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The business idea is a Festival City. It is an exciting place for carrying out festivals that bring the world communities together to celebrate and have fun. It is something unique and new for Qatar and for the whole world in general. Every month there is held something different with a new theme. In January there is a BBQ, the theme of February is Sports and Health, the theme of March is Bazar, and the theme of April is Fashion, while May is Traditional. The theme of June is Bridge of hope (for disabled people and charity purposes), while in July there is conducted a Summer Festival, and in August – Desert and Chocolate festival. The theme of September is Back to school, and the theme of October is Global village. In November it is Art and Craft, and in December – National festival. The customers are able to buy different types of entrance tickets: for one hour, for the whole day, for three days, for a week and for the whole year. After buying the tickets, all entertainments, competitions, concerts, and raffles become free, as well as the swimming pool and one beverage and dish per day. All the rest will be provided for an additional pay. Festival City will be located in the suburbs of Doha, where there is enough place to install such wide-scale festivity.

The business is aimed at making money by selling entrance tickets, food and drinks, and providing additional services, space for rent, and advertising space. The sales are going to be big, approximately 250 million dollars per year due to the expected influx of people. The profits are going to be around 40 million dollars per month as it is needed to rent the area, pay salaries, buy products, etc. The potential for growth or expansion is that in the course of time there will be invited more and more famous stars, the quality of services will improve, and the location will be expanded.


The criteria of acceptance of the loan are the presentation of an accurate business plan which would include all the details including risks, costs, and benefits, and analyze all the aspects of the industry, showing that the loan is not given for nothing, and it can quickly bring profits. The criterion of acceptance is to meet the following business plan.

Market Analysis

Every year there are held many large festivals and events around the world. Such events draw not only a huge number of locals but also many tourists. It is a well-developed industry that can be observed in almost in every country attracting more and more people every year. The most popular festivals are Carnival in Rio de Janeiro, Chinese New Year, Snow and Ice Festival in China, The Festival of Colors – Holi in India, Diwali Festival of Lights in India, Festival of Burning Man in the USA, Flower Festival in Thailand, Chocolate Festival – Eurochocolate in Italy, and many others (“50 greatest festivals in the world”, 2011).

The principle of a festival had already been widely used in Greek theater. Antiquity did not know stationary and permanent theater. They were religious in nature. The phenomenon of a festival was originated in the Middle Ages in the form of theatrical performances – mysteries and carnivals. During the Renaissance, there could be observed a professionalization of creative activity. In this respect, the tradition of the festival as a form of artistic life was eliminated. The revival of the festival as a phenomenon of cultural life took place at the turn of the XIX and XX centuries. There occurred an internationalization of the global artistic market. Most of the currently famous and popular festivals appeared in 1950. Nowadays, they still constantly develop and expand (Webster, 2014).

An opening of new colossal festivals can influence the establishment and development of Festival City. They can grab the attention of the audience and customers by become accessible for them or offering something that will not be in Festival City. There are also barriers in terms of entering the industry. There are already a lot of festivals that have their own audience, so the task will be not simply to attract them. In addition, there are quickly developing festivals, so it is needed to always keep up with the novelties and the time. Moreover, since the global crisis of 2008, the world economy has suffered. There appeared too many poor people around the world. So, it can badly influence the Festival City, just because people around the world will not have money even to get to Qatar, not to mention having fun at the location.

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Market Area Characteristics

First of all, the Festival City will be located in the suburbs of Doha, the capital of Qatar. It will be the geographic market. Doha is the capital and the largest city of Qatar; thus, there is the largest population. It is a very hot country. Almost all the territory of the country is a desert, however, almost from all sides it is swept by the Persian Gulf. It is a Muslim country so the visitors must comply with the Muslim moral laws. Doha is a home to 50% of the Qatar’s population (including the suburbs – 900 545 people). At the end of 2015, all Qatar’s population amounted to 2,117,848 people (Central Intelligence Agency, n.d.). During 2015, the population of Qatar has increased by about 17,038 people. Considering that the population of Qatar at the beginning of the year was around 2,100,810 people, an annual increase is 0.81% (Central Intelligence Agency, n.d.). Most of the population have migrated from different countries and speak English. Near 20% of people are aged between 20 and 30 years old. These are the people on which Festival City is going to orient (Central Intelligence Agency, n.d.). Thereby, the number of potential customers from Qatar is 440 thousand. Besides, Festival City is open for people of the entire world. According to the World Fact Book, the number of people aged between 20 and 30 years old is 1.3 billion, out of which only 16% can afford visiting Festival City (Central Intelligence Agency, 2016). In addition, approximately 98% of the remaining number of people does not attend festivals for different reasons (too far, don’t like, etc.). Thus, totally the number of potential customers is 4.16 million people.

The Qatar’s economy is diversified and this promotes the development of the Festival City. It is not only an oil and gas producing country, but it is also a touristic country (every year thousands of tourists arrive in Doha), a sports center (in 2020 there will be held FIFA World Cup), financial and technological center, etc.

Thus, the Qatar is a great market to establish the Festival City. There are a lot of reasons for this: Doha is home to a great number of people of different nationalities; the population of Qatar is growing; it is the touristic mecca; Qatar’s economy will contribute to the Festival City’s development.

Competition Analysis

There is a strong competition in the Festival industry. In Qatar and around the world there are held a lot of festivals every year. However, they all are only indirect competitors of the Festival City, because they are only separate festivals on different themes. The Festival City combines all of them and introduces something new (e.g. Bridge of hope or Back to school). Thus, the indirect competitors of Festival City are Qatar Summer Festival, Souq Waqif Spring Festival, Qatar International Food Festival, as well as Eurochocolate in Italy, and many others. These are strong competitors because they are already well-known. In particular, the Qatar Summer Festival is held during the whole summer, compared to the Festival City which lasts only one month. At the Souq Waqif Spring Festival, living performances by famous circus actors from the entire world take place and it is free of charge. At Qatar International Food Festival there is a bigger variety of food and the entrance is free of charge. The Eurochocolate is mainly oriented on European people (“Eurochocolate 2014: Chocolate festival in Perugia, Italy,” 2014). However, these festivals also have weaknesses. They are not so creative and specialize only on something narrow. They also do not function the whole year round, being more oriented on younger segment, and generally, they do not provide what the Festival City provides. Besides, Qatar Summer Festival and Qatar International Food Festival offer higher prices.

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The pricing leader among the mentioned competitors is Souq Waqif Spring Festival because it offers everything for free. The remaining festivals do not charge the entrance fee, but the services inside are paid separately. The Qatar Summer Festival is the leader in terms of quality because at this festival everything is polished to details and provided at the high level.

The customers attend these festivals and buy their products and services because they are already well-known, being unique and interesting, and attracting the attention of people. Thus, the Festival City’s strategy to drag the clientele is to organize new and unique festivals that no one has yet seen, holding them all year round, and establishing justified prices.

Demand Analysis

The major customers of the Festival City are going to be young people, people living in the neighborhood, and people with middle income and above. Thus, the target market is the most active youth, men and women aged 20-30 years from around the world, and the target segment is people aged 20-30 years from Qatar as it is the nearest location to them. First of all, they are going to attend the location, because they can afford it. The population of Qatar is one of the wealthiest in the world. As for the rest of the world, there are many people who are rich enough to buy a ticket and arrive to the Festival City. Moreover, young people want to have fun more than anyone else.

The potential customers are people with high income, and people with such income usually wish to be provided with high quality services without paying attention to the price. However, the young segment usually does not care about the quality if the event is exciting and unforgettable. When buying a ticket for a festival or choosing from a variety of festivals, the potential customers choose substitutes rather than competitive ones. The reason is that people looking for entertainments look for the new and unique festivities that will bring them new emotions and impressions. For this reason, they buy tickets for substitutes. Thus, disregarding the level of entertainment at the festival and the quality of the services provided it will be a new festival so it will not influence the buying decision of potential customers. For some of them, it is important how far the festival will be held, but the rest love traveling and exploring new places, so they will look for festivals that can be combined with traveling.

Considering the number of target segment (400 thousands of people), and the total number of potential customers (4.16 million people), a daily entrance will be 200QAR or $60, and the yearly sales are expected to be nearly 249.6 million dollars. If to add sales of trading places, it will be totally nearly 250 million dollars. There are thousands of festivals around the world that earn billions of dollars every year, so it is almost impossible to estimate the market share in the world. However, in Qatar there are seven big festivals that attract hundreds of thousands of people, so they earn nearly 100 million dollars because they are not held all the year round. Thus, the expected market share in Qatar will be huge, nearly 75%.

Marketing Plan

The Festival City offers festivals all the year round. Every month there is going to be the new theme. In January, it will be BBQ, in February – Sports and Health, in March – Bazar, in April –Fashion, in May – Traditional Music festival, in June – Disabled People and Charity, in July – Summer festival, in August – Sweets, in September – School, in October – Village, in November – Art and Craft, and in December – Nation. At the festivals, there will be offered drinks and food, accommodation, entertainments, raffles, concerts, and live plays.

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There will be different types of entrance tickets: for one hour (adults – $30, children under $12 – 15), for the whole day (adults – $60, children under $12 – 30), for three days (adults – $100, children under $12 – 50), for a week (adults – $180, children under $12 – 90) and for the whole year (adults – $2000, children under $12 – 1000). When buying an entrance ticket there will be given a free coupon for one free dish and beverage per day. All additional food and drinks inside will be paid. There will be provided a place in a tent camp for $15. All the entertainments inside the Festival City will be provided for free. The trading place will cost $5-10 per square meter.

The Festival City is going to be widely promoted. First of all, the promotional plan starts from the Internet, as the target segment mainly searches for the festivals through the Internet. There will be created a website, which will contain all the useful information and the SEO specialist will be paid to promote the website in search engines. It will be promoted through Google AdWords and Facebook Ads. Moreover, the cooperation with popular newspapers, magazines, blogs and channels will be ensured. In addition, there will be made brochures, booklets, and cards about the Festival City that will be freely handed around. Besides, Festival City will stand as a sponsor of popular events around the world, which will provide the organizers with additional means of advertising.

The Festival City is going to operate directly, so the distribution will be direct. There will be no retailers (that increase costs) and the tickets will be sold only through the website and pay office near the Festival City.

Supply Situation

Suppliers of the Festival City will provide food, beverages, transportation, sanitary facilities, temporary structures, electrical systems, special effects and pyrotechnics, fire equipment, medical and first aid, waste disposal service, etc. The products from the food and drink suppliers will not be purchased, but the organizers will provide the trading place for them, and then the people will buy directly from them. The biggest food and drink supplier of Festival City will be Dunes Catering that has 25 years of experience worldwide (“About us,” n.d.). The sanitary facilities supplier will be Industrial Equipment & SVCS Co (IESCO). The temporary structures and electrical systems supplier will be Equipment Rental Solutions. These suppliers have been chosen because they provide cheap and quality products and services, they are well-known, and they are located in Qatar which is near the Festival City and does not entail additional costs for delivery.

There is no need for extra planning to ensure the access to critical supplies because these suppliers are open for new means of cooperation and new clients. To ensure access to critical supplies, the Festival City management should contact the future suppliers, negotiate in advance with them concerning the delivery terms, time, quantity, place of the delivery, and many other important things, and conclude the agreement. Thus, the necessary things will not be produced, because it will entail additional resources, time, and costs, which can be covered only in a very long perspective, and this is hard to afford. The production will be subcontracted to establish the Festival City and use services of reliable suppliers in Qatar.

Project Site/Area Location

As it has already been mentioned, the Festival City will be located in the suburbs of Doha. It is the capital of Qatar, and nearly half of Qatar’s population (900 545 people) live in this city. These are the potential customers because the location will be the nearest to them (Central Intelligence Agency, n.d.). Qatar is the country with the developed and diversified economy and with one of the biggest GDP per capita in the world. That is why these people can afford visiting the Festival City frequently. It is a touristic Mecca with access to the sea. For this reason, it is expected that tourists will visit the location too. Moreover, the major part of the population speaks English, thus, the tourists will not be afraid of traveling to the country where they will not understand anything. Besides, it is a country where it is warm the whole year round, and tourists do not often visit festivals when it is cold and snowy. In addition, Qatar is a politically calm country, so wars and revolutions will not be obstacles on the way to festival establishment.

There will be rented an area for the Festival City. Approximately 10000 square meters will be needed, which will cost nearly 65000 QAR (19 700$). By renting the area for the whole year, the organizers will have to pay only $236 400. In contrast, purchasing of the similar area will cost nearly 33 million dollars (“Land for sale in Doha, Qatar”, 2016). Only after 139 years of renting, this amount will be reached.

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The Festival City is going to be built from scratch. That is why a lot of different constructions and equipment are needed and they cost a huge amount of money. All construction work will cost nearly $200 thousand. Setting the scenes a month rent will be $20000, toilets setting and rent per month will be 1500$, covering installation and purchase will amount to $250 thousands, installation and purchase of lightning and apparatus will cost $3 million, installation and purchase of fencing and barriers will cost $50 thousands, installation and purchase of changing and make-up rooms will be around $80 thousands, installation and purchase of catering units will amount to $250 thousands, installation and purchase of modular buildings will equal to $500 thousands, setting parking will cost $100 thousands, while the remaining facilities will cost around $100 000.

All entities carrying on business in Qatar must be properly registered with the Ministry of Business and Trade. Every person and every firm performing engineering works in Qatar must obtain a license from the Engineering Committee. There should be obtained a license for holding an exhibition, Fire safety approval from the CDD, a loudspeaker license, and many others (Moubaydeen et al., 2014).

Operational/Human Resources Plan

The Festival City will have a product organizational structure. At the head of the company there will be a group of executives (directors), and all twelve themes of festivals will be distributed between twelve downline mini-companies. The type of business is a limited liability company. The organization is designed in such a way as to make people work effectively. A board of directors will control the activity of the twelve mini-companies, and all the responsibility will lie on the board. In mini-companies there are managers who control all the processes in their fields.

The management team will include CEO and a board of directors, each of which will be the head of the particular festival, HR Manager, Security Manager, Technical Specialist, and Marketing Manager. Within mini-companies there will be a group of tree managers (Creative, Client, and PR). The major outside consultants will be SEO specialist, market specialist, a legal adviser, and project engineer. In general, there will be needed nearly 125 employees at the beginning and 150 at the end of the year, and as the campaign is going to grow and expand, in the next three years, there will be needed nearly 200 employees. The employees of the lower rank will be from Doha. The specialists of the higher rank will be from developed countries of the world, as well as from leading companies of Doha. There will be needed employees to attend courses, seminars, and workshops, and the first two weeks of employment the lower rank workers will work on probation.

The board of directors should have at least ten years of experience on high positions in the leading companies in entertainment and must know English. Managers must have at least five years of experience in the field of entertainments, have leadership skills, and know English. The general workers must have one year of experience in their field and be professionals. Outside consultants are people who have more than ten years of experience and those who are well-known professionals in their field.

The employees will be compensated two times per month (in the middle of the month, and in the end). The general workers will be paid 1200$ per month, specialists that stand for lower managers – 2000$ per month, managers – 5000$, directors – 40000$, and outside consultants – 20000$. They will be also evaluated every three months through testing provided. Besides, there will be evaluated their performance by everyday control, for which there will be provided bonuses. The HR policies are an 8-hour working day, 5-day working week, safe working conditions, one-month vacation, no violation of rights, and bonuses for a good job.

As the company will provide services, not products, there will not be many inventories. For this reason, the inventory control procedure will be irregular, which will allow spending less time on inventory management and cut the expenses on it. In general, the Festival City stands for a reseller. The services are made to flow from the production to customer through the chosen location. For this reason, there should be the following steps in a business transaction: purchase of performers’ services which will be provided in the chosen area, and purchase of tickets by customers. Besides, the customer service programs will include sanitary, medical, accommodation services, as well as customer loyalty program and others.

Conclusions & Implementation

During the implementation of the business plan, all the steps will be taken gradually. At first, the investment will be received. Then, during the first month of functioning, there will be hired 125 employees (including outside consultants) and all the construction work will be done in the shortest time possible, the scene will be set along with bio toilets, cover, and all other facilities. The entertainment program will be well-thought and the company will enter into a contract with performers. The most important issue is to put a lot of reserves in marketing and strongly promote the chosen location. In one year the number of employees will be increased to 200 people. After three months of functioning, the company will expect to start earning money. Every month 2 million dollars will be paid out to investors, and by the end of the first year 22 million dollars will be paid. In a year, nearly near 250 million dollars will be earned, from which nearly 37 million will be net profit. After a year of operation, the Festival City will already become popular, and the earnings are going to be even higher. Thus, more popular stars will be invited, and better technology will be bought, while the area will be expanded. By following this plan, the Festival city will meet its financial goals, and in the three years of functioning, its profits will reach 15 million dollars per month.

Financial Plan

Pro forma income statement for the first year is in Appendix A. Two pro forma balance sheets opening January 31 and closing December 31 is in Appendix B. A monthly cash flow budgets for the first year is in Appendix C.

Break-even Analysis

Considering the 232.66 million dollars of total expenses (Appendix C) for the first year of the Festival City functioning, the point at which the revenue will be equal to spending considering that the revenue is also 232.66 million dollars. Subtracting from the total incomes, the incomes from sales of trading place, advertising places and tent places, the break-even point will be 232.356 million dollars from ticket sales. Thus, there should be sold 3.873 million entrance tickets to recoup all costs.

Sources and Uses Statements

In the beginning, it is needed nearly 24 million dollars to start the Festival City project. But it is the price to operate for only one month. That is why, to enhance the campaign, the funds will be nearly 211 million dollars. This includes the rent of the land for one year ($216.7 thousands), constructional work ($200 thousands), the rent and purchase of needed equipment ($4.56 million), salaries ($10.68 million), honorariums ($100), licenses ($1 million), marketing ($30 million), repair and maintenance ($10 million), free food and drinks ($20 million), pyrotechnics and fire ($10 million) and other facilities ($24 million). Own funds of founders equal to 1 million dollars, and are the sources of funds. Thus, the investment in the amount of 210 million dollars is needed. The investment is expected to be received from investors who will be paid out $2 million per week. Thus, in ten years the company will completely repay the investment. However, due to the high incomes, it can be done faster.

Financial Analysis

ROI=. Thus, the Festival City’s ROI demonstrates the profitability of 8.36%.

Net Profit Margin=. Thus, a share of profit attributable to each earned dollar by the Festival City is  million dollars.

Risk Assessment

Profit is always dependent on risk. Risk and profit are two interrelated and interdependent financial categories. In spite of the many strong sides, every business has its own weaknesses, and the Festival City is not exclusion. It has a huge amount of competitors on the market, though indirect. Festivals are held all over the world, and they already have its audience and customers. Moreover, the Festival City is located in Qatar, which is very far from the main audience (Europe and the USA). In addition, to start the business there are needed large investments, which can be hard to find, and a few years are needed to pay them out. Such kind of business requires many employees, which entails high payments of salaries, and misunderstandings between the team members. A lot of equipment is also needed and the equipment has a high degree of wear and tear. Besides, in the years of rapid development of technology, there is a threat that the company will not keep up with it and the growing customer demand. It is also very expensive to keep up with the development because it is needed to change the equipment from time to time, and have knowledgeable personnel. However, the development of technology is the opportunity to grow and expand. If the Festival City is able to keep up with the development (e.g. have the newest speakers that will have the best sound or the newest lasers), more customers will be attracted, and the Festival City will be the best on the market.

The risk can be managed, and different measures can be taken to predict the risk of occurrence of certain events and reduce risk. The contingency plan is based on the invitation of world stars and the best living performers that always attract the attention of a huge amount of people. To achieve this, it is needed to invest in PR department, and make tight connections in this sphere. In addition, another contingency plan is to lower prices and cooperate with airlines to make getting to the Festival City as cheap as possible. Concerning the investment, the contingency plan includes taking a loan from the bank. And finally, the last contingency plan is to dislocate the location for the Festival City to another place, closer to Europe or the USA.

To prevent the risks that can be encountered due to the natural disasters or accidents that do not depend on the organizers of the festival, the business should be insured on 1 million dollars that is categorized as other costs.

Conclusion

The business idea is the Festival City, which will be located in the suburbs of Doha, and where there will be held festivals on the different themes every month all the year round. There are a lot of competitors in the market, in particular in Qatar, but there are analogs that operate the whole year round and combine different festivals. The company will rent a land for $19700 per month near Doha because it is a favorable place where almost a half of Qatar’s population lives. There will be hired150 employees that will receive from $1200 to $40000. The marketing strategy is based on the promotion of the campaign through the Internet. The target segment is people aged 20-30 years from Qatar. It is expected that 4.13 million people will attend the Festival City during the first year which stands for nearly 37 million dollars of net income. To launch the business it is required to have 210 million dollars that are expected to be obtained from investors.