Strengths and Weaknesses of Virt-U Inc. Business Plan

Question 1 :

Strength’s of the Business Plan

The VIRT-U business model can be assessed in numerous ways. The first such assessment can be the Opportunity.The business plan clearly states that the Online apparel is a $27 billion industry and that the online service is a $368.8 billion industry. There clearly is a large if not very large opportunity for a business such as VIRT-U because more and more people are now moving towards online shopping and businesses like Amazon are having an increase in their market share.Further more famous department stores like Macy’s and J.C.Penny have reported an increase in their online sale. With ventures like “At Lands End” which are completely online based, there definitely is an excellent opportunity for a software like VIRT-U, provided it is targeted properly and taken to these huge brands that would use such a software to benefit out of it.

The fact that VIRT-U will help decrease if not eliminate the merchandise returns is a strong point that VIRT-U will have to market on. It might be one of their strongest Competitive advantage. The creators behind VIRT-U have definitely “Thought Big” because with the quoted commission that VIRT-U plans to charge their clients(the famous department brands) times the total sale done by these online apparel brands in addition to the fixed fee that VIRT-U collects for every time an end user tried the service will easy add a lot of revenue to the company.The authors of this business plan have done a good job of presenting the actual statistics behind the apparel industry sales, the market share each of these brands have and an estimate of the annual online revenue of these brands.

The idea of not having a personal website but creating the VIRT-U platform and incorporating it in the retailers website is a smart move. The fact that users will only have to click on “Try-it-on” that will be visible on the retailers page which the end user is browsing will mean that the user will be able to see all the details of that particular apparel offered by the retailer himself and in addition to that the user may choose to use VIRT-U model to try on the apparel and see how it fits them. This again is a good move because it does not restrain the user from only using VIRT-U’s website for he might want to compare other products in the retailers website. This also means that VIRT-U would not need to maintain inventories, manage a website and update their website, promote their website.

They would only have to market their product to the retailers and supply with a propitiatory software that the retailers will input their products into and link the software in their websites.The fact that VIRT-U users will need to only create a one time user-login is convenient and also means that once they sign up with VIRT-U they can use the same login in different retail