PKOLINO BUSINESS PLAN ANALYSIS: Case Study

PKOLINO BUSINESS PLAN

General View Of The Business Plan

A great deal of research has been done on toy and furmiture industry as a whole which is a good part of any business plan. However most of the research is general information and not any information that suits best what P’kolino is trying to bring to the market. There are a lot of assumptions made in regard to growth and income without real life figures to back up, the same also applies to the figures in the marketing communications Strategy table. Another critical information that might have been usefull in the business plan would have been estimated financial statements, not just sales ,advertisement and salary estimates.Estimates of financial statements would have painted a better picture as well as offer a better summary of the information.

MERITS

Market: There is a ready market in the United state of  over 30 million children under the age of 8 years also the 4 million children born year each add to this pool of potential customers. To add to that, the toy industry is estimated to be atleast $1.2 billion annually.Further more, the furniture industry is a $24 billion market yearly.

The idea: The idea of turning a furniture into a toy is a great idea.It means that Pkolino is tapping into two industries at the same time which will make the products more attractive to customers and easier to sale in both toy stores and furniture stores.

The team:  With two Babson MBA graduants at the helm of the company and Rhodes Island School of design which is ranked  number one by US News as the best graduate industrial design program you are in safe hands. The experience of the founders also brings a lot of confidence.

DEMERITS

General information: The information given about the market is too general without any specifics especially in regard to Pkolino as a brand. Each product will be received differently thus the general information is not necessarily useful especially when over concentrated on.

Stiff competition: As much as the both furniture and toy industries are worth billions annually, the competition is stiff both internally and externally. It will be hard for Pkolino to compete with multi nationals which enjoy economies of scale and have already established a customer base such as Lay Z Boy and  Ashley Furniture.

Nature of Pkolino toys: As stated, 39% of all toy sales are technology related products such as video games which Pkolino is not part of. To add to that the idea of Pkolino is that it targets a particular age set of  children which reduces the chances of maintaining long term customers as the parents will stop buying Pkolino products once thee children surpass the age limit.

Highly seasonal market: With over 70% of all sales being made during holidays which is a very short period for a business to maximize revenues. This is especially the case with one trying to enter the market.

INVESTMENT DECISION

The idea of a furniture/toy that is flexible is refreshing.  However the information given is too general and unclear for investment purposes. The same applies to the marketing strategies and growth/revenue estimation. The pricing is also high as compared to the market leaders. With all this in mind, there are too many uncertainities to make a sound financial investment.

Works Cited

Honig, B and T karlson. "Instituitional forces and written business plan." journal of management 30.1 (204): 29-48. <www.researchgate.net/profile/Benson_Honig/publication/228264253.in>.