Though the production of screws and the related products may seem a minor cog in the creation of furniture and various types of equipment, it, must not be underestimated, as screws allow for assembling the former and keep the piece of equipment in question together. Therefore, screws production is essential for sustaining the furniture and equipment related business. Consequently, the demand for screws in the target market is rather high. Unfortunately, the supply is also rather ample, which means that the company is likely to face rather tough competition. At present, the target market can be described as a monopolistic one, with the BAPP Company (BAPP 2014) being at the helm of the screws and bolts production industry.
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Seeing that the target market is already dominated by a very successful and quite powerful company, it can be elicited that the primary goal of the organization is to integrate into the economic environment in question successfully and attract new customers, therefore, gaining more competitiveness within the market. It would be wrong to strive for surpassing BAPP at present, as the rivalry may exacerbate the organization’s current state and drain its powers.
The information provided below shows clearly that, despite minor issues concerning the increase in liabilities, the Golden Screw organization is ready to wander into the great area of the British market:
Table 1. Balance Sheet.
|Current assets || ||Current liabilities || ||Common stock||100,000|
Property, plant, and equipment
| ||Long-term liabilities || ||Retained earnings||200,000|
|Intangible assets || ||Total liabilities||425,000||Less: treasury stock||50,000|
|Other assets||4,000||Total stockholders’ equity||250,000|
|Total assets||904,000||Total liabilities & stockholders’ equity||625,000|
According to the income statement details, Golden Screw may need to put a stronger emphasis on its promotion strategy to attract more customers.
Income Statement for One Year (2015)
Table 2. Income Statement.
|Total Revenue||$ 2,000,000|
|Costs of Goods Sold||$ 100,000|
|Gross Profit||$ 1,900,000|
|Operating Expenses || |
|Operating profit||$ 1,000,000|
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No matter how perfect a piece of equipment may seem like a project when implemented and put to practice, it may fall apart unless each of its details is in its place. With present-day disturbingly low standards for screws and the insouciance of the companies producing them, the threat of facing an accident increases exponentially.
Golden Screw provides the answer to these problems. With a unique technology for producing screws, as well as an elaborate system of testing and audits, the company is capable of delivering products of only the finest quality.
Our dexterous employees are ready to provide the target customers with services of outstanding quality. In the realm of the global economy, where providing high-quality equipment is essential to the efficacy of performance and the safety of equipment, using high-quality components, particularly, safe screws, is an indispensable part of the production process. Outstanding standards of production are what make the Golden Screw Company eminent among the rest of the organizations.
We have gathered a team of professionals, including qualified engineers and product developers, to create a product that will keep every single customer satisfied. Based on the principles of transformative leadership, the approach used by the company managers facilitates a consistent professional growth of the staff and, therefore, high-quality standards of the product.
The business model used by the Golden Screw Company allows for the exasperation of the relationships between the key stakeholders can be defined as the Applegate and Collura Business Model (2001), as it allows for focusing on the enhancement of the product quality, the creation of plenteous sets of services, and the satisfaction of the customers’ needs (Applegate, 2001).
Reasons for Running Business
In the realm of the global environment and the triumph of information technology, the factors that used to inhibit the development of private business seem to have faded into the background, giving way to new and aspiring business people with acumen for business-related operations and the negotiation skills, as well as numerous ideas for improving a specific area of industry. Therefore, traditionally, the key reasons for starting any kind of business concern a financial gain, the need to upgrade the standards within a particular field or to make a statement in the specified area, and the case in point is not an exception. The willingness to debunk the dangerous myth about the safety of the devices built with the help of usual screws, as well as to become well known on a global level, is the key driving force behind the project.
Previous Work Experience
The owner of the organization had been employed as a maintenance planner in a natural gas liquefied plant before starting their own company. In the course of working for the plant in question, the owner of the business worked with SAP enterprise resource planning software. As a result, the person in question has prominent skills in dealing with suppliers both domestically and internationally, which is essential for developing the logistics strategy from the organization.
Qualifications and Education
The leader of the Golden Screw Company has a degree in Business administration, as well as an MBA Degree.
The owner of Golden Screw has studied a range of models that can be adopted in the specified domain to enliven it and reduce the influence of the malign factors to the minimum. Particularly, the domains of Operations and Logistics, Leadership and Strategy, Finance and Accounting, Management Consultancy skills, and Customer Focus and Innovation deserve to be listed among the key ones.
Hobbies and Interests
The company leader is a rather sociable person; they enjoy spending time with their friends, as well as communicating with their family members. Besides, the company leader engages in sports that involve working in a team and creating a team spirit.
Apart from the company leader, the organization’s operations are fueled by the efforts of four laborers and a sales and marketing specialist. Though the number of people involved in the business is quite humble, the efforts that they put into the promotion of the business are bound to lead to some fruitful results.
Products and Services
What the Company Has to Offer
The Golden Screw Organization is going to sell products to its target audience. Particularly, screws and the related goods (i.e., bolts, screw nuts, washers, etc.) are included in the range of the goods that the company produces. In addition to the aforementioned products, the olden Screw organization also carries out the works related to equipment assembly, repairs, etc. Finally, the fact that the company delivers the final product to the customer deserves to be listed among the key features that make the organization so popular among the target audience.
Characteristics of the Product
The Golden Screw Company is going to meet the basic hallmarks in terms of product quality, which means that the screws and other components produced will have to pertain to the existing standards for tightness.
Types of Products to Be Sold
Even though the range of products that the Golden Screw Company is going to supply its customers with is going to be rather homogenous, it would be wrong to claim that it will lack diversity in its technical characteristic. The size, shape, and other parameters of the screws and other goods produced will vary depending on the nature of their use, as well as the type of equipment that they are going to be used in.
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However, certain parameters are going to remain fixed. For instance, the diameter D and the length L will be assigned to the products by default. The following framework is highly demanded in the target market and, therefore, will be used as the template:
Table 3. The standard for the Golden Screw Products.
|Diameter (mm)||Length (mm)|
|3||10, 20, 25, 30|
|4||20, 25, 30, 35|
|5||20, 25, 30, 40, 45|
|6||20, 30, 40, 50, 60|
As it has been stressed above, the company will not limit itself to producing solely screws; spending the organization’s resources on developing and promoting a single product does not seem a reasonable policy. Therefore, it is desirable that the production format should remain flexible and that new parameters could be introduced easily into it.
When to Start the Selling Process
It is suggested that the selling process should follow the advertisement campaign. Starting selling the product straightaway may be deleterious to the company’s success, as, is not quite popular in the target market, the organization may need to attract some clients first. As soon as Golden Screw has a crowd of devoted customers, a fruitful outcome of a selling process can be expected.
The value selling model will allow for enough creative liberty in terms of pricing policy design and at the same time set the stage for the company’s evolution in the Al-Hasa market.
Types of Customers
When defining the typical customer of the organization, one must bear in mind that the organization has only commenced its journey to conquering the global market. Therefore, certain types of customers, such as loyal ones, are yet to be attracted. Seeing that the business to the customer is going to be the basic type of commerce transaction that the organization will adopt, it will be adequate to aver that the need-based customers will make the basis for the target market for the company to operate in.
Arguably, the business-to-customer model could inculcate certain ethical values to the organization and its staff, therefore, facilitating the promotion of customer satisfaction principles. However, as Golden Screw is not going to sell the product to the end customer directly and will carry out business transactions with other companies, the adoption of a business-to-business model seems the most reasonable choice to make.
The local furniture and equipment producing factories and companies will be the key customers of Golden Screw.
Location of the Target Audience
The target customer is based in Al-Hasa, a region located in the East of Saudi Arabia. The total population estimates around 600,000 (Al-Hassa city profile, n. d., para. 4), and resides in fifty villages scattered all over the area (Al-Hassa city profile, n. d., para. 4). Since the companies producing equipment, furniture, and other goods requiring assembling and, therefore, needing bolts, are the target audience of the Golden Screw Company, the following forms located in the area must be considered in the first place: Al Abdul Karim Holding co., Al Bassam for Elect. & Light, Al Fozan Electrical Materials Co., Ali Haidar al Yami Co., Al Mansour Electricals Store, Al Mala Furniture Center, Al Safran Electricals & Plumbing Store, Al Sharboun Furniture Showroom, Al Sulaiman Abdul Rahman Trading EST, Hassan Al Ghanim Furniture (furniture producers); Essa Al Sultan Son’s Trad. & Cont. Group, Abdul Mohsen a. Al Swailim Est., Ahmed I. Al Owaidh Trading Est., Ali Haidar Al Yami Co., Al Sulaiman Abdul Rahman Trading Est., Eram Communications Est., Hussein Ali Al Eisa Est, Pan Middle East Trading & Contracting Co. and Universal Industrial Tools Est Factory (equipment and tools) (Saudi Arabia Business Directory 2014).
Reasons for Customers to Buy the Products
As the target market is already represented by a very powerful organization, which has been selling its products to the target audience for years, making a name for the Golden Screw Company may be quite toilsome. Nevertheless, the obvious assets of the company are bound to have their effect, and the Golden Screw organization will necessarily succeed in a relatively short amount of time.
Among the key reasons for the target customers to buy the products of the company, the impeccable quality of the screws and rather low prices deserve to be mentioned. As far as the former asset is concerned, the high quality of the product is manifested by its high durability and tolerance to corrosion, rust, and paint. The aforementioned characteristics are the result of a combination of unique production techniques (hardening, coating, plating) and the quality of the material used (stainless steel alloy, 18% chromium, 8% nickel). As far as the prices are concerned, a flexible policy is introduced and a range of discounts are included in the pricing list.
What Shapes the Customers’ Choices
As it has been explained above, the environment, in which the Golden Screw is going to operate, can be considered as rather inimical in terms of the competitive rates. However, the customers will necessarily identify our company as the only legitimate and trustworthy organization for buying bolts, screws, and related products.
Current Status of Customer Relationships
The company has not started selling its products to the customer yet. However, Golden Screw is going to commence the selling process and update its relationships with customers after the promotion campaign is over.
Methods of Attracting the Target Audience
Even though Golden Screw has not yet started attracting its potential customers, the strategy for driving more people to the company and convincing them to use the firm’s products has already been drafted. It is assumed that the incorporation of traditional advertisement and e-commerce will help promote the goods, therefore, making the Golden Screw Company more popular among the target demographics.
The use of social networks should be viewed as one of the primary methods of attracting the target audience.
Key Findings from Desk Research
As it has been emphasized above, the opportunities in Al-Hasa, though quite plentiful in terms of the number of companies that Golden Screw may work with, are rather scarce when it comes to defining the diversity of the services to provide and promote. Desk research has shown that most of the organizations in the region are located in Dammam City, whereas the company will be situated in the Industrial City in Al-Hasa (140 km away from Dammam). Therefore, transportation costs must be taken into account when identifying the key issues that the company is most likely to encounter in the specified region. Also, the fact that Qatar is rather close to the specified region enlarges the selling opportunities for the organization to an even greater degree. With the company’s low to moderate prices and the high demand from Qatar, a rapid increase in revenues is expected.
Key Findings from Field Research: Questionnaires Analysis
To analyze the specifics of the target market, the company issued questionnaires and sent them to the target customers. The answers to the questionnaire indicate that the customers are looking for goods of higher quality than the ones available in the market at present. Besides, the survey displays the need to produce at least 5,000 tons of bolts, screws, and related products on an annual basis.
Key Findings from Field Research: Test Trading
Defined as the government initiative for assisting entrepreneurship owners in becoming more stable in the perturbed market of Saudi Arabia, test trading will be used so that Golden Screw could fight the key competitors efficiently and attract target customers fast.
The Golden Screw Company is planning to become the leading supplier of screws and bolts in the state.
Table4. Cost Analysis.
Reasons for choosing these methods
| || || |
|TOTAL COST||7,500 SAR|
It should be noted that, apart from the costs listed above, the company may have to bear additional expenses associated with transportation, technology, security, etc. Therefore, the total sum of the money to be spent on the promotion campaign may amount to 9,000 to 10,000 SAR. Nevertheless, the strategies listed above must still be deemed as quite legitimate compared to the traditional promotion tools, including advertisements on billboards and TV.
Table 5. Table of Competitors.
|Name, location |
and business size
|Al-Jazwa Arabia (Orion Arabia), Al-Jubail, medium||Bolts, stud bolts, anchor bolts, nuts, washers, fasteners||$0.55–0.85||Long and solid record; flexible pricing strategy||Product quality|
|SARB, Abu-Dhabi, global||Bolts, nuts, fasteners||$0.02–0.08||Extremely low prices||Product quality and longevity|
The table above shows clearly that the Golden Screw is going to face rather stiff competition in the target market. Even though the latter is not represented by a range of companies, the ones that are already featured in it dominate it and are not going to leave any time soon. Thus, the necessity to come up with an innovative strategy for product promotion emerges.
Table 6. SWOT Analysis.
|Strengths||Innovativeness, high quality of the product, low prices|
|Weaknesses||Lack of experience|
|Opportunities||Becoming the leader in producing high-quality screws|
Unique Selling Point (USP)
Besides the pricing strategy and the outstanding quality of the product, the Golden Screw will need to focus on the search and the further promotion of its key asset. Though at present, the concept of the company’s selling point is quite equivocal, it can be identified as the combination of outstanding quality and a flexible pricing strategy.
Operations and Logistics
Production Process: Key Landmarks
The production process will consist of three key stages, i.e., cold heading, thread rolling, and quality control. The former presupposes that a pre straightening machine processes a mechanical coil while a wire is being fed to it. As soon as the wire is straightened, it flows into the cutting machine, which splits the wire into the pieces of the designated length, as well as cuts the head of the screw into the preprogrammed shape. The screw head, in its turn, is created in the heading machine with the help of an open or a closed die. The latter delivers one or two punches to shape a
screw head and an accurate screw blank. The speed of modern cold heading machines allows producing around 110–550 screw blanks per minute (Glover 2014, para. 11).
Delivery to the Customers
The products will be delivered to the customers with the help of the services provided by the local delivery organizations.
Payment Methods and Terms
The customers will be able to pay either with their credit card, or cash. Credit card payments may also be submitted electronically. VISA, Master Card, PayPal, and other services will be accepted for paying for the goods.
Suppliers: Table of Key Companies and Locations
Table 7. Suppliers.
|Name and location of the supplier||Items required |
|Payment arrangements||Reasons for choosing a supplier|
|Al-Hasa Steel Factory (Al-Hasa)||Steel||Universal credit (alternative payment arrangement)||Proximity to the factory location; relatively low prices|
|Building Material Screening (BMS)||Carbon||Universal credit (alternative payment arrangement)||Affordable prices, outstanding quality|
Premises: Rent and the Related Issues
The company is going to rent a building in the center of Al-Hasa so that the key suppliers and the target customers could be accessed within a relatively short amount of time. As far as the pricing is concerned, the company will consider the offers of SAD 14,000. As the organization will have to spend a lot on high-quality products, Golden Screw cannot afford to pay a high price for renting a building.
Equipment: Table of Essential Instruments
High-quality products require impeccable equipment; therefore, spending a major part of the organization’s funds on the acquisition of proper equipment is an indispensable necessity. Among the key tools the following ones must be listed:
Table 8. Equipment.
|If being bought|
|Item required||Already owned?||New or second hand?||Purchased from||Price|
|Prestraightening machine||No||New||Shenzhen Honger Machine Equipment Co., Ltd.||SAD 9,500,000 – 10,000,000|
|Cold heading machine||No||New||Guangzhou Inner Machinery Co., Ltd.||SAD 180,000,000 – 500,000,000|
Transport: Type, Route, and Price
Trucks will be used to transport goods and raw materials. It is expected that the transportation fees will make around SAD 2,500. As far as the route is concerned, the main routes will be chosen for the fastest transportation.
Legal Requirements: Complying with the Trade Law
To avoid possible legal issues, the Golden Screw Company will need to comply with the WTO standards. At present, the tendency for countercyclical trade policy can be observed in the state, which may be viewed as the reason for concern (WTO 2014).
Insurance Requirements: Splitting Liabilities
Golden Screw is bound to have a range of liabilities when entering the global market. Particularly, the transportation issues must be taken into account. Herein the necessity to consider the idea of starting a partnership with another company and, thus, splitting liabilities (Rejda & McNamara 2014).
Management and Staff: Leadership Approach
To convince the staff to deliver the performance of the finest quality, the company managers will have to adopt the transformative leadership approach. Thus, a rapid increase in motivation rates can be expected among the employees.
For the staff to be motivated enough, the Golden Screw Company leaders will have to include monetary incentives into the set of encouragements for the employees. Thus, employee satisfaction can be achieved and the production process can be enhanced.
Costs and Pricing Strategy
Cost and Pricing Table
Table 9. Costs and Prices.
|Product/service name||Screws and bolts|
|A||Number of units in the calculation||20,000|
|B||Product/service components ||Components cost |
|C||Total product/service cost||SAD 15,000|
|D||Cost per unit||SAD 0.15|
|E||Price per unit||SAD 0.50|
|F||Profit margin (£)||SAD 0.35|
|G||Profit margin (%)||30%|
|H||Mark up (%)||15%|
Data Analysis: What May Be Improved
As the information provided above shows, the company is likely to succeed as soon as the quality of the product upholds the standards established by the customers. The other companies in the target market offer their products at a much higher cost and a much lower quality, which means that the Golden Screw will become recognized rather soon.
Sales and Costs Forecast
Table 10. Sales and Costs Forecast.
|B||Product/Service||1,25 x 107||1,25 x 107||1,25 x 107||1,25 x 107||1,25 x 107||1,25 x 107||1,25 x 107||1,25 x 107||1,25 x 107||1,25 x 107||1,25 x 107||1,25 x 107||1,25 x 107|
|C||Product/Service||1,00 x 107||1,00 x 107||1,00 x 107||1,00 x 107||1,00 x 107||1,00 x 107||1,00 x 107||1,00 x 107||1,00 x 107||1,00 x 107||1,00 x 107||1,00 x 107||1,00 x 107|
Personal Survival Budget
Table 11. Assumptions.
(e.g. Seasonal trends)
|Seeing that the product is going to be delivered to the organizations dealing with the production of equipment, no seasonal changes in the sales trends are expected.|
Cash Flow Forecast
Table 12. Cash Flow.
|Money in (£)|
|B||Funding from The Prince’s Trust||100||100||100||100||100||100||100||100||100||100||100||100||100||1,200|
|Funding from |
|Incomes from Sales||5,000||5,000||5,000||5,000||5,000||5,000||5,000||5,000||5,000||5,000||5,000||5,000||5,000||60,000|
|C||Total Money in (£)||7,300||7,200||7,300||7,300||7,200||7,300||7,300||7,300||7,300||7,300||7,200||7,300||7,200||97,200|
|Money out (£)|
|D||Loan repayments |
The Prince’s Trust
|E||Total money out (£)||1,500||1,500||1,500||1,500||1,500||1,500||1,500||1,500||1,500||1,500||1,500||1,500||1,500||18,000|
Costs Table: Direct and Indirect Costs
Table 13. Costs.
|Section||Monthly cost (£)|
|Gas, electricity, and oil||100|
|All personal and property insurances||5,000|
|Food and housekeeping||3,000|
|Hire charges (TV, DVD, etc.)||500|
|Subscriptions (clubs, magazines, etc.)||1,000|
|Entertainment (meals and drinks)||1,000|
|Car tax, insurance, service, and maintenance||200|
|Children’s expenditure and presents||500|
|Credit card, loan, and other personal debt repayments||500|
|B||Total costs (£)||11,300|
|Income from family/partner||10,000|
|Working tax credit||2,000|
|D||Total income (£)||20,000|
|E||Total survival income required (£)||31,300|
In case the company does not succeed in the target market, it can be suggested that the Golden Screw should try a more aggressive and direct promotion campaign. To be more specific, direct advertising should be used as the key method of attracting the target audience.
As far as the long-term plans are concerned, it can be suggested that the company should merge with a more powerful organization, such as the above-mentioned Orion Arabia and SARB.
Alternatively, the company may put all stakes on the development of a new brand product, such as a soluble screw for the operation that requires further removal of screws. After a well thought out promotion campaign, the organization will be able to propel itself to the top of the manufacturers in the target market.
Plan B Continued
Afterward, the company may spend more on advertising, thus, making sure that the company becomes easily recognizable and that people remember its brand name. As soon as The brand becomes a household name in the area in question, the Golden Screw will commence its operations.
The Golden Screw Company is far from being a one of a kind organization, yet it is unlikely to face a range of competitors in the global market. Nevertheless, the company must apply a flexible approach in its pricing strategy, at the same time putting a very strong emphasis on the significance of further evolution. The latter objective can be carried out once the leader of the organization adopts the transformative leadership approach.
Relying on the business model chosen means bringing the issue of stakeholder satisfaction into the limelight. Therefore, the Golden Screw Company will have to incorporate the Applegate and Collura Business Model, which places stakeholder satisfaction at the top of the company’s priorities list.
While the strategies outlined above can be deemed as rather efficient, one must admit that there is yet a lot to work on and to improve in the organization and production processes of the company, not to mention the necessity for a consistent update of the communication processes and the leadership model. Thus, it can be suggested that the company should adopt a flexible approach towards structuring its internal processes, as well as defining its relationships with its key stakeholders. Thus, the introduction of alterations may be carried out as painlessly as possible.
Al-Hassa city profile n. d., The Saudi Network, Web.
Applegate, L M 2001, ‘Emerging networking business models: Lessons from the Field,’ Harvard Business School, no. 9, vol. 108, pp. 172–194.
BAPP 2014, ‘Home,’ BAPP Group of Companies, Web.
Glover, D 2014, ‘Screws,’ How Products Are Made, vol. 3, no. 1, para. 1–22, Web.
Rejda, G E & McNamara, M 2014, Principles of risk management and insurance, 12th ed., Prentice Hall, Upper Saddle River, NJ.
Saudi Arabia Business Directory 2014, Welcome to Saudi Arabia business directory, Web.
WTO 2014, ‘Summary,’ The Kingdom of Saudi Arabia, Web.