EXECUTIVE SUMMARY Hasbys.com is an internet based consumer deals website that features discounts on various produ cts and services within Ghana and across the world. It is the premier online platform where cons umers buy products and share experiences in their city. Hasbys, founded in 2014 by The Equivest Group Inc (an investment firm in New York), is the business sector pioneer in the daily deals industry in Ghana. The organization has demonstrated noteworthy development since 2014, now with around 150 thousand endorsers in Ghana and $820,000 of income in 2014. Yet, the industry itself is still new, with financial specialists waiting for Hasbys to demonstrate bottom line profitability. In the accompanying report, I have recognized industry wide issues and in addition issues relating particularly to Hasbys. Industry wide issues incorporate to great degree negligible boundaries to passage, exceptional rivalry, and an absence of separation among contenders' administrations, while Hasbys' issues base on productivity and verifiably, a dependence on endorser procurement for development. Right now, not even the most educated specialists can be sure of the noteworthiness of developing patterns in the everyday daily deals industry, so they have assembled a versatile, forward looking methodology that underscores forceful advancement and proceeded with exploration into best practices. Our first recommendation is that Hasbys begins plans to maximize profitability in the face of slowing subscriber growth. Much of Hasbys's growth has been reliant upon quickly expanding the company's user-base. While this has been a successful strategy in gaining market share and increasing revenue, it cannot be sustained at the same rate of growth and will not be a contributing factor in profitability. I have outlined specific steps I recommend Hasbys puts into action in the final section of this report Furthermore, I prescribe that Hasbys effectively differentiate itself on the market. The daily deals industry has demonstrated quickly expanding rivalry, and of the business pioneers, no single organization has offered an altogether preferred administration over the other. I propose a forceful system of ceaselessly revealing different changes to Hasbys' administration - three fundamental territories of center will be the move to a versatile stage, a Hasbys rewards program, and progressively focused on advertising. Hasbys must separate itself from the opposition, and so as to do this the organization must use its assets successfully. THE VISION Hasbys believes it can make the lives of people a lot better and more comfortable one deal at a time. As far as we are concerned providing cheap and affordable deals means we are changing the lives of individuals, families and communities with every item we sell. We are helping make their world a better place, make their living experience a little more exciting. Whether they are buying something as simple as a flashlight or as sophisticated affordable touch screen laptop or creating a gift registry for that special day in their life we want them to feel like they made the right decision in choosing Hasbys. MISSION STATEMENT: Not with our lips but in our Service to you. COMPETITOR ANALYIS BRAND NAME HASBYS TISU QUANTITY AVAILABILTY VALUE FEATURES 5 4 5 4 4 3 0 0 2 0 ZOBERSHOP AHONYA JUMIA 2 1 2 1 2 1 3 1 3 3 3 3 2 3 2 20 18 16 14 12 JUMIA AHONYA ZOBERSHOP TISU HASBYS 10 8 6 4 2 0 BRAND NAME QUANTITY AVAILABILTY VALUE FEATURES The main online competitors of Hasbys are Tisu, Zoobashop. They are as young as Hasbys, as much like the same but they have chosen different way to approach the market. Tisu is the biggest competitor right now in term of sale and market share in Ghana market as well as international market as they bought another deal site in Nigeria. Like every other players, they offer deal each day but provided with some minor options and also product group for special targets. On the other hand, Zoobashop is focusing on its customer database which allows company to analyze the productivity ratio for companies and merchant. In the end, they want to create better benefit for the whole value chain. TOWS MATRIX TOWS STRENGTH STRONG GLOBAL BRAND (S1) DIVERSE PRODUCTS (S2) STRONG FOCUS ON R&D (S3) APPLIED ADVANCE TECHN. WEAKNESS NO PHYSICAL PRESENCE OR STORE (W1) LOW PROFIT MARGINS (W2) LOW CASHFLOWS (W3) WEAK PERFORMANCE IN GHANA (W4) (S4) STRATEGIC LOCATION (S5) CUSTOMER CENTRIC VISON (S7) SKILLED WORKFORCE (S8) THREATS OPPORTUNITIES VERY COMPETITIVE MARKET(T2) GROWTH IN SOCIAL NETWORKING (O2) RECENT ACQUISITION ONS(O5) GROWING E- COMMERCE SALES (O6) INCREASED CONSUMER SPENDING IN Nigeria (O8) GROWTH IN MOVIE DOWNLOADS (O1) GROWTH IN INTERNET USAGE IN Ghana (04) GROWTH IN DIGITAL MEDIA(O7) PRESSURE GROUPS ON BEING ENVIRONMENTAL FRIENDLY (T4) HUGE DEPENDENCE ON VENDERS (T1) INVOLVEMENT IN PATENT VIOLATION DISPUTES(T3) (W4 + O4) = Review and improve on current strategy in Ghana (O8+O6+W2)=Tap into these in a bid to increase profit margins. (S1+S9+O6 ) = use such strengths to make sure as much of the new expected expenditure as possible is spent at hasbys.com (S2 + O6+ O8) = Keep diversifying to increase probability of predicted expenditure occurring on hasbys.com (S6 + S9 + O6) = Diversify into new markets via association 02 + S6 + S1 = Promote Hasbys com by such means. O5+ S6 = Combine these to gain greater market share Michael Porter's Five Force Analysis Threat of New Entrants--- High Internal Rivalry--- High Threat of Substitutes--- Low-Moderate Supplier Power--- Low Buyer Power--- Low ENTRY & EXIT Profitable markets will attract new entrants, which can reduce the profitability of existing players in the industry. Threat of new entrants is even more significant in markets where differentiation of products and customer loyalty are difficult to achieve. Hasbys operates in such a market. There are very few barriers to entry in the daily deal industry because the business is built upon a clever idea rather than major technological advancements. Almost all firms in this industry have very few patents significant to operations, which reduces the cost of entry. In addition, new entrants face virtually no compliance issues because the industry is new and highly unregulated. Moreover, the nature of the business determines that fixed assets, such as property, plant and equipment, are not necessary to establish a firm similar to Hasbys. Thus, the set-up cost of this business is so little that it attracts a large number of entrepreneurs. Lastly, little specialized knowledge is required to enter the market. In fact, the business plan is so easy to replicate that it only takes a short amount of time for market entrants to begin operations. The biggest concern for new market entrants is how to establish their initial customer base and merchant network. Because numerous players already exist in the market, many merchants have already set up daily deals with their select provider. Those merchants are unlikely to accept extra deals. However, new entrants usually will be able to build their merchant network by exploring new target markets based on market positioning and geographic location. Due to the ease of entering the market, Hasbys has faced increasing competition. Most likely, revenue growth will continue to shrink due to increasing options for consumers in the daily deal industry. This is why bottom line profitability is the number one priority for Hasbys - once Hasbys does show positive net income, it will be a continued struggle just to maintain profits without high subscriber growth. It is easy for firms in the daily deals industry to exit because the business has virtually zero fixed assets. Thus, the liquidation process should be fairly easy if a business is to be shut down. If an owner decides to sell their business, it would not be terribly difficult to find an interested party because the integration of merchant networks will probably generate economies of scale, or at least simply add merchants to a buyer's established network. INTERNAL RIVALRY The daily deal industry demonstrates extreme levels of competition. Hasbys's largest competitor is Tisu, which offers customers one deal a day via email for their local areas. Other competitors include Zoobashop, Jumia, and Ahonya. The competition in this industry is severe for a few reasons. First of all, it is very difficult for coupon dealers to differentiate their products. In theory, whoever offers the best discounts, best quality, and best selection of vendors should acquire and retain the most consumers. But with the development of websites such as dealsbay which aggregate the coupon deals offered by hundreds of coupon firms, it is very convenient for customers to compare the deals and choose the cheapest one. Because coupon deals offered by different firms are often nearly identical, it is almost impossible to create consumer loyalty within the current business model. This intense rivalry not only implies that Hasbys will have to continue to offer appealing deals, but has also resulted much higher marketing costs in order to attract consumers with many daily deal options. SUBSTITUTES & COMPLIMENTS The main substitute that threatens Hasbys and similar sites is discounts offered directly by merchants. These discounts are usually targeted at loyal customers who have purchased a large volume of products or services from one particular merchant. Essentially, Hasbys provides an easy to run promotional campaign for merchants. But if merchants with enough consumer interest are able to run these deals without the help of Hasbys, then self-run deals are a satisfactory replacement for running a daily deal through a third party. Merchant-run discounts may also be more lucrative for the merchant - there is no longer a third party taking a cut of the profit for providing the service of managing the deal's marketing, administrative, and logistical responsibilities. While it is difficult to identify complements of Hasbys, the relationship between Hasbys and the merchants it cooperates with is complementary. As the aggregate demand for participating merchants' goods and services increase, the demand for Hasbys is likely to increase as well. SUPPLIER POWER Since Hasbys is not a manufacturer, the traditional definition of a supplier does not apply in our analysis. However, it makes sense to consider the merchants in the Hasbys network their suppliers, because they provide goods and services that can be regarded as the \"raw materials\" for Hasbys's final product - deals offered to subscribers. Supplier power in this case is low first because there are many potential suppliers. One individual supplier does not have a strong influence on the price-per-deal Hasbys is willing to pay out to merchants, since Hasbys can easily switch to other suppliers. Furthermore, since Hasbys, just like other coupon firms, try to localize their deals, the merchants in the network are usually local and small in size, which also contributes to the low supplier power. On the other hand, although the suppliers have low bargaining power, they do have the absolute right to stay out of the game. This force Hasbys to offer deals that are reasonable to most merchants and requires that daily deals prove to be a worthwhile business investment for merchants in the long run. Some people consider advertisers the suppliers, because advertising is a critical component and input of the coupon business. For similar reasons as above, we conclude that supplier power is also low in this case. BUYER POWER We consider customers who purchase Hasbys as buyers. While an individual buyer has no bargaining power, meaning they can only accept the deals or prices offered if they choose to use Hasbys, they have significant power as a group. The entire customer base behaves in a nearly identical way, that is, their incentives are only driven by prices and quality. Thus, if Hasbys does not offer attractive prices, the quantity demanded will decline quickly. Since it is hard for Hasbys to differentiate products and retain loyal customers, customers might easily stop using Hasbys or choose their competitors' offers with no switching costs. Therefore, Hasbys has to respect the aggregate buyer power from the entire customer base. 1. Threat of New Entrants Low barriers to entry and easy to copy Low switching costs Low capital required Low regulatory restrictions. 2. Threats of Substitutes Many substitutes: paper coupons, discount websites, auction websites. 2. Competitive Rivalry Many players: e-business and also regular product service shops. 4. Bargaining Power of Suppliers: Increasing as number of players increases Choose the market themselves 5. Bargaining Power of Consumers Low switching costs Prices-Based deals: no brand loyalty, one time deal seekers and buyers High demand for better deals PESTEL ANALYSIS Pestle Factors Political Key Point Changes in business legislation in Ghana where Hasbys is doing business. Relevance to hasbys.com Increase in completion and sales as internet access and internet users go higher Tax laws Taxation of consumers on state levels, Corporate tax to be paid to government. Political Instability Consumer tax code for consumers. Government investment in ICT infrastructure Government law on copy rights, patent, proprietary info etc. Economic High interest rates slow Ghana consumer spending. The credit squeezes and inflation has affected consumer spending in the sub-region. However, consumer spending is rising in some international markets due to high economic growth in these countries. Reliable and quality of internet access Patenting on brand, services, copyright of systems etc. Hasbys.com might consider entering international markets due to easy entry barriers and high economic growth. More customer spending By 2011, 617 million family power meaning more units over the world will revenue and customers have a yearly extra cash surpassing US$5,000. 143 million of these will be in Asia-Pacific. Second just to Western Europe with 185 million. (Euro monitor International from national insights) Summary of PESTEL Political, Economic, social, Technological developments demonstrate an extending and engaging business division to be used by Hasbys.com. The worldwide markets have exhibited surprising improvement. The usage of web as a man to-individual correspondence channel has made new opportunities to be exploited. Likewise, as common care increases all around (Stern et al, 2006) it is basic that Hasbys.com's procedure reinforce naturally all around arranged activities. Hasbys.com's exercises moreover suggests that approaches/technique made should comply with the particular global lawful system Assess the competitive environment (analysis of the strengths of the competitors) Ecommerce commercial center is turning out to be all around exceptionally focused as section to this stage is simple and value, item and different variables separate one organization from the other. The significant contender against Hasbys.com is Tisu who had the greatest acquisition all around. Tisu qualities lie in cost and area. Its area in West Africa gives it an additional favorable position as most fabricates that offer in the Ghana have manufacturing plants there in this manner lessening the cost of the item. Tisu's model s fundamentally the same as that of Hasbys as they likewise have outsider shippers who list on their site. They likewise deliver all around. However certain approaches, for example, return arrangement, installment frameworks and Ghana customer spending gives Hasbys the edge. Competitive strategy The retail business is a mature and declining market. Hasbys has plot two fundamental destinations to guarantee its long haul achievement: reestablishing productivity; concentrating on its best individuals (most steadfast clients), and improve its money related adaptability through offers of store resources and financial specialist raising money. Hasbys has tackled a methodology of combining the business, by partnering bigger brands in Ghana and being the face of those brands in price. . Ahonya.com- Similar expense and broader thing portfolio (e.g. electronics, contact lenses and photo printing organizations). Kaymu.com - Wider thing portfolio and geographic augmentation SBU ANALYSIS Hasbys Cost of sales Marketing Technology Investment strategy increasing Maintain increasing Business level Differentiation(porter) Focus Differentiation(porter) THE VRIO ANALYSIS FOR Hasbys.com RESOURCE S HASBYS VALUABLE RAR E COSTLY TO IMITATE ORGANIZE D PROPERLY A Strong financial foundation Valuable facilities yes no Yes yes Yes yes Yes yes Competitiv e implication s Temporal advantage Economic implication s Sustained advantage Above normal normal Unique and innovative programs Effective management Experience and capable employees A strong relationship with its customers A strong relationship with suppliers A strong relationship with channels yes yes yes yes Sustained advantage Above normal Yes no YES no parity normal Yes no yes yes parity normal Yes yes no yes Temporary advantage Yes No YES no parity Above normal {at least for some time} normal yes yes no no Temporary advantage A strong brand reputation Efficient operations Demonstrate corporate social responsibility yes no yes yes parity Yes yes yes no no NO yes no Sustained advantage disadvantag e Above Normal (at least for some time normal normal Below normal DIAMOND MODEL Demand conditions The Firms strategy structure and rivalry The increase in competition National laws governing business and the management of such businesses. Rivalry leads to competitive strength Market buyers set fundamental parameters such as market segments, degree of sophistication, rate of growth and innovation. The Related and supported industries Factor conditions Skilled labor, access to technology and infrastructure. This will create competitive advantage with Tisu. Supply and distribution chain industries that are locally competitive. Cluster of related industries derives strength from their links Samsung, LG, Philips SWOT ANALYSIS STRENGHTS: Original idea -first mover in industry Biggest company in the daily deals market(large subscriber Base) Usage of both online and offline platform to sell User friendliness of website Employee Manpower Resources for innovation WEAKNESS Negative online reviews Emails perceived as spam Deals not profitable for merchants No creation of customer loyalty Reliance upon rapid subscriber acquisition for revenue growth Lack of differentiation Opportunities Threats : Develop website for phones and tablets Increase deal variety by enhancement of merchant experience Expand domestic areas Partner with Big companies Increasingly targeted marketing One time users Lack of deal personalization New entrants in the industry Huge competition Economic Slow down Waning customer activity Increase Number of Niche competitors STRENGTHS Large Subscriber Base: Due to Hasbys's astounding growth in the last few years, they have acquired a subscriber base much larger than their competitors. Clearly, this is a primary goal in the Daily Deal industry. On the other hand, it is unclear whether or not there will be significant first mover advantages in acquiring many customers quickly, as switching costs are currently very low. . Employee Manpower: Hasbys ended 2015 with over 42 employees. Considering it had ended the year before with just 18 employees, its growth in personnel was considerably larger than most companies in the industry. The process for facilitating daily deals with each individual merchant, however, warrants a high employee count. In order to communicate and establish satisfactory deals with individual merchants, personal contact is a must, and Hasbys has no lack of manpower. The rapid growth in numbers does however pose problems, which will be addressed in Hasbys's weaknesses. WEAKNESSES Reliance upon Rapid Subscriber Growth for Revenue Growth: Although many analysts expected Hasbys to show a positive net income for the first time in Q1 2016, the company was unable to attain that goal. As explained, Hasbys has not been able to grow revenues and display positive cash flow mainly through high marketing costs. The sustainability of this strategy is doubtful and is Hasbys's most glaring weakness in the long run, so the company must find ways increase profitability within existing market in order to show positive net income. Lack of Differentiation: Trouble differentiating is not just Hasbys's problem, but as a Daily Deal industry leader it is especially important in order to hold onto existing customers. Currently, products and services are continually being tested that will attempt to separate Hasbys's service from their competitors. Difficulties with Growth: Quality issues arose as Hasbys's employee count grew. Service failures were recorded, as well as deals that led to high customer and merchant dissatisfaction. The management of these issues became more difficult as more deals were being run and there were more employees requiring training and integration. Hasbys has dealt with some of these issues by increasing its customer service organization to over 10 employees and by releasing services to create a more user-friendly merchant OPPORTUNITIES Transition to Mobile: The opportunity to transition Hasbys to a mobile platform is promising, and has been a main premise of Hasbys's strategy moving forward. Hasbys App is a mobile application that would allow the purchase and use of same-day-deals according to the location of the user. Instead of purchasing a deal ahead of time, the mobile user will search for a deal on food or an activity that is both nearby and must be used that day. The introduction of Hasbys App is underway, but the effects have not been seen on Hasbys's income statement. The hope is that if there are enough deals and they are easily accessible, users will be more likely to use deals on a whim. Again, the opportunity of a transition to mobile is only possible because of Hasbys's large number of participating merchants. Increasingly Targeted Marketing: Making sure that the right deals are reaching the right customers is extremely important in converting marketing into sales. Hasbys has the opportunity to continue to attract subscribers and non-subscribers simply by providing a more extensive selection of deals. But more importantly, Hasbys must continue to provide a wide selection and be sure that deals tailored to each customer base somehow reach those customers. Of course, sending emails to customers based on their previous daily deal purchase history is a must, but Hasbys can take this further. Hasbys has a large subscriber base; they have the opportunity to use email to directly target those that may be interested in certain deals. This will require gathering more information on consumer trends and individual consumer preferences - an important part of differentiating Hasbys's service. Enhancement of Merchant Experience: As the number of merchants participating grows, it will be increasingly important to maintain a level of quality in daily deal offerings. One way to encourage quality merchants to join is by providing a quality experience for each merchant. Hasbys may need to consolidate its focus on those that are most attainable. This may mean a shift towards running deals with merchants that are more likely to benefit from a daily deal: experience goods or services, high margin goods or services, and newly established businesses that hope for an initial boost in customer awareness. THREATS Large and Well-Funded Competitors with Similar Offerings: Although Hasbys is larger than any competitors, there are a number of them that pose a serious threat to market share. Tisu is the second largest daily deal site, and Amazon Local has recently gained serious traction. Google Offers is also an example of a daily deal site that has no lack of financial stability. Because there are yet to be considerable differences between these deal sites in the consumer's eyes, they pose a significant threat to Hasbys's market share. Daily deal aggregators like deal bay allow consumers easy access to deals from all of these companies, further reducing switching costs for consumers. High Number of Niche Competitors: With minimal startup costs, it doesn't require a large competitor to take a bite out of Hasbys's profits. A high number of small daily deal sites tailoring to niche markets can have a significant impact. These smaller sites may even benefit from specialization - with a focus on a specific type of good or service, consumers who demand those goods may look to a niche daily deal site for more variety within a specific realm. Waning Customer Activity: As Hasbys's subscriber base grows, it seems that customer activity is declining. This may be due to a higher volume of 'lower quality' subscribers, or less active users. While the enormous increase in subscribers from 2014 to 2015 created revenue growth, bottom line profitability has yet to be seen. If customers continue to decline in value, it will make profitability even more difficult. STRATEGIC RECOMMENDATIONS Hasbys is facing significant obstacles that have pundits doubting the company's future growth prospects and financial stability. We believe that the company is at a crucial turning point - subscriber growth is slowing but they are not yet profitable. While subscriber acquisition has been important for revenue growth and in gaining a large initial share of the market, our recommendations take a different approach - we believe it is now time to pull back from an aggressive topline growth strategy and begin focusing on sustainability. Our main recommendations are to aggressively prepare for decreasing subscriber growth, increase current customer base activity, and continue to enhance the merchant experience. The latest drop off in growth numbers is large, and should be a signal to Hasbys that reliance upon extreme subscriber growth is no longer an option, especially since total subscriber acquisition costs have not significantly decreased over the same time period. There are two key steps that will help to increase profitability in the short run, and set the stage for long run profitability. In the short run, Hasbys must decrease marketing costs. Simply dedicating less revenue to subscriber acquisition will achieve this goal. As a percentage of revenue, I recommend a target percentage of revenue of less than 20%. Even after the most recent accounting adjustments, Hasbys would have seen a positive net income last quarter had the company achieved this goal. While the decision to decrease marketing costs will reduce future subscriber acquisition, we believe the benefits of decreasing costs outweigh the marginal loss in subscriber growth. For a longer-term chance at profitability, Hasbys must take steps to maximize profits by choosing the most effective strategies moving forward. It is difficult to definitively say what those strategies will be within such a new industry and without sufficient historical data. Therefore, we recommend Hasbys begin a project of data mining and intensive analytics on the following: -Highly profitable markets and their characteristics -The most successful categories of daily deal offerings -Empirical data on active subscribers -Results of new product/service testing rollouts As stated before, we believe that Hasbys's large number of subscribers, in itself, is a very valuable resource. In order to effectively engage more of their customers, Hasbys must gain a greater understanding of the drivers of subscriber activity - market characteristics, merchant types, and even subscriber demographics. Once Hasbys has a clearer picture of the most profitable segments, the company will be able to choose a distribution of subscriber acquisition costs that will provide a higher return per dollar spent. CONCLUSION Hasbys faces a competitive environment and financial challenges well beyond those of market leaders in other industries. Much has yet to be revealed in terms of consumer tastes and whether overall interest will increase, level off, or decline from both the consumer and the merchant side. We believe that there are a number of worrisome indicators in the daily deal industry that warrant an extremely aggressive strategy of product improvement and profit maximization, while continuing to provide a service that can be counted on by consumers and merchants alike. 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