You must all be full of questions and queries or even doubts about our business but we are here to answer them all and diminish all your doubts with our FAQ section!
BASICS
1) What kind of services or goods does your firm offer? Describe your business.
We rent STUFF. Sounds simple enough? Well, more specifically we rent out branded goods and goods that you may only need for a certain amount of time in which you crave for! OR do not have the money to buy the good and can't imagine spending money on buying one! We will be your Macy's of rental business carrying all your different selections!
Seriously though, how many times have you wished for a Gucci dress or a Louis Vuitton handbag that you may only need for a certain night or even had a sudden urge to just strum the strings of guitars randomly or needed certain equipment just for your sweet sixteen party like a disco ball or a movie projector, which you may never really need again.
In the current times, after the recession during the recovery or even in plain good times, it seems almost of no use to buy something which you will not use as often to bring down its unit cost or "Indivisibilities"( if you think of it in terms of a comsumer with the same comcept in mind). Well, we have the solution! We provide goods for a certain amount of days just for you! This allows you to have a wide range of choice of goods and with the advantage of different goods every night or day as you strut yourself down the red carpet of your company dinner or simple day to day activities which looking stylish and amazing in your Prada Shirt or Bvlgari Ring impressing your peers and the ladies.
We will have a store concept so you get to try on and see the product in person while also providing delivery services with a waiver for the more expensive or lucrative products. An added fee has also to be imposed for the cleaning of the good after-use. We start small by buying a certain amount of branded products in high demand and then proceed to buy more as we profit.
2) Which Market Structure is your firm likely to fall under? Explain why.
Oligopoly market structure.
Depending on the market or country that the industry resides, there may be quite a few of such firms or not very many. With the market that we reside, it seems to compromise of just a few firms but are relatively large. Currently, it is not yet thought of as a very profitable business with people craving for new products but if the perspective is put on the middle-class who are satisfied with what we provide and the price we set compared to the big couture boutique style shops at Paragon. Therefore, there are currently not many of such firms like us who provide a store-rental style of a shipping experience.
If we succeed in becoming a world-class rental firm(which we will, i believe, fingers-crossed), it can create a barrier to entry for other firms or it may have low barriers, explained by the contestable market theory, concentrating on the probability of new firms entering the industry in the future when it becomes more attractive and profitable, which is then also determined by the entry and exit cost.
The nature of our product is not exactly homogeneous, in which a Oligopoly market structure implies where there are some almost identical products but also highly differentiated products which we may custom make from the existing product and in which both nature of product is provided in perfect condition.
3) What is allocative efficiency?
Also Know As, the socially optimum level of output.
Allocative efficiency occurs where suppliers are producing the optimal mix of goods and services required by consumers. It is when the marginal cost( cost of producing one more unit) is equal to average revenue (price received for a unit). If a firm is producing at the allocatively efficient level of output there is a situation of "Pareto optimality' where it is impossible to make one person better off without making someone else worse off.
4) What is productive efficiency?
Productive efficiency is when production of one good is achieved at the lowest cost, given the production of the other good(s) and is when the economy is operating at its PPC. It is when the highest possible output of one good is produced, given the production level of the other good(s).
Staying and SURVIVING in the industry: Cost and Revenue Models.
1) Who are some of your competitors? Name these firms.
They are mostly online sites with few store like rental shops like ours exist.
There are sites such as:
http://www.bagrental.blogspot.com/
http://www.thatbagiwant.com.sg/
http://www.sgbagrental.com/
http://www.sg.be-a-fashionista.com/
2)When there are barriers to entry,it is difficult for firm to exit or enter the industry. In order to keep out new competition, your firm may want to erect barriers to entry. What kind of barriers to entry are you going to erect for your firm? How do you go about doing it?
We are going to have strong branding identity and concentrate on customer satisfaction on every visit which is also our firm's vision to achieve customer loyalty. We want to succeed in being the dominant and go-to stop for the consumers. We want to be the pre-dominant player in the industry and therefore creating that as a source of barrier of entry to potential entrants.
3) Using Economies of Scale is also a form of barriers to entry. Which type of Economies of Scale will your firm be trying to reap from?
There are many Economies of Scale, but there are the ones in which we will surely apply. We would definitely have technical economies where there is a division of labour and use cost saving techniques like indivisibilities, which is making full use of our production materials.
As we grow bigger, marketing economies where bulk buying as our demand and consumer power grows and more can be spent on advertising our products. We will start the administrative/ managerial economies as soon as our profit and business grows to a certain stage of success. As we grow bigger and more labour is employed we will apply the Welfare of social economies to keep us as a team bonded and maintaining the welfare of our workers.
4) What kind of price or non-price competition will your firm engage in?
We will definitely keep or move our prices accordingly to have maximum profitablity while not ignoring consumer demand and the price they are willing and able to pay for our product.
We will strive to make our brand the optimum brand and making it a lucrative place to shop. We will have special features, packaging, advertising, sales promotion, distribution features and our current and will always exist policy of free delivery for the more expensive prodcuts as well as special products randomly.
No we will not. To maintain the highest of customer loyalty, we will treat every customer with the same respect and service no matter their status and in the same way, price will be equal for all. Customer loyalty is of utmost importance to us and equality is how we view we may achieve this. However, we may as a form of branding technique, and to keep the loyal customers coming back, we may start loyalty cards but we will still not have price discrimination on our own products but collaborate with other companies for an incentive like a spa or manicure trip for our customers to enjoy which also creates that constant loyalty to our firm.
Stockholders Currently Include:
Amanda ONG
Harsh BOTHRA
Geetha MUTHUKUMARAN
Desmond KANDIAWAN
Nicholas ANG
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