Business Development and Value Creation
- EXECUTIVE SUMMARY
Table of Contents
EXECUTIVE SUMMARY 1
INTRODUCTION 3
BUSINESS PLAN 3
Business description. 3
Product and service description 4
Opportunity. 4
Company and team. 4
Market analysis 5
Marketing strategy. 8
Operations and logistics. 9
CONCLUSION 14
REFERENCES 15
- INTRODUCTION
Business development is defined as the activities which involve evaluating the different areas in order to accelerate the performance. It undertakes analysis which help in determining those aspects which need to be improved in order to grab new opportunities for rapid growth of the business in order to increase profittability (Priem, 2018). On the other hand, value creation is about undertaking the practices by which business value can be increased for the customers by selling products and sevices. Furthermore, stakeholders value is also increased by focusing on those stcok prices. This report is about touch sensor cars which are going to be manufactured by a new company “Shazam Automibiles” in London, United Kingdom. The main motive of this enterprise is to introduce cars which latest technology which can be sold at affordable prices. Furthermore, this report invludes business plan comprising overview of company, team opportunities, marketing activities, financial plans aand may more. Together with this, various analysis have been included which can helped the company to ascertain the competition, position in the market and similar segments.
- BUSINESS PLAN
- Business description.
The business is about cars in which touch sensor is embedded and the new company is situated in London, United Kingdom. This entity is planning to lauch cars with advanced technology at such a place which is approachable and one of the most popular locations in London. Shazam is the name which is going to make its place among the competitors by extracting the information about needs and demands of target customers in order to focus on them. Shazam is promising to provide the quality which is according to the customer’s and make the products available at different locations of UK (Prebensen, 2018). The company is focused on making electronic car as well with a view to curb the emission of harmful gases and other substance. This will be add to the main product in which touch sensor is going to be embedded. In addition to this, there are future plans of expanding the business to different countries for capturing huge market share and increase customer base. There will be practices and initiatives for keeping loyal customers by providing them quality goods so that positive feedbacks can be obtained for making the company survive in the competition for a long time (Ritter, 2018).
- Product and service description
Shazam is considering this new proposal for catering the needs of the customers so that they can get all the features in one car. There has been various incidencts in other automobile manufacturing companies in which numerous defects have been found. This is one of the major reasons for manufacturing the cars which can overcome these defects and increase the satisfaction of the customers. The products are going to be sold to the people living in UK who have high interest in cars which are technological advanced. Furthermore, the other reason for the same is to provide high quality products which can provide good experience to the customers which the company is targetting. The USP of Shazam, the products are within the price range which is affordable by large number of individuals as compared to competitors. Furthermore, it is focused in bringing new products which ca be liked by people in the category of milennials. The sole focus will be on increasing the customer value by providing them quality products which comprises of all the latest features and advanced technology (Porter, 2019).
- Opportunity.
The main aim of Shazam is to explore the opportunities and use them for the benefit of the company. For being liked by all the customers, Shazam is planning to bring different varients in touch sensor cars and to launch them at a price which can be afforded by every category of individuals (Toms, 2019). It is going to make plans which can help the company take advantage of the new products to attract the customers. UK government is putting efforts in making huge investment in tehcnology and automobiles sector for the growth of UK economy. Therefore, it is the right time to hit the market with new cars which fulfil the requirements of the customers.
- Company and team.
Legal structure of company: The organisational structure of SHAZAM auto-mobile would be based on the sole proprietorship which working with the several entities of local areas in order to increase new business venture in a the marketplace of UK.
Ownership: The new upcoming business organisation is introduced by a single person or individual named is Mr. John Smith who would be responsible for sharing all profits and loss of the new business as well as takes all decisions individually.
Advisory board: There are few members in the advisory committee of upcoming venture that gives specific directions and advice related to the particular field in which they expertise.
The management team: In a team of managing people for the effective management of upcoming new business that named SHAZAM auto-mobile would be required 5 people at initial level.
Expected contribution or role: The total composition of employees within SHAZAM auto-mobile would be include:
- Managing director: 1
- Marketing expert: 1
- Financial advisor: 1
- employees: 2
Expected salary of staff: The salary plan of all managing people are as follows:
- Managing director: 12000
- Marketing expert: 6000
- Financial advisor: 6000
- employees: 4000
- Market analysis
Industry analysis:
In order to analyse an industry and acknowledge the profits and revenue drivers for Shazam, industry analysis is very important. This will help the organisation in formulating strategies and plans so that high business advantage can be gained. In this context, porter’s five force framework is discussed below:
- Threat of new entrants: In case of car manufacturing industry, threat of new entrant for an established organisation like Shazam is very less. This is because Shazam is a renowned organisation which is successfully operating in market. Company invest very high amount every year in their products and business. For a new entrant, it is not possible to invent such high amount. Hence, this force is low in case of Shazam.
- Competitive rivalry: Industry associated with car manufacture is very competitive as most of the organisation are providing luxurious cars to their customers. Due to this, each organisation already has a loyal customer base. If Shazam will not provide required facilities and features to customers in their vehicles, other organisation can snatch away their customer base. Hence. This competitive rivalry for Shazam is very high.
- Threat of new substitutes: There is basically no substitute of car in market due to its high advantages like genuine price, safe travelling etc. Due to this, threat form this force is not very high. Even if a new substitute for travelling will be introduced in market, due to high comfort from cars, people are not going to replace it. But, in future to prevent environmental degradation, customers can prefer a substitute over Shazam vehicles. Then this force will became high.
- Bargaining power of buyer: This force is very high for Shazam as if customers of company are not satisfied with the products, it is not possible for Shazam to achieve their sales targets. This will also impact the revenues and profits of firm in a negative manner.
- Bargaining power of suppliers: As many car manufacturing companies are operating in market, it is not possible for Shzam to get all the required material and resources without the help of suppliers. This shows that bargaining power of suppliers is very high in case of car manufacturing industry.
Market research
Market research benefits a firm in analysing and evaluating market trends in a proper manner so that right product can be given to customers in a timely manner. Idea of introducing a touch sensor car is feasible in marketplace. This is because the primary research carried out by manager with the help of questionnaire states that people are in favour of using this innovative car.
Competitors analysis:
Main competitors of company are organisations like Ford, Bentley, Land Rover which provide luxurious cars to their customers. In order to overcome the threat of competitors, manager in Shazam can provide their products to the customers in less price than the rival firms. A slight decrease in price of product will benefits the firm in retaining their customers for maximum time.
Customer analysis:
It is the most important factor of launching a new venture as it includes the analysis of target market as it can be viewed that most of the youth of UK prefer advanced and touch sensor technologies so the demand of this kind of innovative technologies are high in that nation. Basically, upcoming business of touch sensor cars that named SHAZAM auto-mobile targeted youth population of UK linked with the segmentation of largest city as well as popular area of UK that is London.
PESTLE analysis:
| Aspects | Analysis |
| Political factor | Political condition of UK is democratic and stable that highly encourage innovative ideas and support the growth of new business venture. The governments of UK like local, national and European highly support entrepreneurs by providing grants such as Gigabit Broadband Vouchers, Apprenticeship and so forth. Whereas, in this nation, incidents of global wars as well as terrorism would be negatively effect on the new entrepreneurial businesses. |
| Economic factor | Most of the youth population of UK are price sensitive that would give an opportunity to SHAZAM auto-mobile in order to launch a new idea of touch sensor cars. Whereas, Brexit deal between UK and Europe possess threat related to the demand of products and services in UK. But the high disposable income of targeted customers would be beneficial for a new business venture in order to improve profitability as well as revenue. |
| Social factor | From the point of view of sociocultural prospective, the popularity of driving is rapidly increasing and becoming a commonplace for families. In UK especially London, youth population demands for advanced technologies in automotive sector so a company named SHAZAM auto-mobile would launched touch sensor detector cars or vehicles as per the trends and requirements of market. |
| Technological factor | Implementation of the technology factor is increasing with rapid speed. This determines that all the organisation in the auto-mobile industry are performing their work with the technological aspect. Therefore, it is also mandatory for SHAZAM to implement new and innovative techniques in its functions and operations. This results with better technological shift it is easy to make better cars in the future. |
| Legal factor | Their are various issue are faced by the organisation in the auto-mobile industry such as copyright issue, change in their shape, international laws etc. Therefore, to deal and overcome from the legal aspects of organisation it is mandatory for SHAZAM to monitor the the recent issue that is impacting on the performance of their cars. |
| Environmental factor | Carbon emission is the major issue that is faced by the auto-mobile industries and its organisation. It is one of the most serious aspects by which the environment and its factors are impacting. This results due to the carbon emission there are several changes are monitored in climate. So in last, with proper action and activities it is easy for SHAZAM and its management to formulate their products as per environment rules. |
- Marketing strategy.
STP analysis:
| Segmentation | The new upcoming venture of touch sensor cars emphasise on the population of UK mainly London, as they demands advanced technologies and models of cars. So new business venture segments the population of that nation and provides touch sensor car facility to them. |
| Targeting | In the whole population of UK basically the upcoming venture targets youth population as well as the richest and middle income level group of people who want touch sensor detector cars or vehicles. |
| Positioning | The new venture named SHAZAM auto-mobile positioned its vehicles to their customers by adopting effective strategies of marketing mix that attracts huge number of youth. |
Marketing Mix:
| Product | SHAZAM auto-mobile would be facilitating touched sensor detector cars that will be best meet as per the requirements of youth. |
| Price | While a business newly launched in the market then they would be keep affordable pricing strategy for their touch sensor cars which attracts the youth populations of UK as well as easily afforded by higher and medium income class of people. |
| Place | The location of upcoming business venture would be London that is the largest city of UK which have high population. As this helps in attracting the attention of more youth as well as acknowledged huge success in that marketplace. |
| Promotion | For promoting a new business idea in front of populations an entrepreneur of this venture would be choose social media marketing that includes Facebook, Instagram and so on and it will be highly approachable and used by the youth of a country and a best source of interacting with more people. |
- Operations and logistics.
What and who to deliver:
The enterprise is targetting to provide high quality products for providing higher satisfaction to customers by meeting their demands. In the context of Shazam, it is planning to launch cars with latest technology which are affordable and within the price range that the customers are willing to pay. Furthermore, it is also planning to provide good after sale services to customer so that they can have great experience (Usai, 2018).
Due diligence:
This company is going to operate at large scale and it can be highly complicated for it as there are number of processes and formalities which should be undergone through due diligence. There will be requirement for the company to appoint human resource who are capable of carrying the activities according to roles and skills. In order to ensure diligence, it can hire an accountant In financial due diligence analyse past financial information, sales and gross profit, rates of return on products, account variables, summary of stakeholders etc. In legal due diligence look towards the all copies of agreements and contracts like lease, purchase agreement, sales contract, articles of incorporation as well as trademark, patent, copyright and employment agreements (Chesbrough, 2018). Within the operational due diligence, determine customer patterns, business marketing, market analysis, research industry trends and business competitors etc. In the product due diligence, consider price, profitability, growth rate etc. in against of products which a business venture offers.
Risk management:
| Risks | Risk contingency plan | Risk mitigation plan by new venture |
| Financial risk | This may be introduced in upcoming venture as it is more significant for new businesses. The venture should emphasise on using effective budgeted instruments for making good items which will increase entire cost of Shazam. | For eliminating this circumstances, Shazam should emphasise on attracting large number of investors by presenting this innovative concept in order to get high investment (Apostolopoulos, 2018). |
| Brexit deal risk | It is confines in UK as the business venture should emphasise on keeping low cost strategy at initial level as it can attract more customers with respect of fluctuations in people disposable income. | The new venture Anytime Bakery Cafe should focus on creating large scale of operations so that the activities of business are not easily affected through Brexit deal. |
| Customer in-attractiveness | To reduce this kind of risk a business entity should emphasise on providing discounts and benefits that would help in increasing the customer attractiveness against the offerings of Shazam (Cardoni, 2018). | In order to eliminate this risk, Anytime should consider customers feedbacks related to their products and services. Through which a business would be capable to determine their expectations which they have from company. |
Operating and financial plan:
In the aspect of succession of any kinds of business, it is essential to make a financial plan so that effective allocation of resources can be done. For this purpose, budgets are prepared which help in order to make accurate projection of financial activities.
Suppliers relationships- The suppliers are those who provide raw material to businesses in form of cash and credit basis. It becomes essential for companies to maintain a better relationship with suppliers so that flow of business can be assured. Such as in the context of above business plan of advanced car lock opening, it is essential to company’s owners to make a better relationship so that efficiency of services can be assured. There are different way of enhancing relation between customers and suppliers such as making payment on time to suppliers. As well as it is obligation of suppliers to deliver goods on time.
Inventory required- In order running a business entity in an effective manner, it is essential to predict need of raw material so that services can be provided in a better way. Such as in the context of above business idea, the required materials are new and advanced software for opening car locks in an effective manner.
Manufacturing – It is a type of process which is related to making production of different range of outputs so that demand can be satisfied. Such as in the above business plan, the manufacturing of advanced cars should be assured on time so that more revenues can be earned.
Cost calculation:
Total units = 500 (assumption base)
Selling price = 65 pounds per unit
Fixed cost = 550 pounds
Variable expenses = 20 pounds per unit
Total cost:
| Fixed cost | 550 Pounds |
| Variable cost (500 x 20) | 10000 Pounds |
| Total | 10550 Pounds |
Projected breakeven point – Fixed cost / contribution per unit
= 550 / 45
= 12.22 in terms of units
Contribution per unit = Sales – variable expenses
= 65-20
= 45 per unit
Projected cash flow – A cash flow forecast displays the estimated sums of money that will go into a company along with what will go out as expenditures. This is a different thing than company profit; it is feasible for a company to make profit, but it still has a liquidity problem. Such as in the aspect of above business projection of cash flow is done below in such manner:
| January | February | March | April | |
| Opening balance | – | – | – | – |
| Cash in | ||||
| Sales (500 x 65) | 32500 | 32500 | 32500 | 32500 |
| Total (A) | 32500 | 32500 | 32500 | 32500 |
| Cash out | ||||
| Material | 1500 | 100 | 500 | 600 |
| Marketing | 5000 | 4500 | 450 | 5000 |
| Wages | 1450 | 1500 | 1470 | 1000 |
| Total (B) | 7950 | 6100 | 2420 | 6600 |
| Cash flow (A-B) | 24550 | 26400 | 30080 | 25900 |
Analysis of risk- Risk Analysis is a method that is related to recognize and handle potential issues that could disrupt core business initiatives or ventures. There are different types of risks such as:
- Credit risk – Credit risk is just the risk that the individual to whom a person have commended, i.e. the business or the entity, will not be able to repay debt or pay back principal on your debt payments then it is known as credit risk.
- Political risk – For developing economies, this is also higher. There is a possibility that the government of a country will magically change its policy.
There are different kinds of techniques in order to minimize the risk such as net present value model and many more. In the aspect of above company, this technique is applied for initial investment of 100000 pounds with discount rate of 10% such manner:
| Month | cash flow | PV factor | Discounted cash flow |
| 1 | 24550 | 0.909 | 22315.95 |
| 2 | 26400 | 0.806 | 21278.4 |
| 3 | 30080 | 0.751 | 22590.08 |
| 4 | 25900 | 0.683 | 17689.7 |
| 83874.13 |
NPV = 100000-83874.13
= 16125 (approx)
Contingency plan- The contingency plan is a strategy planned for a scenario other than the normal plan. It is used for managing risk for an unusual risk that, while impossible, would have disastrous consequences. In the aspect of above plan, there are some plan to minimize risk is demonstrated below:
- Avoidance of risk- The easiest way for an organization to handle its identified danger is to avoid it altogether. Avoidance occurs in its most severe form when a company refuses to engage in behaviors recognized or believed to pose a risk of any kind.
- Transfer of risk- In some situations, organizations wants to move the burden away from the company. Burden transfer usually takes place by paying premiums to a compensation company for cover against substantial financial losses.
Conclusion and balance scorecard:
Balance scorecard- A balanced scorecard is a tactical performance management tool used to define and enhance the various important functions and their subsequent consequences. Balanced scorecards are being used to assess and provide input to the company. In the aspect of above business, it can be used for managing overall performance.
5.2 CONCLUSION
It was inferred from the above report that, in order to install a new company enterprise, a businessman must research many concepts related to financial opportunities, competition analysis, consumer segmentation, market analysis and so on. In the first instance, an entrepreneur identifies their companies in terms of geographical areas, product descriptions and service details, in which their quality through comparison to the goods of their rivals should be analyzed, as well as using specific selling points for the attraction of new business offerings. After that proper financial planning is also too crucial for managing monetary resources.
5.3 Limitations and future directions:
In accordance of above planned business idea it can be stated that it may face some issues in competitive environment such as change in technology and many more. These can be overcome by making focus on new and advanced changes. As well as by keeping an extra sight of eye over their competitor’s steps so that more revenue can be generated in an effective manner.
- CONCLUSION
It has been concluded from the above report that in order to launch a new business organization an entrepreneur requires to study several concepts that are related to the business opportunities, competitor analysis, customer segmentation, industry analysis and so on. Firstly, an entrepreneur describes their businesses related to the geographical locations, product and service description in which their uniqueness should be analysed as compared to their competitor’s products as well as use unique selling points for the attractiveness of new ventures offerings. Also ensure the company and team in which structure, corporate body, ownership team members and their roles etc. are considered for introducing a new business. The opportunities should be identified in an appropriate manner as it reflects the business offerings according to the customers demand and requirements. In addition, analyses the entire market which includes industry, competitors, customers as well as market research that shows a clear view about the market conditions and environment and can ensure the business sustainability and growth. For analysing the industry of food and beverages entrepreneurs use porter’s five force analysis and evaluate all conditions, opportunities as well as threats of particular sector.
- REFERENCES
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