Software Publisher Business Plan

Sample Software Company

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Strategy and Implementation Summary

5.0 Strategy and Implementation Summary

Our strategy is based on serving niche markets well. The world is full of small and medium-sized businesses that can't get good products or services from the major vendors who focus on high-volume orders only.

Also:

• What begins as a customised version of a standard product, tailored to the needs of a local business, can eventually become a niche product that will fit the needs of similar businesses across the country.
• We are building our marketing infrastructure so that we can eventually reach specific kinds of businesses across broad geographic lines.
• We focus on satisfying the needs of small and medium business.
• We focus on follow-on technology that we can take to the masses, not leading-edge technology that aims at the experts and volume leaders.

5.1 Strategy Pyramids

Our main strategy at Sample is to position ourselves at the top of the quality scale, featuring our combination of superb technology and fine old-fashioned programming, for the buyer who wants the best quality regardless of price. Tactics underneath that strategy include research and development related to new designs and new technology, choosing the right channels of distribution, and communicating our quality position to the market. Programmes are mainly those listed in the milestones table, including new design programmes, new equipment to keep up with design, channel development, channel marketing programmes, our direct sales, and our continued presence in high-end catalogue channels and new presence in the Mall.

5.2 Value Proposition

Sample Software gives the discriminating personal computer user, who cares about design and quality and needs to complete Tasks X, Y and Z, a combination of the highest quality software and latest technology, at a fair price.

5.3 Competitive Edge

Our competitive edge is our software engine, our knowledge of the product area, and our long-term commitment to customer satisfaction.

Major discussion omitted from this sample plan.

5.4 Marketing Strategy

Our marketing strategy emphasizes focus. This is the key. We are a small company with limited resources, so we must focus on certain kinds of products with certain kinds of users. More specifically:

• We focus on the [discussion omitted].
• We focus our [discussion omitted].
• We focus on the kind of product quality that produces good, quotable reviews, which can then generate sales at the retail level because of quotes on boxes. We must always have a relatively heavy PR component to our marketing, because reviews are critical. Ralph Smith has always been active in maintaining personal relationships with the key writers in the field, which is easier for him than for his counterparts because his background includes years in journalism. He is very involved in our relationship with the trade and business press.
• We are building image and awareness through consistency and distinctiveness in our packaging. The yellow pushpin and red box of the Product X, and the "serious software for serious business" theme, will be repeated consistently throughout our marketing.
• We are focusing advertising on several key media, and this discussion is omitted also.

5.4.1 Positioning Statement

For business owners and managers who need to deal with Task X, Product X is software that creates and helps manage professional Task X. Unlike [name omitted] from [name omitted], Product X provides a system for scheduling and tracking the entire Task X process from plan to action.

For business people in all levels of management who make decisions that impact the success of their companies, [name omitted] is software that analyses almost any type of strategic or tactical problem and guides the user to choose the best course of action. Unlike [name omitted], [name omitted] features an easy-to-use intuitive interface and step-by-step online guide system that enables all users--from novice to expert--to make smart decisions easily and confidently.

For small businesses, professionals, and the self-employed who recognise that managing cash flow can be the difference between success and failure, [name omitted] is financial software that handles all the essential bookkeeping functions including checkbook management, check printing, expense tracking and report printing. Unlike [name omitted] and other complex accounting programmes, [name omitted] focuses on cash flow management to avoid cash shortages which are the leading cause of business failure.

5.4.2 Pricing Strategy

Our pricing is determined by our focus on retail sales. We aim at the consumer market with prices intended to generate street prices in the high two-digits, such as the £XX street price of the business plan. Suggested list of £XX seems perfectly satisfactory to us and the customers. We do not expect to change prices on any existing products.

5.4.3 Promotion Strategy

• Discussion omitted. This is very specific to the real sample company, not to be presented here.
• Ralph Smith must also make as many [discussion omitted].
• We need to plan our co-promotion efforts to take full advantage of [discussion omitted].
• Our advertising is focusing on [discussion omitted].

5.4.4 Distribution Strategy

1. We are concentrating our image and awareness marketing by focusing on the [discussion omitted].
2. Our display advertising is leveraged through [discussion omitted].
3. We watch for interesting [discussion omitted], and others.

5.4.5 Marketing Programmes

Our most important marketing programme is [specifics omitted]. Leslie Doe will be responsible, with a budget of £XX,XXX and a milestone date of the 15th of May. This programme is intended to [objectives omitted]. Achievement should be measured by [specific concrete measurement].

Another key marketing programme is [specifics omitted]. [Name] will be responsible, with a budget of £XX,XXX and a milestone date of [date]. This programme is intended to [objectives omitted]. Achievement should be measured by [specific concrete measurement].

5.5 Sales Strategy

Sales strategy shouldn't change. We will continue to work with XXX and to focus on retail sales. During 1999 we should focus not on changing strategy but on improving our implementation, by working on key objectives and much better coordination of marketing efforts related to sales channels.

For the short term at least, the selling process depends on point of purchase decisions, impacted by boxes on shelves and quotes on boxes. Our marketing does not intend to affect the perception of need as much as knowledge and awareness of the product category.

Sales by Year



5.5.1 Sales Forecast

The sales forecast for 1998 depends on Product X for the bulk of our sales, an estimated 15,000 units. We expect Product Y to maintain a ratio of 2/10 against Product X, for sales of 3,000 units.

The table that follows shows unit sales of more than 15,000 Product X in 1998. The related monthly sales table in the appendices shows our sales for 1998 in monthly detail. Sales discounts, discontinued products, and future products sales go into the "Other" sales category.

The Monthly Sales Chart that follows indicates that we have some seasonality in the business. Also, since January-April are the strongest months shown on the chart, the chart indicates that our forecasts are conservative. Although on the chart we show our strongest months as February and April, our strongest period has been September-November in past years.

Sales Monthly



Sales Forecast

Sales Forecast
Unit Sales	1998	1999	2000
Product X	15,100	30,000	60,000
Product Y	2,976	6,000	10,000
Product Z	1,320	2,000	4,000
Old version returns	(900)	(1,200)	(1,800)
OEM & Customisation	9	25	35
Other	12	15	20
Total Unit Sales	18,517	36,840	72,255
Unit Prices	1998	1999	2000
Product X	£35.00	£35.00	£35.00
Product Y	£45.00	£45.00	£45.00
Product Z	£325.00	£325.00	£325.00
Old version returns	£95.00	£35.00	£35.00
OEM & Customisation	£1,000.00	£1,000.00	£1,000.00
Other	£1,500.00	£1,500.00	£1,500.00
Sales
Product X	£528,500	£1,050,000	£2,100,000
Product Y	£133,920	£270,000	£450,000
Product Z	£429,000	£650,000	£1,300,000
Old version returns	(£85,500)	(£42,000)	(£63,000)
OEM & Customisation	£9,000	£25,000	£35,000
Other	£18,000	£22,500	£30,000
Total Sales	£1,032,920	£1,975,500	£3,852,000
Direct Unit Costs	1998	1999	2000
Product X	£7.82	£8.50	£8.00
Product Y	£8.39	£8.39	£8.39
Product Z	£0.00	£0.00	£0.00
Old version returns	£0.00	£0.00	£0.00
OEM & Customisation	£0.00	£0.00	£0.00
Other	£0.00	£8.50	£8.00
Direct Cost of Sales	1998	1999	2000
Product X	£118,082	£255,000	£480,000
Product Y	£24,969	£50,340	£83,900
Product Z	£0	£0	£0
Old version returns	£0	£0	£0
OEM & Customisation	£0	£0	£0
Other	£0	£128	£160
Subtotal Direct Cost of Sales	£143,051	£305,468	£564,060

5.5.2 Sales Programmes

• We continue to work with [omitted] (XXX) to develop and maintain and consolidate our retail channel sales. XXX, is based in Ourtown. Despite the coincidence of a nearby location, XXX operates as a national sales rep firm. It is dependent on XXXX, but it also has an office in Southern California, a rep in Canada, and has good relations with all three of our major distributors. XXX receives a 6% commission on sales to major distributors, which is payable only after we receive our payments.
• We have asked XXX to focus first on four key tasks for 1998: increase our access to sell-through numbers, increase our channels' shelf stocking levels, get our products into XXX, and get our products into XXX. As of April, we had won entry into XXX, and stocking levels seem to have improved. We are still not in XXX, and our sell-through information is good, but not good enough.
• We need to improve our relationship with XXX, which is second to XXX among [omitted] of personal computer software to retail channels.

5.6 Strategic Alliances

Product development: the emphasis in this plan is getting products developed and into the market, especially the new versions of Product X and Product Y.

Marketing: we need to watch sell-through and performance very carefully, to measure the results of our 1997 marketing push. Our first sales review in May seemed to indicate a successful launch, but we need to keep watching.

Finance: we are also looking to enhance our capital structure and management team.

5.7 Milestones

The milestones table and chart show the specific detail about actual programme activities that should be taking place during the year. Each one has its manager, starting date, ending date, and budget. During the year we will be keeping track of implementation against plan, with reports on the timely completion of these activities as planned.

Milestones



Milestones

Milestones
Milestone	Start Date	End Date	Budget	Manager	Department
ProdX V3	2/1/1998	6/1/1998	£5,000	ABC	ProdDev
ProdY V2	6/15/1998	7/15/1998	£15,000	DEF	ProdDev
ProdZ Beta	9/15/1998	11/30/1998	£10,000	DEF	ProdDev
ProdX Packaging	2/1/1998	3/31/1998	£15,000	HIJ	Marketing
ProdX V3 Release	4/30/1998	6/16/1998	£10,000	HIJ	Marketing
ProdY V2 Release	8/15/1998	9/30/1998	£5,000	HIJ	Marketing
Seminar Promotion	3/1/1998	5/15/1998	£10,000	KLM	Sales
Upgrade Promotion	7/1/1998	8/15/1998	£50,000	KLM	Sales
Year-end Promotion	11/1/1998	12/15/1998	£25,000	OPQ	Sales
Channel Rebate Programme	10/14/1998	12/15/1998	£5,000	ABC	Admin
Totals			£150,000