Business Plan: Arcade VR Lounge
The founding of Arcade VR Lounge as a specialized virtual reality (VR) service company is the culmination of several months of research on the technological and demographical trends in individual and corporate consumer markets. The results of the studies are integrated with years of experience of the founder as a technology enthusiast, avid gamer, and personal commitment to entrepreneurial success. The initial goal of the company is to offer world class virtual reality (VR) experience for gamers using high-end hardware and interactive VR multimedia software. In future, Arcade VR Lounge will expand its operations to target corporate and individual customers with team building, exercising, training, 3-D movies viewing, and simulation. The company will seek to redefine the boundaries of VR gaming while also revolutionizing exercising, meditation, employee training, process simulation, and corporate team building programs. Arcade VR Lounge will continually explore and capitalize on new and immediate opportunities in this fast growing industry with the view of taking the company to the next level and expanding our operations organically.
To be launched in July 2020 in New York City, Arcade VR Lounge will rely on the projected growth of VR popularity among individual and corporate customers. In market characterized by popularity and low uptake due to technological availability, overhead costs, and awareness constraints, the business stands to bridge this price and service gap and utilize the opportunity to expand into new markets and service lines. The large population of technological savvy individuals in New York City and other cities across the globe, especially millennials, will provide a large market for the company’s services (Frey n.pag). Combined with the large number of corporate customers in the city, the growing number of tech savvy individuals will create opportunities for Arcade VR Lounge to grow and expand to new locations. Additionally, the business will offer complementary services and assets such as drinks and branded items including clothes and caps to grow its brand and bottom line. These growth and development strategies will be critical in helping the business cut a niche for itself in a market that is relatively young and with few big brands or competitors.
This plan exclusively focuses on the VR gaming services that Arcade VR Lounge will provide in New York City. Consequently, this plan will highlight the company’s three-year growth objectives, goals and strategies. The company will seek to break-even within the first year and grow its customer base by 30% and 50% in the first and second year, respectively. The company will also seek to retain 75% and 90% of its customers for the first and second year, respectively. To achieve these objectives, Arcade VR Lounge will adopt a price-product marketing mix strategy aimed at bringing VR gaming and other services closer to the people through affordability and physical proximity. The company will innovative marketing strategies including use of social media to generate sales and attract and retain customers while also growing the bottom line.
To analyze Arcade VR Lounge’s current situation, this plan will focus on key metrics including the company’s internal and external environment with the view of gauging its competitiveness. Through SWOT analysis, this plan with assess the company’s strengths, weaknesses, opportunities and threats even as it seeks to break even and grow organically.
- Company analysis
Arcade VR Lounge is a specialized virtual reality (VR) service company that will be located in New York City. With over 8 million people, New York City is at the epicenter of American and global culture, tourism, fashion, commerce, and art. The city is a technology hub. These factors combine to make the city an ideal location for a VR service company like Arcade VR Lounge. The company will be located along 200 Broadway. The company will be run by a manager and three full time employees. Arcade VR Lounge will initially focus on VR gaming and later expand to other services such as meditation, employee training, process simulation, exercising, and team building. The company will also offer complementary services including branded products.
Company Objectives and Mission Statement
To ensure that the company is grounded on a firm foundational values and principles and its operations are fashioned around a blueprint, the founder of Arcade VR Lounge has developed general objectives and a mission statement. The founder also developed specific marketing objectives aimed at creating brand awareness and spurring growth and expansion of customer base, market share, operations, and profit margins.
Arcade VR Lounge will be guided by the following mission statement: “To provide a more immersive social experience for virtual reality enthusiasts.”
To implement the company’s three-year growth and development plan, the following general objectives will guide the operations of Arcade VR Lounge:
- To continually provide an environment where individual and corporate virtual reality enthusiasts can socialize and relish their boundless passion for VR, individually and collectively. This will be the company’s foremost priority.
- To adopt a three-step growth strategy that will see Arcade VR Lounge break even in the first year of operation and maintain an upward growth trajectory in all key metrics beyond three years.
- To expand our customer and employee bases while also exploring and adopting new technologies and business frontiers with the view of creating new business niches and cementing our current market shares.
- Develop highly effective and strategic communication and marketing strategies that can sustain business growth and development by exploiting new and untapped and existing market niches and segments.
Within three years, Arcade VR Lounge will become one of the most recognizable brands within the VR gaming industry in New York City. The founder hopes that through strategic marketing, communication, adoption of high-end VR gaming technologies, and excellent customer care services will help the company achieve this goal. Towards this end, Arcade VR Lounge will further seek to:
- Invest in research and development to assess the suitability of new and emerging VR technologies to its current and future mainstream and niche markets. Additionally, research and development will help the company fine-tuning its operations and strategies and align them with existing market trends with the view of gaining competitive advantage.
- Implement targeted brand awareness and product promotion campaigns with the view of increasing brand visibility, sales volumes, and customer base by solidifying strategic relationships with our customers.
- Hire skilled employees who will developed to align their skills and competencies with our products and services.
- Expand operations to new strategic locations across New York City.
- Customer market analysis
New York City, including its metropolitan area, is one of the most densely populated areas per square mile in the United States. The city sits on a cultural, social, technological, political, and economic confluence making it suitable for a technology-based company that targets technologically savvy customers who are passionate about virtual reality gaming and associated services. In particular, the city is home a growing population of millennials, a market segment whose numbers has grown exponentially over the years. Future projections show that the number of millennials will continue on an upward trajectory for years to come (Frey n.pag). Millennials are the largest consumers of technology-based products and services.
In addition, New York City is a social hub with many people seeking new adventurous ways to socialize and enjoy their holidays, evenings, and weekends. VR gaming is a prime socialization activity that individuals and groups can enjoy. It is a culturally neutral fun activity that can be enjoyed by individuals from different cultures. New York City is a cultural hub. Arcade VR Lounge will seek to tap into such cultural diversity to grow its operations.
Arcade VR Lounge has a plan to expand into other services especially those considered contemporary and revolutionary within VR gaming, corporate management, and individual social circles. Exercising, employee training, process simulation, meditation, and team building using VR technology are at their nascent stages in terms of exploration and implementation in the mainstream market. Arcade VR Lounge will seek to push these emerging services into the mainstream market. This strategic move is buoyed by the large population or individual and corporate customers in New York City who are sourcing for unique options for provision of such essential services. Overall, the VR gaming industry is projected to grow tremendously over the coming years as more individuals and corporate entities understand and embrace its huge potential in transforming human lives and company operations. Therefore, Arcade VR Lounge will seek to tap into this projected increased uptake of the technology to grow and develop.
- Competitive market analysis
Virtual reality gaming and associated services is a relatively new concept in many markets including New York City where Arcade VR Lounge while launch its operations. Therefore, there are few established competitors in the market with strong brand presence. Most of the competitors in the target market are small entities with single outlets. The market is shared within the niche markets where such businesses operates. Therefore, proximity to service provider and quality of services are the primary determinants of market shares. Based on personal experiences of the founder of Arcade VR Lounge and market research, customers tend to be loyal. Customer referrals is also common in the industry especially with quality service provision. Customers tend to come with friends and family to enjoy VR gaming services at their preferred location, especially those located in areas frequented by visitors such as malls.
- External market environment
The dominant players in VR’s external environment include customers, competitors, manufacturers, the public, marketing intermediaries, technology, economic environment, and legal factors. Customers and the public, as some of the leading micro external factors, will play a vital role in the profitability of the business. The whole concept of Arcade VR Lounge including its business model is built around meeting the needs of targeted customers. New York City, and the global markets by extension, present a huge potential market for VR gaming because of the growing population of tech savvy individuals and need for incorporating such technologies into daily operations of companies. And since it is an emerging market, there are no well-established competitors or big brands that Arcade VR Lounge will have to contend with as it seeks to establish it operations.
On the other hand, marketing intermediaries will affect the company’s marketing and brand awareness campaigns. Such factors will play a vital role in shaping the company’s performance when it comes to customer base growth and profit margins. Competitors will affect the company’s pricing strategies, sales volumes, and overall growth in operations and profit. Legal, economic and technology factors will also have similar effect. A conducive business environment is determined, to a great extent, by legal, economic, and technological factors. Despite being a relatively young industry, VR gaming has seen a major shift in technology that supports the industry. New technologies, hardware and software, are continually being released into the market by the manufacturers. The market prices set by the manufacturers for these technology has played a vital role in shaping the growth of the industry. As a company, Arcade VR Lounge’s prices and growth will be determined, in part, by the prices set by the manufacturers for the technologies. The company will also seek to implement data safety and security policies that are in line with legal requirements and policies set by the government to avoid costly conflicts and litigations while also building a reputation founded on trust and data safety.
- SWOT analysis
One of the strengths of Arcade VR Lounge is the vast experience and knowledge of the founder who are avid VR gamers and experienced tech professional. This solid foundation will give the company a solid foundation to overcome some of the challenges involved with launching a business operation including lack of expertise. Additionally, Arcade VR Lounge boasts of a reliable source of startup funds in the form of personal savings and contribution by the founder. Therefore, the company will open its doors with no significant pressure to refund loans. Moreover, the founder has brought on board a manager with four years of experience in managing gaming businesses and a further three years of human resource management and supervision experience.
Despite these strengths, Arcade VR Lounge will have to contend with high prices and unavailability of required technologies to successfully launch operations. The available VR technologies are relatively expensive and not well distributed in the market owing to the nascent nature of the industry. Another weakness that Arcade VR Lounge will face is the financial constraints when it comes to expanding the business to accommodate customer populations. Establishing a large operation that can accommodate more customers and new product lines will require additional space and funds for rent and purchase of new technologies.
One of the primary opportunities that Arcade VR Lounge will seek to exploit is the versatility and flexibility of VR technology. The technology can be applied in a wide range of services (European Commission 1, 4). These areas include therapy, exercising, meditation, team building, and training. These opportunities open unique investment opportunities for the company including strategic partnerships with other companies and establishments such as healthcare providers. VR technology is also new and has low uptake. Industry projections however show that the uptake of the technology and industry value is bound to grow exponentially in the future. These predictions offer opportunity for Arcade VR Lounge to grow its customer base and expand into new markets to take advantage of this projected future industry growth.
Since there are few barriers to entry into the market, Arcade VR Lounge will face threat of new entrants which may affect the company’s market share and overall profitability. Threats will also manifest in the form of legislations which may change overtime. VR is an emerging industry with few current regulations. With increased growth, different governments, authorities, and even the general public will raise various issues that will shape legislations. VR is not a mature technology (European Commission 5; Teng et al 1). Therefore, Arcade VR Lounge will face significant challenges in uptake by the mass market.
Arcade VR Lounge will employ a marketing strategy evaluation that will focus on customer satisfaction, brand awareness, increase in sales, and overall business growth. The following areas will form the company’s marketing strategy:
- Target Market: Arcade VR Lounge, in the first three years, will target individual gamers especially those seeking to play VR games as a fun and social activity and competitors. This market will comprise of millennials, families, and groups. All demographics will be targeted.
- Product: Arcade VR Lounge will primarily offer VR gaming services in the first three years and expand the service portfolio to include exercising, training, meditating, process simulation, and team building exercises from year four and beyond. The company will also offer additional services and products such as branded items including caps and clothes as well as soft drinks.
- Place: The premises will be located along 200 Broadway, New York City and will operate on a 24-hour basis throughout the year.
- Promotion: Arcade VR Lounge will use several promotional strategies including use of aesthetics in interior decoration and lighted sign on the store front, branded giveaways to clients including caps and t-shirts, and free games to returning clients. The company will also have active social media pages for marketing and product promotions.
- Price: Arcade VR Lounge will charge a hourly/gaming rate that is within the market range. This will ensure that ensure the company breaks even within the first year without creating a price war in the market.
Implementation and Control
Successful implementation of this business plan will require the hiring of four full-time employees: the manager and three additional support staff. One of the staff will be appointed as the supervisor. The employees will be trained on the job and therefore individuals with previous experience will be preferred. Since the business will operate on a 24-hour basis, Arcade VR Lounge will also hire two part-time employees to help out during shift change.
The manager will monitor sales figures and customer data on a daily basis and compile a monthly report for analysis. Adjustments will be made whenever necessary to ensure that the company remains on course to achieve its target of breaking even at the end of the first year and expanding its operations by the beginning of year four.
Budget for Year One
|Item||Price per quantity||Quantity||Price|
|Design services including signage and logo||1000|
|Hiring of staff||500|
Income Statement for Year One
Marketing and promotion expenses
In this plan, the operating expenses include the initial cost for purchasing equipment and rent for the business space. The labor costs include the cost for hiring full-time and part-time employees, their training and wages. The cost also includes any payments related to their insurance.
European Commission. Augmented and virtual reality. Digital Transformation Monitor, 2017 October. https://ec.europa.eu/growth/tools-databases/dem/monitor/sites/default/files/DTM_AR_VR%20-%20vf.pdf
Frey, William H. The millennial generation: A demographic bridge to America’s diverse future. Brookings, 2018 January. https://www.brookings.edu/research/millennials/
Teng, Yong et al. Capitalizing on the opportunities in VR/AR. L.E.K. Consulting: Executive Insights, XXI.8 (2019), pp. 1 – 5.
The post Sample Marketing Research Paper on Business Plan : Arcade VR Lounge appeared first on Essay Homework Writing Help.
Get Help for All Your Academic Writing Assignments. We are here to make your academic life more successful and less stressful. Over 10 years, we deliver the promised services. Think wise, buy custom essay! Just tell us “Quickly write my essay!” and provide us with the details of the order and instructions – we will make sure it will be completed on time by our professional writing team
Are you finding it difficult to write your essays, research papers or term papers. Hold on – expert help is on the way!