boutiques (7 of which are in Germany4). Wellendorf a jewelry company founded in Pforzheim, the German hub of jewelry (historically), who also produce, amongst other things, wedding jewelry. However they are best known for the ‘rope’ a necklace which is crafted in gold that is as smooth as silk to wear. Draped in history Wellendorf and holds a great deal of sentimental value with German’s who are enthusiastic about jewelry.

d. SWOT Analysis

i. S – Strengths

1 Dauriz, L, Remy, N and Tochtermann,T (2013). A multifaceted future: The jewelry industry in 2020. London: McKinsey & Company. p362 EuroMonitor International. (2014). Jewellery in Germany. Available: http://www.euromonitor.com/jewellery-in-germany/report. Last accessed 4th Nov 2014.

3 Sabo, Thomas. (2014). Shop Finder. Available: http://www.thomassabo.com/EU/de_DE/shopfinder?cgid=shopfinder. Last accessed 7th Nov 2014.

4 Global Blue. (2013). Wempe. Available: http://www.globalblue.com/brands/wempe/. Last accessed 7th Nov 2014.

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As a company, Tejani has prided itself, and herself, on the quality of its products and as previously stated in this report quality is something that is regarded very highly within the German culture. However it is the specific kind of quality, handcrafted, something that has been intricately designed with care and precision and passion. “By combining her keen NYC fashion sense with the designs of local Mumbai Indian craftsman, Urvi offers a bridal jewelry collection with a carefully crafted mix of authentic ethnic heritage and bold modern flair. Every piece of Tejani wedding jewelry is an original”5. Now a valid question may be how is this relevant to the German market? Daniela Osterrieder, a German independent jeweler, when talking about the German jewelry scene said “People are increasingly saturated by the impersonality of mass-produced jewelry – they want something unique and personal and handcrafting ensures that every piece looks that little bit different – it’s that difference that makes it precious”6. With this reassurance it is evident that one of Tejani’s main strengths is her handcrafted approach to her designs and jewelry.

ii. W- Weaknesses

When considering your weaknesses it is obvious that it is an internal issue however it is important to assess your internal weaknesses from an external’s perspective (i.e. a potential competitor within the marketplace) and ask yourself the question, amongst others, what are competitors in the market likely to see as a weakness? A competitor’s perspective of Tejani could perceive that the company’s lack of notoriety in Europe could be a major weakness with many other companies, foreign and domestic, already so well-known with the German marketplace. To an extent this may be true however a more relevant question Tejani should ask itself, especially in the short/medium term of market entry, is what should I avoid? For a company of a small and independent nature like Tejani it is crucial to avoid alienating itself, initially, and attempting to compete against, the already, well established domestic brands like Wellendorf (who also manufacture wedding jewelry) who have been in this market for more than a century. In conclusion Tejani’s major weakness does lie in its lack of notoriety amongst the German market but it can take measures in order to change that.

iii. O-Opportunities

What good opportunities are visible? What interesting trends can be noticed? Are both very relevant and necessary questions that need to be asked and answered when evaluating the external environment. What good opportunities are there? Firstly consider Tejani’s strengths and if

5 Urvi Tejani. (2014). TEJANI: A HERITAGE OF CRAFTSMANSHIP BY DESIGNER URVI TEJANI. Available: http://www.tejani.com/about/. Last accessed 7th Nov 2014.6 Sims, J. (2012). What makes Germany a leader in the international jewellery market?. Available: http://www.globalblue.com/destinations/germany/what-makes-germany-a-leader-in-the-international-jewellery-market/. Last accessed 7th Nov 2014.

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they can apply to any opportunities. As previously stated Tejani’s strength lies in its handcrafted approach to her jewelry and through the realisation of this comes an opportunity. Handcrafted jewelry at an affordable price in a country where they “want something unique and personal” is an opportunity for Tejani to capitalize on what could be a vast market. As well as looking to your strengths when looking for opportunities it is important to also take into account your weaknesses. Can you open up opportunities by eliminating your weaknesses? As people are now “becoming saturated by the impersonality of mass-produced jewelry” and one of Tejani’s weaknesses was its sheer lack of size and notoriety there is a glimmering chance to turn this weakness into an opportunity. The very fact that this company is not well known in Germany gives it an opportunity to breathe new life into the market and revitalize it an added sense of exclusivity at affordable prices.

iv. T- Threats

When examining external threats, much like opportunities, questions need to be answered with the highest degree of honesty as it is best to face any unpleasant truths now rather than later. What obstacles do you face? Initially, the first obstacle would be the entry itself and the difficulties that come with it. Quality is made in Germany not elsewhere, is the traditional German mind-set when speaking of products. The difficulty for Tejani is that although no one disputes the quality of the product, proving itself in the eyes of the consumer may be the most difficult part. Next your focus must turn to your competitors and ask yourself what are they doing? As previously stated in this report, it is evident that the leaders within this industry are the companies which have the best distribution channels, like ‘Christ Juweiler und Uhrmacher’, giving them a competitive advantage. This is a threat which cannot be overlooked, especially in the context of the short/medium term, as initially it’s about survival and Tejani cannot compete on the same level due to its lack of size, it just isn’t conceivable financially and logistically to do so.

e. PESTEL analysis of German jewelry market

i. P – Political

The German Federal government plays a vital role in shaping the German economy sometimes directly and sometimes indirectly through its policies. Three governmental figures that are pivotal and who are responsible for economic policy are the Chancellor, the minister of economics and the minister of finance. These three positions have rarely been held by three people from the same party simultaneously so therefore the policies decided upon usually reflect the interests and desires of two specific government parties. As this report states that Tejani

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should become a limited liability company (GmbH) they’re certain German tax policies that should be taken into account. For example are subject to corporate income tax (Körperschaftssteuer). However before this applies first a business must be established and the German government require the following steps to be completed; the conclusion and notarization of the articles of association, application for entry in the commercial register (Handelsregister) through a German notary, Trade registration, Other preparatory activities during the business establishment phase such as opening a bank account or the conclusion of rental agreements and negotiations and the conclusion of contracts with business partners7. In order to complete this steps one would need to apply for a ‘Schengen Visa’ which would allow you to stay 90 days in every 180 day period unless you are citizen from a few specific non-EU countries (the United States of America is one of those countries) then you do not require this particular type of visa for the same time frame.

ii. E – Economic

When talking in terms of economic growth in Germany there is an immediate connotation of power, success and progress and when you look at recent statistics then you would be correct in saying so. If we go as far back as 2011 and focus specifically on the growth of the luxury goods industry we see a significant increase.” The German luxury market grew by 16% to €12.9 billion in 2011, exceeding the industry’s global growth rate of 9%”8. What is most notable about this statistic is that, as well as all segments of this particular market grew well, watches and jewelry and fashion accessories grew the fastest. In 2013 the German economic growth was 0.1%9, which was also the European average. In terms of interest rate Germany has seen its lowest ever in October 2014 of 0.05%10. This encourages borrowing of money and encourages economic growth which is a reassuring sign for any potential business hoping to open up in Germany. Inflation is also something of note according to the German Federal Statistics Office (Statistisches Bundesamt) the average annual inflation for 2013 was 1.5% and if that is compared to 0.8% for October 2014 we can see a significant drop of 0.7% which is a very encouraging sign as low inflation encourages consumers to buy goods and as we have seen previously in this report Germans have an affinity with luxury goods, particularly jewelry. There is potentially a bright future for Tejani in this context.

7 Germany Trade & Invest. (2014). Visas for Setting up a Business.Available: http://www.gtai.de/GTAI/Navigation/EN/Invest/Investment-guide/Coming-to-germany/visas-for-setting-up-business.html. Last accessed 9th Nov 2014.8 Berger, Roland. (2012). ROLAND BERGER STUDY ON THE LUXURY GOODS MARKET: GERMANY HAS THE BIGGEST POTENTIAL IN EUROPE. Available: http://www.rolandberger.com/press_releases/9 Destatis. (2014). Key Figures. Available: https://www.destatis.de/EN/Homepage.html. Last accessed 7th Nov 2014.10 No author. (2014). Germany Interest Rate. Available: http://www.tradingeconomics.com/germany/interest-rate. Last accessed 7th Nov 2014.

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iii. S – Social

Germany has its own culture that they are fiercely proud of and it is extremely different to many other western countries which may be one of the reasons why some foreign companies find it hard to integrate and become successful in Germany. In the particular case of Tejani it may be a worthwhile note knowing that the Germans have a strong affection for products of quality. It’s the most logical choice and they are logical people. For years German products have been synonymous with quality and traditionally they have stayed domestic, when they can, for buying their products the car industry is a glittering example of this. This could be a serious barrier for entry initially as good quality is only based on reputation and that comes through proving yourself. Although no one disputes the quality of Tejani it has no reputation amongst German consumers. This may be an initial hindrance to begin with, but that is only an assumption. Cultural aspects are a major part of Social analysis however there are also other things to take into account. Germany has an aging population with the number of births expected to decrease rapidly after 2020 even though already “the birth rate in Germany has been among the lowest in the world for several decades”11. Why would this be relevant? An aging population means an aging workforce and an aging workforce means and that means there is a far higher labour cost and going on the assumption that Tejani is looking to stay in Germany for the foreseeable future this is eventually something to take into account. However there is a silver lining to this, albeit a very small and brief one, as “there is a significant trend in consumer opinion toward luxury goods” and “the trend is particularly evident among the relatively affluent group customer group of 51-60 year olds”12. Very brief and small indeed. However it gives a slight insight into a potential small demographic, bearing in mind that Tejani is wedding jewelry.

iv. T – Technological

Research and development (R&D) is the cornerstone for any society and Germany and they realize this. The rate of technological change (TC) is immensely important especially when it is teamed with other factors of this nature as it can determine a business’s barriers of entry and technological shifts can affect cost and quality. It is well documented that Germany is one of the world’s leaders when it comes to engineering and subjects of that ilk however it is not really relevant to the barriers that

11 Potzsch, Olga (2013). What affect does childbearing postponement have on cohort fertility in western and eastern Germany?. Statistisches Bundesamt: Wirtschaft und Statistik. p87

12 Berger, Roland. (2012). ROLAND BERGER STUDY ON THE LUXURY GOODS MARKET: GERMANY HAS THE BIGGEST POTENTIAL IN EUROPE. Available: http://www.rolandberger.com/press_releases/512-

press_archive2012_sc_content/Roland_Berger_study_on_luxury_goods_market.html. Last accessed 9th Nov 2014.

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Tejani could potentially face when trying to break into this market. As previously stated in this report the leading companies within this industry are those that gained a competitive advantage through, in particular, distribution channels and licensed products. Now Tejani has its own online store in the USA which will no doubt attribute to its success in the States however what the leading companies in Germany show us is that distribution is essential. It is very similar to a network effect where a good service has value based on the number of existing customers, much like Thomas Sabo and the other leading German companies. Technological aspects could prove the most difficult thus far.

v. E – Environmental

Fortunately in this industry (jewelry industry) environmental factors are not really of as significant importance as political or legal factors potentially. However there are some potentially serious ecological and sustainability questions that may be worth considering from Tejani’s perspective. How sustainable would my business be in Germany? Can I sustain the same products? So it is ecological in the sense that it is more about natural resource management as Tejani prides itself on is “high couture” jewelry that was attainable for most. In Germany the price of 1 gram of gold €30.21 and silver is €0.41 compare that with American prices (assuming that is where the company sources its gold and silver from) gold is $30.20 (€ 24.32) and silver is $0.41 (€ 0.33)13 there is a significant cost difference when you apply this to quantities of jewelry pieces required to be manufactured. The question for Tejani is not only of natural resource management but of financial management and cost efficiency.

vi. L – Legal

When entering any new country to begin a business you must be aware of laws, rules and regulations that will apply to you and have to be adhered to. For example there are specific laws regarding the distribution channels in Germany. “Foreign suppliers are not subject to specific regulations with regard to their distribution channel. However, if they choose not to rely on direct distribution but on indirect selling methods, several rules which also apply to domestic undertakings have to be considered”14. ‘Indirect selling methods’ refers to the sale of goods through independent traders (a potential long term idea for Tejani in Germany) which includes importers, wholesalers and retailers also the sale of goods through sales agents like commercial representatives, commission agents and exclusive representatives. In the short/medium term when entering the German market for any new foreign business it is

13 No author. (2014). Gold and Silver Prices From Germany. Available: http://www.24hgold.com/english/gold_silver_prices_charts.aspx?money=EUR&country=Germany. Last accessed 8th Nov 2014.14 Rudo, Joachim. (2013). German Business Law. Available: http://www.germanbusinesslaw.de/. Last accessed 7th Nov 2014.

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always an option, in terms of distribution, to go through a domestic wholesaler or retailer (Bijou Brigitte) in order to gain notoriety and establish a presence within the market. If this is to be Tejani’s intial entry into the German market there is certain laws to regard. Foreign suppliers (Tejani) have to consider both European Commission (EC) and German antitrust laws. This essentially competition law which aims to halt companies from abusing their market power, it strives to maintain market competition and halt anti-competitive conduct by companies. Initially will this apply to Tejani? No it will not. It is more of a reassurance that the German market place has measures in place to allow market competition which is ultimately what Tejani would like to do. Challenge the market.

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f. BUSINESS MODEL

i. Customers segment

First of all, Uvri Tejani targets the brides who are price sensitive. Her clients are women who are looking for good looking jewelry, but who cannot afford high jewelry pieces. Her collection fits perfectly brides and bridesmaids but it can be worn for all kind of events as well. There is no specific age or fashion styles concerned because she proposes a large range of products which can be appealing by all women.

ii. Offer

Tejani offers affordable jewelry with high design and quality. Her products look very close to high jewelry and last longer than most of the similar offer in the market. Moreover, she offers the possibility to customize the pieces by changing the material used and so the style. Not only has she offered high couture jewelry and accessories at affordable price but also alternatives.

iii. Channels

As defined in the Marketing Mix, the first communication channel will be the Internet and social networks. Then, taking part of events will allow her to be known by professionals of the market and the press. She can also create partnerships with bloggers or cooperate with others brands, especially fashion designers. This method will allow her to show her brand to the public on people like fashion bloggers and models. Finally, it is necessary to create and distribute printed documentation as leaflets, look-books and flyers.

The supply channels will first include the internet through her website www.tejani.de with sales and after sales service. For Germany, the return period should be extended and an online platform and a special email address must be created. For the customers’ service management, it is important that the person in charge speaks German. This is why, being represented in Germany by a showroom or a freelance representative seems essential. Otherwise, they will also include the various retailers, which sell her products. Thus, the stores will take full care of the sales and the after sales services. These stores can directly communicate with the boutique in NYC, but one more time, the process would be facilitated by the representation of the brand in Germany.

As a result, the partnership with a showroom representative or an independent representative in Germany appears as mandatory. The representative can handle the public relations in Germany, the sales to the retailers and the after sales services. The factory in India could directly

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send the products to the showroom, which then would redistribute the products to the retailers and to the clients who ordered online. This would facilitate the processes and make them more efficient.

iv. Customer Relationship

As the designer cannot be present in Germany to sell her products and to handle face-to-face sales, she need others means to create a relationship with her customers. Her website will be the main platform to communicate with her customers in Germany. Thus, the website needs to be clear, easy to use and open to exchanging emails. Moreover, the social network needs to be strong and friendly. The personification of the designer on different internet channels creates emotional attachment and affection to her and her products.

Urvi Tejani can also come to Germany to promote the collections. For example, she can create special events in the retailers’ stores to launch her brand and to meet the customers of the store and then create a real relationship.

To reinforce relationship and fidelity, she can create special offers with discounts, send newsletters, and launch fidelity cards with special benefits.

Finally, to affect the German customers and to reinforce their commitment toward the brand and its values, Urvi Tejani can support a charity organization. For instance one which will offer support to a women’s cause. The integration of charitable values onto her image can be helpful to make the customers loyal.

v. Revenue streams

The incomes of the company will be earned by customers’ orders. She will benefit of 20% of her sales. The private individuals who order online are customers who pay via the internet thanks to a secure platform. To respond properly to the orders, the company requires sufficient stock of goods. Thus, the owner has to invest in the manufacturing of the products. I another hand, the others customers are the retailers. When they make an order, they will most likely advance 30% of the total amount. However, it is possible to bargain and try to receive more. Then, they will pay the rest of the amount within seven days of the receipt of the order. However, each retailer tends to apply its own payment conditions, this depends on the size of them and the bargaining power they have. It can be difficult for Tejani not to yield to those conditions. As a result, she also have to advance money for the production which will be launch after all final orders received. Besides, she can find a payment agreement with her producer in India while having a relationship of trust and fidelity.

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vi. Key resources

Urvi Tejani, through her representative and her website in Germany, will transfer her core values to Europe. As well as she does in the USA, she will offer to brides a range of styled jewelry at affordable prices. Her Indian heritage and her New York fashion sense have to be also represented in any market she wants to reach. Her 10 years’ experience in fulfilling brides’ dream make her an expert.

Her representation in Germany by professionals of the industry and the market would give her all the resources required to become profitable in the German market as well. This includes the knowledge of the market, the regulations, the customers, the press and finally the connection with stores and department stores.

vii. Key activities

The keys activities of Urvi Tejani are the design of the collections of jewelry by herself and their sales. And the activity which will be added specifically to the German market is the virtual relationship with the customers via the internet.

viii. Key partners

The most important partner is the representative of the brand in terms of sales and public relations. Then, the pro quo relationships with bloggers and with fashion designers can become a strong partnership to develop the brand image. Last, maintaining solid and perennial relationship with the manufacturer will create, in long term, costs advantages.

ix. Cost Structure:

Starting the business in Germany incurs new costs. The main cost is the monthly remuneration of the representative which is a fix cost. The website improvements and updates require investment. Additionally, the production of the collections devoted to the German market creates variable costs in accordance to the number of orders. And then, the promotion of the brand will create variable costs for the punctual events Tejani will take part and the printing of paper documentation. Finally, shipping costs have to be anticipated.

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g. MARKETING MIX

The analysis of the marketing mix tool will help us to understand how to position Tejani and its offer into the German market. Moreover, it will allow us to start the market planning and not to forget anything to develop the marketing of the products. The marketing Mix is made of 4Ps which are: Product, Price, Place and Promotion. In this case, it seems important to add a fifth P which is People.

i. Product

The range of products that Tejani offers in her store in New York can be simply brought to Germany. The brand already has a well-defined image and its own style which must be retained to create a strong brand image. Moreover Urvi Tejani delights various type of women in the US market with her jewelry; she does not attract a specific type of customers among the bridal sector. The USA and Germany are among the Western countries with a similar culture and with a mix of people. Those countries are not different enough to create a specific collection for the German market.

Otherwise, one of her special feature is her custom finishes. She offers a real buying experience into her store with professional consultancy and the customers have the ability to custom the jewels. This would be particularly difficult to implement abroad via brand representatives or online. As her targeted customers are women, and more particularly the one on the point of getting married, they look for the perfect product which suits them the best. Thus, convincing to buy this kind of products without seeing them and trying them seems impossible. This can only be implemented while having a store and a special area to welcome the customers and to advise them. But it is too early to conceive to open a Tejani store in Germany yet. However, it is not excluded that she offers via her website the option of customizing the product as she does in New York.

ii. Price

As the price is already set in the US market, it cannot be way different in Europe. The coherence of the brand has to be taken into account before adapting the offer from a country to another.The prices in the shop online in US Dollars have to be the same as in Euro with the recent change rate. Only the delivery costs can differ. However, in stores, prices can differ from the original prices in the US because of several factors. It can be possible to lower or increase prices according to the change rates, to the delivery costs from manufacturing to the store, to different fix costs (in this case the prices would be lower in part because there would not be the rent of the store) and the percentage of profit set by the retailers.

iii. Place

First, Urvi Tejani has to update her website in order to allow German natives to buy online. This means that the website must be translated into German, the prices changed into Euro and the delivery costs recalculated. This would be the first step before entering the German market because nowadays the website page is the reference of a brand. Not only the website is a point-of-sale but also the first step to

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get to be known. The products can also be sold via online shops which are specialized in jewelry like www.juwedi.de, www.shop.123juwelier.de or www.schmuckland.de.

Therefore, it is important for the customers to be able to see the products for real before buying it. As a result, Tejani jewelries must be sold in stores. The option of opening a store in Germany as in New-York is not considered yet according to the huge financial investment and the need to create a renowned name. In this way, Tejani products can be sold in different places. Multi-brands stores and department stores are very attractive places like Galeria Kaufhof and Karstadt. It is also common for jewelry brands to be sold in multi-brands jewelry store like Juwelier Bektas. It can be also very attractive to be sold in multi-bridal brands stores or in designer stores (Jasmine bridal, Justin Alexander Bridal, The White Dress Company München for instance).

Finally it can also be considered to be sold in cruise and airlines retailers as well as having a display in a hotel.

iv. Promotion

The first step to promote the brand in the German market is to be known on the internet. Right after the creation of the Tejani’s website in German, it is important to be present on social networks. Today, being part of it is mandatory as it is becoming a reference value for customers and retailers. It is not only important to create an account in the most used social network tools, but also being published on others. For instance, the collaboration with bloggers can create a fast information transmission and thus promote the brand without investing in expensive advertisements.

Then, the brand needs to be known by the professionals of the industry as buyers and retailers. In that sense, Urvi Tejani should take part of the various events, market sales and trade shows or at least being represented. A lot of them exist all over Europe which can be specialized in fashion, in jewelry or in bridal (for example, the Mode Heim Handwerk, the bridal fashion week). The participation in those kinds of exhibitions will allow her to sell her products, to be renowned by her competitors, to know better the recent market trends and her competitors and to be seen by the specialized journalists. Moreover, the collaboration with bridal designers can be a great opportunity. Generally it is just about leaning products in exchange of promotion during fashion shows. Thus, the brand will be seen on models wearing suitable outfits by customers, buyers and fashion editors.

Also, the brand requires paper materials as leaflets, collection books, and press books to distribute to the German press, the buyers and potentials new customers. Even if nowadays, it is proved that spending time on creating a strong image on social networks is more efficient than buying a page of advertisement in a famous magazine, it is still very important to appear in renowned medias. The products must be featured in editorials in online and printed press in Germany. To do so, Urvi Tejani will have to get in touch with the photo stylists and the accessories editors to inform them about the company and its products via press releases and also to lend them some jewels to be shot.

Specials offers can be made on her website like discounts for the first purchase or free-delivery. It could be a good way to communicate by creating a contest on social network. For instance, it could be a photo contest on Instagram of “the best

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couple” and the picture with the largest amount of “like” will win a jewel among a selection.

v. People

As opening a store in Germany is not considered yet, there will not be anyone directly employed by Tejani in Germany. This means that someone from Tejani in New York should be the referent of the German retailers in order to spread the proper image of the brand and also to drive the way of selling the products. This person can be based in New York and can be the commercial person. However, Tejani can call on a representative person or showroom in Germany. This organization will be dealing with the sales of the collections to the German market but it can also be to the European market. Then, the representative will be the first contact in the designed area and can also deal with the press relations. This option is often used by small companies which intend to reach a new market where the company does not have full knowledge and network. It can also be cost effective, because it avoids to hire new employees, to rent office space and to deal with trans-Atlantic shipments and travels.

h. Value Chain (Porter)

How does Tejani create Value and sets itself apart from the competition?

We decided to put numbers besides the different activities according to their importance for Tejani from 1 (very important, cannot be outsourced) to 3 (less important, don’t bring any direct value to the company).

i. SUPPORT ACTIVITIES

Organization and Human Resources (3): those activities are essential to run the company but don’t directly affect the customers or the company’s activityTechnology (2):Tejani must be aware of all the newest technologies and materials to get the best products at the best price and therefore offer the brides the promised quality jewelry.Purchasing (2):the choice of the suppliers is crucial to be sure to offer the best materials at the best price to the customers.

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ii. PRIMARY ACTIVITIES:Inbound Logistics (2): one of the key factors to success for the company, this

activity creates value for the customers who are looking for cheap and good quality products

Operations and manufacturing assembly (2): brings value to the customers (delivery time for instance), Tejani can deliver any country

Outbound Logistics (1): Tejani provides luxury packaging when shipping to customers to match the quality of their products. It creates values both to the customers who are looking for both luxury products and services as well as for the company who sets itself from its competitors.

Marketing and Sales (1): having only a shop in USA and a presence online, marketing and sales are essential for Tejani to be successful (press, awards, blog…)

Service (1): Customer service is essential and cannot be outsourced. Shipping time and policy of returns are clearly an activity that enables Tejani to differentiate their offering and it is an essential key factor for customers’ satisfaction.

i. Critical Success Factors

Pricing and costing: Tejani is the first jewelry company for brides to offer high quality products for a reasonable price. To be successful in

luxury goods, Tejani must carry on working on costings.

Customer Service: customers can rely on Tejani consultants to help them in their choice, they can contact Tejani to make suggestions for their special day. Therefore, trust between Tejani and its customers is crucial. Customers can also schedule an appointment on the “Trunk shows” to meet in person their consultant. We can see the close relationship build with customers who do not hesitate to send

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photos and testimonys to Tejani to talk about their wedding day and what Tejani has done for them.

Communication as it is present in USA and only online for the other countries, Tejani must count on strong communication to be known by brides worldwide. A press release on wedding magazines and awards such as “Wedding Wire choice of the bride’s award” gives the company a strong and trusty identity. Going to meet their customers during the trunk shows also enables Tejani to be deeply present in people’s mind.Uniqueness and adaptability is even though affordable, Tejani’s products remain luxury for brides, and therefore your products must be different from jewels that brides can find on the market. Enabling customers to personalize their jewels and choose the size that will suit them make the jewel even more precious and luxurious.

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Financial part

This part is focused on the financial strakes of that project. You will have an idea of the viability of the project within a detail view, and a logical approach.

Survey about Weddings

Januar

y

Febru

ary

Mar

chApril

May Ju

niJu

ly

August

Septem

ber

October

November

Decem

ber0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

In order to establish a sale distribution, we needed to learn more about the customers’ habits. Well, you can find here the answers according to the question “Witch month do you feel better to get married?”

Setting up of a sale distribution

First Analyze This method consist in, an evaluation of potential clients, based on the total population in Germany. It includes all possible sales through the Internet website.Germany gets the highest rate of e-customer in the European area (average of 11%)The penetration rate chosen means we want 1 sale/1000 visits on the website.

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Number of sales (Method 1)Month Jan Feb Mar Apr MayRepartition 0.0% 0.0% 1.7% 10.3% 22.4%Sales 0 0 198 1191 2582

Month Results Rate

Which month do you feel better to mary ?

Second Analyze

This method consist in, an evaluation of potential clients, based on the number of weddings in Germany. It includes all possible sales through the Internet website.Germany is impacted by a decreasing number of unions.The penetration rate chosen means we want 1 sale/1000 visits on the website.

Calculation of potential customers (M2)VariablePopulation of inhabitantsPenetration rateResult : total 1

Penetration rateResult : total 2

Jan Mar

May Ju

lSe

pNov

0

500

1000

1500

2000

2500

3000

Global Analyze

If you now compare the two distributions, of probable sales, you can see too big differences. Indeed, here are presented only theories facts. Let’s try to set it up with other parameters like:

Tejani can sell with both website and store, People do not buy that stuff 2 days before, It is a new product in Germany It could be expensive for majority of people

The annual number of sales calculated with the second method is the objective after three years of activities

Final distribution of

Holidays Festivities/Gifts

Number of sales (Final Distribution)Month Jan Feb

Repartition0,0

%0,0

Sales 20

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Number of sales (Method 1)Month Jan Feb Mar Apr MayRepartition 0.0% 0.0% 1.7% 10.3% 22.4%Sales 0 0 198 1191 2582

Number of sales (Method 1)Month Jan Feb Mar Apr MayRepartition 0.0% 0.0% 1.7% 10.3% 22.4%Sales 0 0 198 1191 2582

Cash flow (1st year of activity)

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Cash flow (2nd year of activity)

32

Cash flow (3rd year of activity)

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Details of calculation Calculation have been established with:

Growth rate : 20%/year Average bundle : 630€ Average margin : 20% of sales

Capital deployed of 25.000 € is the legal minimum to create a GmbH.

All bills amount are based on average for similar shops. (INSEE.fr)

Furniture correspond to basic stuff used during activity (pen, paper sheets …)

Profitability analyze

turnoverFixed costVariable costMVCT(mvc)Rentability

Year 2turnover 108 360,00 €Fixed cost 23 170,28 €Variable cost 86 688,00 €MVC 21 672,00 €T(mvc) 0,2Rentability 115 851,40 €

Year 3turnover 130 032,00 €Fixed cost 23 170,28 €Variable cost 104 025,60 €MVC 26 006,40 €T(mvc) 0,2Rentability 115 851,40 €

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Recommendations

Keep in mind the long term objective

Our analysis enables us to say that Tejani cannot open a store as a first step to enter the german market. Indeed, although well known in New York and more generally in USA, Tejani lack of fame worldwide. The first thing the company should work on is communication to build and strengthen its image and position in potential future customers. Developing a strong and trustworthy image will help Tejani to implement itself in customers’ mind before settling concretely on the market. The main objective is to create need and desire for the jewels. Without this growing-love for the brand we want to create, Tejani is likely to fail as shown precisely in our financial analysis that you will find in our report. This is why we would rather recommend to build a strong communication plan first.

Drive and limit risks

German potential customers for Tejani don’t know the brand yet. Even though german market offers great opportunities for Tejani, settle abroad can be dangerous for a company if not done in an efficient way. Our recommendation is to go step by step to be successful. To limit risks, our strategy focuses on integrating the market slowly but surely to gain legitimacy, factor of success.

Define precise places and dates to communicate

We recommend a very detailed strategy both online and offline. A retro planning will be strictly followed to be at the right time at the right moment.To start existing offline, Tejani should first gain an online fame and community. This is the first place we think the company should be. Step by step, Tejani will go offline and start a communication campaign. Invading the city is the second step. Then, after implementing the brand’s image and products in German’s mind. This alone will encourage their curiosity and lead to purchases in the first place products will be sold in.

Build a strong network

Coming from United States and having no networks in Germany at the moment, Tejani must hire trustworthy representatives to represent the brand abroad. Those new employees, specialist in the jewelry market in Germany will guide them into taking appropriate decision and will bring them the contacts needed to start their activity. As service and relationship with customers is a priority for Tejani, representatives will meet potential retailers and customers in person to enable proximity, trust and therefore viable and durable success in the future.

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ConclusionTo briefly sum up and to answer the simple, yet extremely pertinent,

question of how to implement this strategy we must first think pay particular attention to the time scale in which this strategy would function. Initially, and obviously, we need to look at the short term and the immediacy of the situation (i.e. survival). We propose that an online store would be a high recommendable solution due to its simplicity with regards to reaching customers and clients also the idea of selling jewellery through selected retailers or ‘official partners’ to merely plant the seed of Tejani jewellery in the minds of the German consumer. The long term or vision is based purely on optimism and it involves Tejani being a household name within the German jewellery market. However before we can afford to be optimistic we must be realistic and focus on, after the short term, the medium term, again obvious. With regards to the medium term we are basing our recommendation solely on the success of the short term strategy which we deem to be well thought out and with a high chance of success. So, ideally, we would like to see Tejani have her own independent retail store which adds to the exclusivity of the brand and furthering her image and reputation. From an optimistic yet quietly confident realistic point of view we believe Tejani can achieve great success within this market.

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Sources

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Michael, E Porter (2008). The five competitive forces that shape strategy. New York: Harvard Business Review. p80-81.

Minton, Gabe. (2010). Mortgage Banking. Using a SWOT Analysis . 71 (3), p80-81.

Potzsch, Olga (2013). What affect does childbearing postponement have on cohort fertility in western and eastern Germany? Statistisches Bundesamt: Wirtschaft und Statistik. p87Yüksel, Ihsan. (2012). Developing a Multi-Criteria Decision Making Model for PESTEL Analysis. International Journal of Business and Management. 7 (15), p52-66.

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