Business plan †CoViTek Essay

CoViTek is an Atlanta based company that vortexs a unique value added function to the $11 million dollars characterization renting industry. CoViTek pull up stakes revolutionize the industry by renting characterizations by dint of its characterization sell cars. These machines are already experiencing tremendous conquest in Europe, where they were invented. Customers leave now be able to rent tellys twenty-four hours a day, cardinal days a hebdomad in a quantifyly and good manner at the lowest price. Our machines hindquarters be implemented anywhere, even in emplacements that are not accessible to our brick and daub competitors, and we testament in that locationfore focus our efforts on all the strategic locations.Reve-lution Int. forget offer a unique business-to-consumer attend for the renting of videos and DVDs. The engineering, containing a fully automated organization, volition facilitate continuous term of a contract and re issue of moving-picture shows bridging the gap in the midst of video stores, who besides are up to(p) 15 hours a day, and attends such as the innocent Kozmo. com, who offer video delivery for a premium price. The company has a cost-per-action (CPA) determine structure. CoViTeks target customers leave alone complicate universities with a student body of at least 10,000 in addition to the placidity of the city of Atlanta for the premier(prenominal) six-spot months of operation.CoViTek depart pull up stakes their clientele with a complete set of integrated tools within the machine to make accurate and pleasurable purchasing decisions. CoViTek exit give video term of a contract customers the freedom of rental 24 hours a day, seven days a week, all course of instruction long. CoViTek get out take a crap the worlds truly low convenient and efficient rental schema Target Customers Movie rentals have proved to be an integral part of the unremarkable lives of the American population. With m ore than $11 billion dollars in rental sales in 1999, we acknowledge the aggregate demand for the video rental industry.Constantly seeking adjacent gratification, video rental stores want the virtually efficient and cost-effective methods of satisfying their customers. CoViTek depart make rentals simple by providing consumers the well-nigh efficient tools for with which to signize a rental process. With the killer application technology use in these machines, the customer exit be able to conduct multiple searches in order to rent the movie of their desire. CoViTek allow further assist them through the nourishment of an alive(p) preference search, which is currently beingness used by Amazon. com.This application will determine what the customer rented last and diagnose the preferred movies of that category the customer will like based on medieval rental behavior. CoViTeks potential customers will represent the bulk of video rental house indorses who value rental let onl et public toilet and flexible payment forges. CoViTek will tense up for the most efficient, cost-flexible payments and active searches for preservation of smell time. Market Growth Perspective accord to analyst Paul Keagan &type A Associates, at home movie wasting disease expenditures will increase approximately 40% by 2005 to $27 billion, almost triple the keep down spent in 1990.The vast legal age of these expenditures, about 83%, will be for video/DVD rentals and retail. However, movie consumption will also encompass pay-per-view and video on demand (VOD) useable through cable and satellite services. ikon action Companies Ninety percent of our videotapes will advance from one of the six major production companies 1. Buena Vista 2. Warner Bros. 3. Universal 4. Fox 5. Paramount, or 6. Columbia-Tri-Star The power of these suppliers is very postgraduate, as they hold the exclusive rights to the movies they produce.One of our late competitors, Kozmo. com, has create a un ique strategic alliance with these production companies. They have developed a profit sharing system with the major production companies requiring no initial coronation in the videos, but agreeing to give 40% of the revenue generated by the rentals to the producer of the movie. We deliberate that this profit sharing system is financially unattractive, although it will allow us to centralize our initial investment cost it minimizes our benefit which in turn will encumber our expansion strategy.We will use an initial video vendor, Video Bicicling, based out of Texas to supply us with our videos and DVDs. They will provide us with the most up-do-date movies for competitive prices. contention Differentiation CoViTek differentiates itself from its competitors in several(prenominal) account areas. While companies such as blockbuster and Hollywood Entertainment offer the aforesaid(prenominal) features, only CoViTek will incorporate all of the features described below in a way that gives consumers the ultimate ease of use, active preference search, and extremely convenient locations of operations. cartridge clip Availability CoViTeks competitive advantage is based on its time approachability for rentals. The machines will be open and available for usage 24 hours a day, seven days a week, all year round. CoViTek will keep customer service readily available even passim holidays. Strategic Locations CoViTek will implement the deal machines in key strategic locations aft(prenominal) performing a detailed demo-geographical out bourne of the city of Atlanta. Locations will initially be university c angstrom unituses and later the urban areas of the city.Each machine will be located in areas where there is heavy human traffic. meshing Flexibility Our pricing will be flexible depending on the amount of time the video is out. Since CoViTek is a system that is open 24 hours a day there are no late fees associated in our model. Our standard rental time for DVDs is midnight of the interest day for a price between $2. 50-$3. 00. Each supernumerary day will be between $1. 50-$2. 00. Video Cassettes will be $3. 99 and if returned within 24 hours $1will be credited back. Each additional day will be $1. 99.(establish on newfangled releases) Active Search CoViTek will use an innovative application technology which actively searches for videos categorized by title, actor, new releases, type of movie (action, thriller, comedy), and most oft rented movies. relation back Competitive Factor smash hit Video Hollywood Video Kozmo. com CoViTek Relative Product Quality and Differentiation i?? i?? i?? i?? flexile Payment Plan i?? E-commerce Based i?? i?? Brand science % 100% 63% 40% N/A Locations around campuses i?? i?? i?? i?? Locations on Campuses i?? i?? Large video selection.i?? i??Number of employees less than 5/ location i?? One of the most get aspects of the CoViTek model is its portability into untapped realms of video rental opportunities . This will provide the company with a critical advantage-the flexibility to transform itself in response to competitive challenges or to shifts in the video rental grocery store environment. CoViTeks flexibility will give downside safeguard to its owners by insuring that new, innovative means of generating exchange flow can be realized. succeeding(a) elements of CoViTek may imply National Expansion.Video rental opportunities in selected national markets such as Washington D. C. , Los Angeles, Miami and Huston. Washington D. C our second location has similar features to our first city of operation. It has a few immense universities, widely used public transportation, and high unglamorous traffic. The schools we target will be American University, George Washington University, and Georgetown University. Our downtown locations will depend on areas where there is an crossover of the public transportation lines and high pedestrian traffic. Data Distribution.Future plans may tak e the sale of CoViTeks proprietary online consumer selective information to the major video production companies. specialized Machine Content Another festering opportunity for CoViTek in the future is the execution of instrument of machines with customized video selection. The content of these machines will be select videos and DVDs targeted toward an audience based on specific themes. These machines will be determined in strategic locations based around their themes. Some possible themed machines may include classic movie machines, foreign movie machines with Spanish subtitles or dubbing, and award-winning movie machines.The placement of these machines will require heedful market analysis and planning, and therefore we plan to wait before performance to touch enough data about the market and the purchasing patterns of our customers. Investment Needs Michel Khoury flop of CoViTek, has accumulated cash in lavishness of $10,000 for the development and the start-up cost of the company. CoViTek is now watchful to encounter financing through establishing a line of credit and implementing an equipment loan for its initial machine. It will later apply for loans as needed in order to deprave more machines as it flip ones wigs its operation.Using the machines and earnings as collateral CoViTek should have comfortable funds to obtain a line of credit that will secure its implementation of strategy. The initial stage of funding will be used to complete Web-site development, obtain one machines, invest in figurer hardware and software, lease location place needed for the machines and market CoViTek during the first 12 months of operations. After 12 to 18 months of operation, CoViTek will require an infusion of an additional $15,000 to expand its brand image and increase its service offerings at an accelerated pace.Successful development and operation of CoViTek will allow it to be self-sufficient within approximately 9 to 12 months of initial operation. CoV iTek will be a for-profit company incorporated in the state of Georgia. CoViTek Start up costs Machines $20,246. 64 Inventory video tapes $9,210 change/ month $2,808 Advertising $8,000 Legal & Accounting $7,000 Insurance $3,000 TOTAL $50,264. 64 direction team Michel Khoury Chief administrator Officer Founder While foundation CoViTek, Michel Khoury is Assistant Managing Director at Bear, Stearns & Co. Inc.He is working hand in hand with the Managing Director of the company in order to implement a system of bringing foreign investment to the company. He has had significance experience with young ventures as he has participated in the creation of several companies nationally and internationally. Michel Khoury is also consultant to the chief executive officer of Santege Capital Asset Management pigeonholing in New York City. Michel Khoury graduated in May of 2001 from Emory University with a Bachelor of tune administration with concentrations in Finance, Consulting, Ventu re Management and Marketing.