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Out and About

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One reason Out and About plc should go with the proposed new plan is because of the declining success of the firm. In recent years the market share and profits have declined by 15% due to competition from new competitors such as JJB and Argos. Therefore, it is necessary for Out and About plc to adopt a new plan as market research has shown that the new target market (extreme sports) is one of the fastest growing sectors of the outdoor activities market. Also, with Out and About plc currently losing 15% market share and profits, the UK extreme sports market is forecasted to grow 15.7% in market size by value, therefore this could result in a significant increase in profits, which is needed according to the state the business’s current profits are in.
A second reason Out and About plc should go with the proposed new plan is because it would create a whole new brand image for the business. Their current target market is predominantly middle aged and middle class or retired. Their new target market would be 16-30 year old interested in ‘extreme sports’. According to the data, the amount that these customers are willing to spend on extreme clothing is increasing, which could increase create higher revenues and increase profits. However, the current products which Out and About plc sells do not cater to the 16-30 year old target market. Therefore, with this target market having more disposable income, it would be sensible to accept the proposed plan.
One reason they should not go through with the proposed new plan is because the plan would require a massive change from what the current ethos of the business is. Their new target market and the products they would sell are very different to what their current target market/product is (new plan targets 16-30year olds, whereas current target market is significantly higher). Therefore sales may be a problem as only 10% of Out and About plc's proposed target market are aware of the company, as opposed with the current target market whereby 70% of them are aware of them. However, the view may be taken that the £14million marketing budget will raise reputation and awareness to their target market by extensively advertising their new extreme sports products to the younger market.
Another reason they should not go through with the proposed new plan is because their company is not reputable amongst the proposed target market (16-30year olds). The market research conducted showed that only 10% of Out and About plc's proposed target market are aware of the company, as opposed with the current target market whereby 70% of them are aware of them. Thus this is a problem as the 16-30 year olds are most commonly partaking in extreme sports, so if Out and About plc were to move into this new market, their established reputation with the over 55 market would not be rolled over to the 16-30 year old market. So if they were to accept this plan, it could end is failure as the 16-30 year old market are more likely to purchase from well known extreme sports brands, instead of Out and About plc. This could mean low revenues and could lead to them going bankrupt. It would also be extremely difficult for them to obtain 25% market share within the first three years.
In conclusion, I believe that although the proposal shows a lot of potential as the market for extreme sports is growing rapidly, they should not accept the proposal. One of my reasons for this being because of the large amount of redundancies and the change in HRM from soft to hard. These transformations would antagonise their employees and with 75% of the employees a part of employee groups, this could cause huge damage to the business' reputation, and would be very costly in terms of paying the redundancies. However, with the company's fall in revenues, I believe a new plan needs to be adopted in order to combat this and help them to increase market share, so they should explore different ideas of products to sell which aren't as diverse from its current market.

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