Industry Analysis of Business Plan: Cannabis Store in Edmonton
Opening A Cannabis Store in Edmonton
THE OBJECTIVE OF BUSINESS PLAN
The business plan must be linked with different objectives. It makes the whole business plan meaningful and precise. The appropriate goal of this business plan is to provide some strategies for the business to emerge stronger in the competitive Canadian market. Extensive industry and market analysis are helpful for the company to develop better business techniques. The business plan or proposal is a direction for the business management to idealize several business sections to sustain the business in the competitive market.
The objective of the business plan is to provide a program for the management to sell legal marijuana or cannabis successfully in different regions. Cannabis of sale is not pure, as it can also be used for different criminal purposes. The business plan provides a roadmap to the firm administration to form different competitive strategies and gain a competitive advantage in the Edmonton cannabis market (Charlebois, SimonSomogyi and Sterlingc).
The business proposal offers a systemic way of doing business, and it is one of the prominent objectives. The firm may start the business in Edmonton is a proper flow. Pertinent strategies and effective executions for both internal and external business processes can make the company successful. It is a fact that the Canadian market is entirely different from other countries. Business formation after legalizing recreational marijuana is natural. However, it may be competitive in the new business. Thus, the business plan comes up with a proper internal and external business layout to make the difference.
The essential part of the business plan is to articulate some goals and objectives of the business. It looks like a prominent business plan objective as well. Opening a cannabis store in Edmonton seems purposeful, as the firm wants to evaluate the medical use of cannabis and targets and the immense range of customers
Starting the business in Canada is quite risky due to stiff competition and changing industry trends. The objective of the plan is to identify key business risks for the managers to strengthen the business strategy. Based on these business and market risk, the company can plan accordingly.
Financial analysis, including current and future financial projections, is an important objective. For Instance, It depicts business feasibility. In Canada, the firm can create business boundaries due to these financial projections. The most important thing is to facilitate management to utilize its financial resources in an effective and lucrative manner.
Obtaining the potential product is not a single objective. The plan aims to elaborate critical traits of the future customer. In the marketing section of the program, the primary aim is to navigate prospective customers to set better customer strategies.
These are practical business plan objectives. Due to these objectives, it is an essential document for business management. A sustainable and successful business needs proper planning. Opening a cannabis store in Edmonton can be successful if the company meets these objectives effectively.
DESCRIPTION OF BUSINESS AND MARKET
Canada has legalized recreational marijuana, and it opened ways for different businesses. Legalizing the cannabis is purposeful in this country to enhance the visibility of medical marijuana and improved health care treatment. On the other hand, producers and distributors have depicted effective lobbying to create an impact on policymaking. This legalization has helped producers expand the business and produce more to meet the needs of the customer. Main products are dried flower, milled flower, plant seeds, oil, capsules, and pre-rolls. Also, high quality and designed edibles such as infused chocolates, brownies, introduced coffee, candy, cookies, and some beverages are the main products of the company. The firm aims to open a cannabis store in Edmonton.
The market contains different customer segments. For Instance, the target customers of the company are teens, young and young adults. It has been revealed that customers, including household, need cannabis in different forms. 4 plants per household must be allowed to meet needs (Austen, Porter and Bilefsky). The market is competitive, as companies are investing in the research and development process. Differentiation is a crucial market strategy for survival. Depending on the different needs and wants of varying age groups, the firm will develop and place the product in the store. (Austen, Porter and Bilefsky)
FIVE FORCE ANALYSES
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Bargaining power of buyers
The bargaining power of customers in this industry is moderate. The government, influenced by lobbying, has legalized marijuana. It is a new industry now, and people may contain some confusion when making big decisions. However, the medical use of cannabis has become the latest trend. The customer can find differentiated products from different companies. The bargaining power of customers is moderate because the product availability along with the standard and quality is still a prominent issue.
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Bargaining power of suppliers
The bargaining power of suppliers is high because firms are looking to focus on concentrated suppliers. Quality, standards, and prices are three significant elements in this industry. The management needs a supplier that can enable the regular supply of cannabis. The business will have limited options in this industry, and therefore, the bargaining power will be high.
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Threats of substitutes
The threat of alternatives is high due to availability. Even before legalizing the cannabis or marihuana, it was easy for criminals to sell marijuana. Now, after the legalizations, it can be used in different products to attract customers. The new business must differentiate the whole process from supply chain management to customer to reduce the impact of this threat. $730,000 pot products were sold after legalization, and it depicted the availability and demand (Ramsay)
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Threats of new entrants
The government aims to provide 250 licenses in the province. It is a great privilege for new arrivals. Thus, the risk of new entrants is quite high because these firms are capable of producing imitating and differentiation (Ey.Com)
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Competitive Rivalry
Aurora Cannabis Inc and Fire & Flowers Co. are two main competitors in this region. More than 17 stores have already been established to sell products. These are the main competitors, and some critical competitive strategies must be shaped to beat them and gain a competitive advantage.
SWOT ANALYSIS
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Strengths
The limited competition has become the main strength of the company in this region. Possibly, the firm can survive in this market and gain a sustainable competitive advantage. 49.4% males and 35.8% females used marijuana in Canada are using marijuana, and it indicates the customer potential (Statcan.Gc.Ca). The business is legalized now, and the firm can improvise accordingly to create a positive impact.
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Weakness
The biggest weakness of the company is the possible high process of the product. The cost of ingredients is high, and it can keep prices high. Changing people’s perceptions or preferences is tough. They still like to use cigarettes instead of cannabis smoking. Lack of advertising and promotions is also the biggest weakness in the competitive market.
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Opportunities
Business and product expansion are two opportunities in this competitive landscape. After starting the business and initiating the process, the firm must go to other provinces to meet target customers. Whole Canada depicts the demand, and the company must be the primary beneficiary in the market. However, some accounting measurements are necessary to integrate with the expansion opportunity (Downer, Cooper and Faseruk).
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Threats
People may not leave the black market, and it is a considerable threat to this legal business. Also, legalizing marijuana in Canada is a good move to meet medical needs. However, US travelers can take advantage and take it back to the United States. The US banned the use of marijuana, and it may make the business controversial (BBC.Com).
PESTLE ANALYSIS
Political
Canada is a politically stabilized country. Policymakers support legalized marijuana along with several awareness programs. This business gets government support and experiences sustainability.
Economical
Canada contains a robust gross domestic product, and it makes it one of the wealthiest countries around the globe. It depicts many free trade agreements with several countries. FTA will help us to interact with international suppliers.
Social
Median income of Canadian people is high. High educated men depict the high income in Canada (12.Statcan.gc.ca) One-third of the pollution is the working class. The literacy rate is high. People are quite aware of good and evil, and it can enable the excellent use of marijuana.
Technological
People are tech-savvy in this country. It has been revealed that the internet is an essential source for companies, educational institutions, and health organizations. Everything is connected in Canada, and new businesses must have to come up with advanced technological tools and equipment.
Legal
The legal process in Canada triggers lobbying. Flexible business and marijuana regulations have been made by policymakers. Lobbyist influenced these people to streamline business and health benefits (Canada.Ca). When legalizing anything in the country, lobbying can play a vital role in creating an impact. Legalized marijuana is a result of lobbying, and therefore, this business is going to start in Edmonton (Ramsay).
Environmental
Air pollution is the primary environmental concern for Canada. Due to strict laws, every business intends to reduce the environmental impact. Selling marijuana stores can also contribute to social health. For Instance, legal and healthy marijuana or cannabis must be promoted by the company to create a healthy environment. By integrating different Canadian context, the business may stay relevant and lucrative in the competitive market (Ey.Com).
Work Cited
12.Statcan.gc.ca. “Education and occupation of high-income Canadians. Stat Can.” Cannabis Stat Hub, 25 July 2018. Web. 22 November 2018. https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/99-014-x2011003_2-eng.cfm.
Austen, Ian, Catherine Porter and Dan Bilefsky. “Canada is Legalizing Marijuana. Here Are Some Questions, Answered.” New York Times. New York Times, 16 October 2018. Web. 22 November 2018. https://www.nytimes.com/2018/10/16/world
/Canada/marijuana-legalization-explainer.html.
BBC.Com. “Canada cannabis entrepreneurs ‘could face US lifetime ban’.” BBC. BBC, 14 September 2018. Web. 22 November 2018. https://www.bbc.com/news/world-us-canada-45478939.
Canada.Ca. “Health effects of cannabis.” Canada. Canada, 1 January 2018. Web. 20 November 2018. https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/health-effects/effects.html.
Charlebois, Sylvain, SimonSomogyi and Brian Sterlingc. “Cannabis-infused food and Canadian consumers’ willingness to consider “recreational” cannabis as a food ingredient.” Trends in Food Science & Technology 74.1 (2018): 112-118.
Downer, Pauline, Tom Cooper and Alex Faseruk. “Accounting, Taxation, and Auditing Issues Following the Legalization of Recreational Marijuana in Canada: Learning from the American Experience.” Journal of Accounting and Finance 18.6 (2018): 70-85.
Ey.Com. “How do you define your future in an undefined market?” Ernst & Young. Ernst & Young, 10 September 2018. Web. 20 November 2018. https://www.ey.com/ca/en/industries/
consumer-products/ey-canadian-licensed-producers-market-study.
Ramsay, Caley. “Alberta’s 5 Nova Cannabis stores raked in $1.3M in first 5 days of legalization.” Glonal News. Global News, 23 October 2018. Web. 20 November 2018. https://globalnews.ca/news/4587467/alberta-nova-cannabis-legal-marijuana-sales/.
Statcan.Gc.Ca. “Cannabis use by sex, lifetime.” Stat Can. Cannabis Stat Hub,10 October 2012. Web. 20 November 2018. https://www150.statcan.gc.ca/n1/pub/13-610-x/cannabis-eng.htm.
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