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  • Published on: 14th September 2019
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Watching Football through VR Glasses

Name

Course

Professor

Description of a Business

VR football is a private limited company which aims to make watching football more achievable and available for people in a new style. Virtual reality is a suite of hardware, service and software components allowing the end-users visualize and experience virtual environment of football and games in real-time. The demand for the VR is expected to increase in the coming years owing to the growing demand as a result of the increasing number of football fans. Moreover, the service is very efficient, reliable and affordable. Virtually, we have seen a business opportunity in football industry. It caters for people who can't afford going to the real football matches for various reasons, such as: time, money, availability of tickets.

Our main office is located in the London on Barret Street. We located there in order to make it even easier for people to make orders or discussing any issues or details about our product.

How it works

Users buy VR glasses either from us or in the VR shops. Then they would have to download an app which is available in App store for IOS and google play for Androids. Then each user has to sign up and sign in to the app and then choose a certain match he wants to watch and he has to pay for it. Then app automatically connects to the VR glass through the WIFI and glasses connect to our station which will be set up in the big stadiums and that's it! Whereas, special 3D cameras will be purchased by stadiums to transfer a signal to the station and then glasses, a spectator shall comfortably sit and enjoy his match. Currently, VR has emerged as a promising tool of watching football. Continued advances in VR improvements have supported the increase in usage and reliability.  What makes application of VR in Football so distinctive is that it represents a simple linear extension of existing computer technology for human use. VR offers the potential to create systematic human testing  and training that allow the precise control of complex , immersive, dynamic 3D stimulus presentation with which sophisticated  interaction, behavior tracking, and performance recording is possible.

What VR football about

This is a new type of activity, which allows you to watch most of football matches in virtual reality. It creates a concept of you, sitting in the actual football match and allows you to enjoy spectating a match, just like you are in the stadium.

Who are our customers?

We are aiming to have a target audience aging from 26-32 and 51 to 69, who are our Boomers. Boomers, ages 51 to 69, are the 'biggest spenders' because they have extra cash from decades of saving and investing, according to Forrester.

Note in this promotional video it made sure that Boomers were its target audience. Also note how their testers all seem elated, not confused and certainly not dizzy.

What are the consumer research methods

Market research is often needed to ensure that we produce what consumers really want and not what we think. In our case we would be considering both methods primary research and secondary research and asking our target audience what features and extra things they would like us to do, in order to make them feel comfortable in using it.

Main methods would be:

-Surveys (online/real life)

-Focus groups

-Observation of customers who uses VR for different purposes

-Social networks

Legal Structure

This business will be a private limited company that's the owner liability will be limited to shares. The owner's activities will determine the business depth, profit or loss and tax. The company is limited to have 50 or fewer shareholders and the shares will be prohibited from trading publicly. The company acquires independent legal structure when it incorporates. When a business incorporates, it becomes a independent legal entity , meaning it is able to sue or own assets  separate from the company owner. In addition,  the corporate tax will be lower than those paid  by other types of business even though the financial statements are filed not later than nine months after the fiscal year ends. This means, the first accounting starts immediately the company is incorporated. Proper records must be kept in order to pursue tax advantages. Again, shareholders must agree to the sale or transfer of shares in order to reduce the risk of hostile takeovers. The restriction placed on the sale of shares is an advantage because shareholders have limited options for liquidating shares.

Location

The business shall be located at Barret Street in London.

Human Resource

Bellow is the Management Hierarchy

The managing director shall make critical decision regarding the business across the departments. He should also develop and execute business strategies. The managing director should also ensure that the company policies and legal guidelines are communicated all the way from top to bottom. He should be able to analyze problematic situations and occurrences and provide a reliable solution to ensure the survival of the company and growth.  Must have basic skills in Commerce and entrepreneurship and have excellent organisation skills and leadership skills. A degree in computer science is Mandatory and the salary scale shall be $38,000.

Financial manager should keep all the financial records for the business, balance accounts and receive and make payments for the company. The candidate must be able to show strong understanding of corporate finance and measures of performance. He should also be familiar with corporate law and poses outstanding analytical and problem solving skills. Must have a degree in business finance and accounting option. The basic skills include ability to compute with the internal standards of general accounting using quick books. The salary is $ 25,000.

Sales manager- the candidate is responsible for publication and advertising of business products. The personnel in this rank should be a holder of degree in marketing. He should be excellent communicator with great interpersonal skills and presentation skills. The candidate should be able to manage all marketing activities for the company and develop strategies that are in line with the company's objective. The personnel is also supposed to organize marketing campaigns, oversee marketing budget and give the company corporate identity. He should be able to understand the modern marketing skills very well. The candidate must also be able to create wide range of marketing materials, monitor and report on effectiveness of marketing communications. The salary is $ 25,000.

Production manager ' Ensure the product reaches the required standards and quality services. He should be able to estimate the costs and prepare production budgets. The candidate should be capable of organizing the workflow to meet specifications and deadlines. Generally, production manager is supposed to determine the amount of necessary resources (Workforce, raw materials and machinery). The manager should be a degree holder in Economics. He should be able to understand what is needed in the market as well as being conversant with total quality management systems model. He should also demonstrate knowledge of performance evaluation and budgeting concepts. The salary scale is $25,000.

Secretary- tipping and filling the documents. The worker at this category should have a diploma in secretariat. She should be able to type very fast and dress modestly. The candidate should be able to maintain customer confidence and protect operations by keeping information confidential. Most importantly, the personnel should be able to maintain company's schedule by maintaining calendar dates, arranging conferences, meetings and travel. Also, the candidate secures information by completing database backups and provides historical reference by utilizing filing and retrieval systems. The salary is $15,000.

Customer care ' He is supposed to be making and receiving calls for the company. The personnel doing this task should be a very eloquent communicator and have a degree a diploma in mass communication. The salary scale is $ 20,000.   

Supervisor ' ensure the software producers utilize their time maximally on each output. Customer care are the image of the company, they are supposed to build a sustainable relationship and trust with customer accounts  through open and interactive communication. More importantly, he/she sjpuld go extra mile and engage the customers, handle their complains, provide appropriate solutions  and alternatives within the time limits; follow-up to ensure resolutions, keep records of the customer interactions, process customer accounts and file their documents. The personnel should have a degree in Computer science and be very conversant with programming. The salary scale is $ 35,000.

Developers- Software developers are the experts tasked with the duty of innovating and developing the software.  They are also supposed to ensure that the running of software is successful to various clients.  They create, update and add new features to the software. The candidate is always attached to computers in order to troubleshoot and debug applications when they identify slow performance. The developers should be highly knowledgeable and timely. The personnel should have a degree in computer science or IT. The salary scale is $ 28,000.

Security ' ensure the visitors profile is well  kept  and the assets of the business premise are well guarded. The applicant should have past experience of 3 years in top security firm. Again, he should have a certificate of good conduct and Certificate in security studies. The salary scale is $ 11,000.

Cleaner- to ensure that the compound and Business  premise is extremely clean. This personnel is supposed to be registered to a firm that offers  environment friendly cleaning services. The salary scale is $ 11,000.

Finance Section

The company will use long-term financing for assets and projects while the continuing operations will be financed in short-term.

Long-term sources will include equity financing and capital notes. They help is reducing capital risk since the cost of equity is a deductable expense.  On short-term financing, the company will purely rely of accounts receivable financing. We shall take commercial bills to the bank whereby the payment will be discounted thus the bank will charge a small fee.

Costs

Start-up cost

ITEM COST   ( USD)

Rent Deposit  (2months) $20,000

Furniture and fittings $10,000

Business Adverts $10,000

Premises Renovation $20,000

Licences and permits $2,000

Insurance $4,000

Water and Electricity $20,000

Miscellaneous $10,000

TOTAL $96,000

Fixed and Variable Cost

ITEM 1STYEAR

(US dollars) 2ND YEAR

(US dollars) 3RD YEAR

(US dollars)

FIXED COSTS

Salaries

Licenses and Permits

Rent

Insurance

Total Fixed Costs

Variable Costs

Advertisement

Transport

Electricity

Water bills

Telephone bills

Total variables

312,000

20,000

120,000

48,000

$500,000

51,000

67,500

90,500

48,500

44,000

$360,000

312,000

20,000

120,000

48,000

$500,000

48,500

65,000

88,000

47,000

41,000

$346,500

312,000

20,000

120,000

48,000

$500,000

52,000

64,500

85,500

49,000

42,500

$350,000

Budget

Sales Budget

Year 1Year 2rd Year 3rd Year

Receipts

Cash sales 3, 200,000 3, 580, 000 3, 950,000

Debtors 750,000 550,000 800,000

Loan 470,000 579,000 834,000

   Total Receipts 4,420,000 4,709,000 5,584,000

 Payments

 Cash purchases 360,000 346,500 350,000

Creditors - 120,000 200,000

Fixed assets 690,000 566,000 535,000

Expenses 800,000 846,500 850,000

Less total payments 1,130,000 1,117,500 1,250,000

Net receipt payments 3,290,000 3,592,000 4,349,000

Add Opening balance 4,000,000 4,500,000 4,880,000

Closing balance 800,000 740,000 880,000

Cost Budget

ITEM 1st year

USD 2ND year

USD 3RD  Year

USD

EXPENSES

salaries

Wages

Advertisement

Transport

Water bills

Insurance

License and permits

Electricity

Rent

Telephone

Depreciation

TOTAL 0PERATING EXPENSES

312,000

58,500

51,000

67,500

48,625

48,000

20,000

69,125

120,000

44,000

5,000

$843,750

$ 656,250

312,000

57,000

48,500

65,000

47,000

48,000

20,000

88,000

120,000

41,000

8,000

$874,000

$ 866,000

312,000

60,000

52,000

64,000

40,200

48,000

20,000

69,000

120,000

40,000

4,000

$829,000

$ 1,071,000

Production Budget

Year 1 Year 2 Year 3

Budgeted Sales Unit 5000 7000 8000

Planned ending units 500 500 500

Total production required 5500 7500 8500

Beginning Units

1000

500

500

Planned production units

4500

7000

8000

Profit Budget

ITEM 1st year

USD 2ND year

USD 3RD  Year

USD

Opening stock

Closing stock

Cost of goods sold

sales

Gross profit

Other income

Discount allowed

TOTAL INCOME

0PERATING

EXPENSES

salaries

Wages

Advertisement

Transport

Water bills

Insurance

License and permits

Electricity

Rent

Telephone

Depreciation

TOTAL 0PERATING EXPENSES

Net profit before tax

Tax provision (13%)

Net profit after tax 4,000,000

    800,000

3,200,000

3,500,000

300,000

1,200,000

1,500,000

312,000

58,500

51,000

67,500

48,625

48,000

20,000

69,125

120,000

44,000

5,000

843,750

656,250

85,312.5

570,937.5 4,500,000

   740,000

3,760,000

4,250,000

   490,000

1,250,000

1,740,000

312,000

57,000

48,500

65,000

47,000

48,000

20,000

88,000

120,000

41,000

8,000

874,000

866,000

112,580

753,460 4,880,000

    880,000

4,000,000

4,600,000

   600,000

1,300,000

1,900,000

312,000

60,000

52,000

64,000

40,200

48,000

20,000

69,000

120,000

40,000

4,000

829,000

1,071,000

  139,230

931,770

Breakeven Point

 Breakeven point is a situation whereby no profit or loss is made in the business.   

(A) BREAK EVEN POINT = (FIXED COST)/'(CONTRIBUTION [email protected])

(B) CONTRIBUTION =sales 'variable cost

(C) CONTRIBUTION MARGIN='(@contribution)/sales

1st  year 2rd year 3rd year

Contribution

Contribution margin percentage   

Breakeven point 3,500,000-360,000

=Ksh.3,140,000

(3,140,000/3,500,000)X 100

=89.71%

(500,000X100)/89.71

=Ksh.557,351.46 4,250,000-346,000

=Ksh.3,904,000

(3,904,000/4,250,000)X 100

=91.86%

(500,000/91.86)X100

=Ksh.544,306.55 4,600,000-350,000=Ksh.4,250,000

(4,250,000/4,600,000)X100

=92.39%

(500,000/92.39)X100=Ksh.541,184.11

Financial Forecast

Year 1 Year 2 Year 3

Opening balance - 225,625 608,625

Cash inflow

Cash sales 650,000 775,000 950,000

Debtors payment  -  20,000 55,000

TOTAL CASH INFLOW 650,000 1,020,625 1,613,625

Cash outflows

Cash purchases 100,000 150,000 175,000

Payment to creditors - 50,000 80,000

Salaries 78,000 78,000 78,000

Advertisement 12,000 13,000 15,000

Transport 18,000 16,000 16,500

Telephone 12,000 10,000 11,500

Rent 30,000 30,000 30,000

Insurance 12,000 12,000 12,000

Electricity 22,625 21,000 23,000

Water bills 12,125 11,000 13,000

Wages

Licenses and permit 14,625

5000 16,000

5000 13,500

5000

TOTAL CASH OUTFLOW 424,375 412,000 472,500

ACCUMULATED CASH 225,625 608,625 1,141,125

Marketing Mix

Promotion and Pricing Mechanism

Pricing Strategy

In our business we will be using the strategy called ,,Pricing for Market Penetration'' which means that we will aim to attract buyers by offering lower prices on goods and services. While many new companies use this technique to draw attention away from their competition, penetration pricing does tend to result in an initial loss of income for the business.

Promotion

We will be offering different promotions. For instance one of them would be an option in the VR football app. It would be a special subscription for 10 matches, which will include a 10 tickets to any matches, another subscription is for 20 matches + gives you an option to invite more than 2 friends with you, as with normal ticket you can only invite 1 friend. The 3rd subscription will include 30 matches + invitations for 3 frinds + rare avatars, which is not available with normal ticket. The point of this promotion is that people will save money buy purchasing those subscriptions and also getting little bonuses like extra avatars, which will also work as some kind of motivation to purchases subscription.

Unique selling point

There is no competitor in the current market right now

Since the VR Football app is the only app of it's kind available on the market. The low price is also an advantage, customers only need to subscribe through the app to get access to the games they want to see and they need to pay between x and y.

The price is not set automatically, it depends on the different games and on the popularity of the teams playing against each other.

Who are the main competitors?

Our main competitors are real football match ticket sellers. Therefore, every business sells tickets for a football match could be our potential competitor.

Online sellers:

Premierleague.co.uk

livefootballtickets.co.uk

ticketmaster.co.uk

onlineticketexpress.com

Financial considerations

Cost of making the app: pay the Apple Store, Google Play to keep the app on their platform

The cost of the advertising (like ads on YouTube or pop-up ads)

Find investors would be interesting for our company since we don't have a huge budget, it would help the company develop

We have to consider giving 20% interests to the VR Company

We have to give 10% interests to the stadium for using their cameras (depending on their profits)

SWOT Analysis

Generally, a SWOT analysis serves to uncover the optimal match between the internal strength  and the weaknesses of a given entity  and environmental trends (Opportunities and threats) that the business mighty face while running in the market place.

Strength

Quality of the product due to technical advantages in the Mobile Market

The spectator is able to watch live at his convenience.

Gaming factors to enhance motivation ' Apart from watching football live. The customers are able to watch game of their choice. This specification increases motivation leading to increased sales.

Great support from developers- The team responsible for developing the software does not disappoint. It is very qualified.

Weakness

Requires a lot funding ' development of VR requires a big chunk of capital because the product has to work smart. There is a lot of research and development.

Not very common- this is a new product and it requires a lot of marketing. As such, a lot of money is needed.  

Football traditions ' Most of the football funs like watching matches as a team. Therefore, some people see no need of buying the gadget.

Opportunities

Online advertising ' There is room for growth. We shall advertise our product on social media regularly.

Scientific acceptance ' researchers and academicians have just accepted VR as another tech evolution with no harm.

Gaming industry- the introduction of gaming in VR has attracted more consumers.

Threats

After-effect lawsuit- VR is a new technology and companies with conflicting interest can sue maliciously.

Limited awareness- VR is little known by people who are less interested in football. As such, it is difficult to sell outside pitch lovers.

Perception that VR would affect eyesight after prolonged usage. Consumers lack clear information on how to use, others fear that it has health complications in future.

Reference  

D. Westerhoff, 2011: Reality, A Very Short Introduction. Oxford University Press, Oxford, UK.

J. Jerald 2015. The VR Book. Association of Computer Machinery and Morgan & Claypool Publishers.

L. Olson, D. M. Krum, E. A. Suma, and M. Bolas.  2011.A design for a smartphonebased head mounted display. In Proceedings IEEE Virtual Reality Conference.

R. Steuer 1992. Defining virtual reality: Dimensions determining telepresence. Journal of Communication.

T. B. Sheridan 2012. Musings on telepresence and virtual presence. Presence: Teleoperators and Virtual Environments.

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