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Music and Media Business Enterprise

iBus® - a new business venture for Apple Inc.

Studienarbeit 2009 50 Seiten

BWL - Unternehmensgründung, Start-ups, Businesspläne


Table of Contents

1. Executive Summary
1.1 Objective
1.2 Mission
1.3 Keys to Success

2. Company Summary
2.1 Company Ownership
2.2 Start-up Summary

3. Products

4. Market Analysis Summary
4.1 Market Segmentation
4.2 Target Market Segment Strategy
4.3 Industry Analysis
4.3.1 Competition and Buying Patterns

5. Strategy and Implementation Summary
5.1 Competitive Edge
5.2 Marketing Strategy
5.3 Sales Strategy
5.3.1 Sales Forecast
5.4 Milestones

6. Management Summary
6.1 Personnel Plan

7. Financial Plan
7.1 Important Assumptions
7.2 Break-even Analysis
7.3 Projected Profit and Loss
7.4 Projected Cash Flow
7.5 Projected Balance Sheet
7.6 Long-term Plan

8. References

9. Bibliography

10. Appendices

1. Executive Summary

iBus® will offer an exciting new service for music enthusiasts by combining the special features of an Apple store with those of an internet café. iBus® is a mobile entertainment hub that will tour all of the UK’s finest festivals and gigs. iBus® will be a magnet for the iPod generation of today, enabling customers to either download exclusive iBus® iTunes, surf the net or purchase first-class Apple merchandise.

iBus® is the answer to the abiding demand of new and creative music ventures. By collaborating with innovative brand leader Apple, iBus® is able to create an exclusive forum for communication and entertainment through the medium of public internet access. In today’s increasingly mobile society, fast and easy internet access has quickly become a necessity of life. However at most festivals, internet access is still a rarity, which would make iBus® the sole provider of this service. This fact, in addition to the significant demand of iPods and iTunes, presents iBus® with a chance to seize this window of opportunity and enter into a profitable niche.

This business plan is prepared to obtain financing in the amount of £341,000. The supplemental financing is necessary in order to purchase the bus with all corresponding equipment and facilities, to purchase office supplies as well as to have enough capital to cover all expenses required to operate business in the first year. Additional financing has already been secured in the form of £40,000 of personal savings from owners Richard and Susan Smith.

iBus® will be incorporated as a private company limited by shares. This will shield the owners, Richard and Susan Smith, from issues of personal liability and double taxation. The financing, in addition to the capital contributions from the owners, will allow iBus® to successfully open and maintain operations throughout the first year.

1.1 Objective

The following objectives have been set:

- The introduction of a new and exciting service for music enthusiasts all around the UK
- The presence of iBus® at all major festivals1 and live music events throughout the business year
- A growth in sales revenues between 15 and 25% per year

1.2 Mission

With the music industry always looking to wow its customers, iBus® proves to be the next ideal business venture. iBus® is a mobile entertainment hub that combines the special features of an Apple store with those of an internet café. iBus® is always on location first - in the middle of every popular music scene - waiting to welcome its customers.

iBus® provides customers with fast and easy internet access as well as with high-quality Apple-related goods and services. The company’s personnel possess excellent customer service skills and aim to provide consumers with an unforgettable experience by taking their music experience to the next level.

1.3 Keys to Success

iBus® Ltd. is a small and innovative business, which collaborates closely with Apple Inc. It aims to enhance your music experience by bringing the music you love closer to where you are.

The keys to success are:

- The provision of music at the scene. iBus® is always on location first; at UK’s finest festivals and gigs
- iBus® invites customers inside the Apple brand community, making it a “must” for Apple’s loyal consumer base
- An exclusive, easy accessible iTunes store on wheels

2. Company Summary

iBus® Ltd. is a new company that was formed because of a need in the marketplace. The company will collaborate closely with Apple Inc. by selling Apple merchandise and iTunes downloads on commission2. The extensive promotional effect of iBus® is of great value to Apple. Apple Inc. is an American multinational corporation which designs and manufactures consumer electronics and software products. Apple aims for nothing short of a revolution, whether in personal computing or digital media distribution. The company's desktop and laptop computers include its Mac mini, iMac, MacBook, Mac Pro and MacBook Pro. Apple scored a runaway hit with its digital music players (iPod) and online music store (iTunes). Other products include mobile phones (iPhone), servers (Xserve), wireless networking equipment (Airport), and publishing and multimedia software (Hoovers online, 2009).

Over the last few years, iPod sales numbers have shown dramatic growth, particularly in the quarter that encompasses holiday purchases. Up until today, more than 173 million iPods have been sold worldwide. All in all the iPod line has dominated digital music player sales, with over 90% of the market for hard drive-based players and over 70% of the market for all types of players in the USA alone (Macworld online, 1994-2008). The immense growth of iPod sales are further illustrated in Figure 1 below.

Figure 1: iPod Sales

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More than 3.4 million people visit Apple retail stores every week, demonstrating the immense popularity of the company’s merchandise. Furthermore iTunes Store has sold over 6 billion songs to date (MacDailyNews online, 2009). Mintel research in 2008 also demonstrates that the live music industry is booming. Over the past five years there has been a sustained increase in audiences for all the main genres of pop/rock, classical and jazz music. TGI data suggest that around 60 million visits are made annually to concerts with the music scene becoming much more localised, pushing its geographical reach further into the provinces. Mintel’s research also highlights some quite high rates of ancillary spend activity at concerts. Over one-half of concert goers usually buy drinks, one quarter usually purchase food and one fifth always like to buy souvenirs (Mintel online, 2008).

2.1 Company Ownership

iBus® is a private company limited by shares. Richard and Susan Smith, co-founders of iBus® Ltd., hold equal shares of 50% each. iBus® is a registered trademark at the UK Intellectual Property Office3.

2.2 Start-up Summary

The company’s start-up costs will cover the purchase of the bus including all corresponding equipment and facilities, the purchase of office supplies as well as capital to cover any and all expenses required to operate business for the first year. The initial marketing campaign will also be included in the start-up costs.

illustration not visible in this excerpt4 5 6 7

3. Products

The construction of iBus® is planned to be in line with Apple’s continuing efforts to become environmentally friendlier. Consequently the bus will feature a built-in solar cell on the roof, which will be activated mainly during the summer months. Moreover the bus will solely be operable with bio diesel. Please see page 37 for iBus® layout.

Goods and services

An impressive range of Apple merchandise can be obtained on the first floor8. The foreseen merchandise consists of the entire iPod range as well as various corresponding accessories. Significant festivals will collaborate to produce specifically designed festival merchandise such as special, festival-themed iPod skins and cases.

Figure 2: Merchandise - iPod range

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Figure 3: Merchandise - iPod accessories

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Internet (10min/£2) will be provided for customers via eight iMac stations, which are also situated on the first floor9. Six docking stations for iPods and mobile phones will be distributed throughout the bus enabling customers to charge their phones and iPods for free10. Twelve iTunes downloading termina]ls will be available for iBus® customers on the ground floor.

iBus® will be based at various music festivals across the UK throughout the year. A special feature of iBus® is the possibility to purchase exclusive live recordings11 of any of the festival’s concerts. The chosen concert can be purchased either as a video or audio podcast and must be paid for in advance at the cash point. Once the podcasts are available for download a unique code will be sent to the customers for quick and easy access. Single live tracks can be obtained in the same way12.

iBus® will be on location when and wherever there is sufficient demand only. In festival- free periods the bus will tour London concerts and events. Alternatively the bus can be rented as a party or promotion bus and could provide Apple with an ideal platform for corporate hospitality. The bus can also be transformed into a press centre for journalists.

4. Market Analysis Summary

Albeit the huge success iPods have enjoyed over the last few years, critics predict a slowdown in iPod demand due to market saturation. However some argue that “Apple tackled the issue of slowing iPod growth by introducing a new iPod with cell phone functionality which has reignited sales growth in the iPod segment”. “Apple could sell another 175m iPods as users upgrade to the iPod cell phone” (Seeking Alpha online, 2008).

Figure 4: Product Life Cycle

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X- The stage that Apple iPod is currently in


Taking this into consideration indicates an already large but still growing market for iTunes and iPod-related merchandise. UK internet users amounted to 41,817,847 (68.6% penetration13 ) in June 2008, making access to internet through public internet terminals vital in today’s increasingly mobile society. iBus®’s internet terminals allow customers to experience rich multimedia content on large screens. Furthermore most festivals are held in areas with limited or no internet connectivity, making iBus® therefore the sole provider of this service. This fact, in addition to the significant demand of iPods and iTunes, presents iBus® with a chance to seize this window of opportunity and enter into a profitable niche.

The live music industry in the UK is also considerable. There are numerous festivals and live music events throughout the year. According to Mintel trends in consumer expenditure at music concerts and festivals have and will continue to rise steadily until 2013 (see appendix 3). Moreover with festival ticket prices ranging from £115 to £160 and with over one fifth of people buying souvenirs, it is justified to assume interest and willingness to pay for iBus® goods and services.

4.1 Market Segmentation

The mobility of iBus® facilitates reaching the desired customers at any given time. iBus®’s customers can best be described as avid music fans, which are either at festivals, concerts or other live music events. They are technologically advanced and interested in all iPod- and Apple-related topics. They are therefore used to spending time and money on their digital music collection by downloading their music via iTunes. They are also familiar with the internet and desire a convenient way to access the internet away from home. Customers are located UK wide, are both male and female, and are primarily aged between 16 and 34. Students and young professionals with disposable income form the main target groups.

4.2 Target Market Segment Strategy

iBus® will be a magnet for the iPod generation of today. Festival goers will be curious to check out the happenings in the bus and will welcome the variety of options offered. They will be keen to purchase the one concert they just missed in form of a podcast or the song they just heard live as a download. Customers will also want to quickly check their emails or facebook accounts. Many will inform themselves about Apple products and buy the offered merchandise on sale. Moreover customers will be happy to take advantage of the free battery charging service.


1 See appendix 5 for foreseen festivals

2 A special arrangement has been made to facilitate the attribution of the purchaser’s key to the home computer and not to iBus®‘s downloading terminals





7 Apple Store UK 0800 048 0408

8 For a detailed list of merchandise on sale refer to appendix 2

9 As the popularity of the internet continues to grow, fast and easy access is quickly becoming a necessity of life

10 Only for paying customers - it is thought that batteries will run low when on a 3 day festival for instance

11 It is acknowledged that many people use their mobile phones and other devices that have camera settings to record concerts, however, these recordings are of comparatively poor quality

12 It is assumed that not all concerts can be seen during long, ongoing festivals. Hence missed concerts can be purchased via iTunes while still on location



ISBN (eBook)
ISBN (Buch)
809 KB
Institution / Hochschule
London Metropolitan University
Music Management Business Plan Apple Start-up Medien



Titel: Music and Media Business Enterprise