Technology products business
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Table of Contents
TOC o “1-3” h z u Introduction PAGEREF _Toc412273444 h 3Business aim and objectives PAGEREF _Toc412273445 h 3Aim/goal PAGEREF _Toc412273446 h 3Objectives PAGEREF _Toc412273447 h 3Products and services PAGEREF _Toc412273448 h 4Products PAGEREF _Toc412273449 h 4services PAGEREF _Toc412273450 h 4Marketing research and potential growth PAGEREF _Toc412273451 h 4Identification of potential customers PAGEREF _Toc412273452 h 4Identification of market trends PAGEREF _Toc412273453 h 5Competitor analysis PAGEREF _Toc412273454 h 5Innovative marketing strategies to be incorporated within a Marketing Plan PAGEREF _Toc412273455 h 6Business strategies that will be adopted PAGEREF _Toc412273456 h 7Financial feasibilities PAGEREF _Toc412273457 h 8Sources of finance PAGEREF _Toc412273458 h 8The relevant legal rules PAGEREF _Toc412273459 h 8Use of information and communication technology PAGEREF _Toc412273460 h 9Potential risks and ways to mitigate these risks for future expansion PAGEREF _Toc412273461 h 9Risks PAGEREF _Toc412273462 h 9Risk mitigation PAGEREF _Toc412273463 h 9References PAGEREF _Toc412273464 h 9Appendix PAGEREF _Toc412273465 h 11Financial viability analysis PAGEREF _Toc412273466 h 11
IntroductionTechnology products business is a new online retail business expected to deal specifically with the ordring and selling of information technology products. The business will have its headqurter based in the in the United Kingdom. This paper is business plan proposal that reports the feasibility and viability of this business amid other competitors.
Business aim and objectivesAim/goalThe aim of this business is to maximise profit by expanding the market to various countries and other parts of UK where other competitors have failed to take advantage of.
ObjectivesTechnology roducts business wil have to meet anumber of objectives in order to attain the above stated goal. Firstly is that the business plans to carry out extensive online advertisement to create an early awareness of anae upcoming technology retail business. Secondly is that the company plans to achieve the largest market share in both UK and other neighbouring countries through healthy competition with other competitors. Third is to conduct extensive market research in order to be well informed about the strength and weaknesses of the existing competitors. Forth is to ensure that the products and /or services are sold at subsidised prices to atract more customers. Next is to choose the most reliable and suitable suppliers to provide continuous sypply of products hence ensuring that the business does not run out of stock. The business will also carry out acomprehensive and detailed assessment of the market, operational,managerial and financial aspects of business since this is abettet way of knowing the viability of the business (Zikmund and babin, 2012).
Products and servicesProductsTechnology products business will deal with ordering and selling of mostly information technology products such as laptop computers, desktop computers, printers, and other computer spareparts for replacements. Different suppliers will be used to supply these products in order to meet client specification needs.
servicesThe business will use its agents to offer repair and maintenence sevices at no cost for the first one month of product purchase. This ill also help in attaracting more customers. The agents will conduct these repairs at considerably lower cost after one month has elapsed from the time of product purchase.
Marketing research and potential growthMarket research and the achievement of potential growth will be ensured through identification of potential customers and market trends. As part of the objective, the business also plans to know its potential customers for the purpose of knowing how to serve and maintain them. The market trends will also play an important role of providing information on when to order more or less products depending on the seasonal demand.
Identification of potential customers Goodman, 2012 cited in (Thomas et al., 2014) reports that new young companies have found business plan competitions to be an opportunity to reach out to potential customers and to build awareness. Therefore, through proper planning and creation of awareness, Technology products business will ensure that it captures the majority of its potential customers from the United Kingdom and especially from other countries which the business plans to penetrate into. In addition these potential customers will also be capture via online advertisement to be carried out within the business website.
Identification of market trendsThe business intends to observe the industry norms in anumber of aspects of digital business strategies for the purpose of conducting surveys that measure trends Different industries vary considerably in market trends and annual fluctuations in their strategic posture. The trends in industry level of information technology investments in terms of sales will be expected to differ depending on season and region where sales is carried out. The technology product business will thus have to assess all the likely trends to be sure of all seasonal variations in the trends of IT product investment form different suppliers.. The identification of such trends will thus help the business to avoid unnecessary losses that may come as aresult of excessive product ordering in low seasons.It will also avoid the under supply of products during periods of high seasonal demands. The inclination to go by the trends of the industry dominates in the realative absence of clear guidelines concerning decision making process whereby internal difficulties are confounded with environmental uncertainity and volatility (Feeny, Lacity and Willcocks, 2012).
Competitor analysisA good number of competitors doing the same line of business seems to be having alot of strength given that they have stayed for sometime within the business. However, most of these competitors’s sell IT products that are expensive such that not all levels of income earners can afford. This is weakness that unless they realize, then it will be difficult for them to improve further on their market share even with United Kingdom itself. Secondly, agood number of competitors tend to concentrate in IT products from one particular supplier such that they cannot meet all customers‘ specification needs at all times. Another weak ness is that most competitors seems to be limiting their market penetration within UK and Europe without considering the larger Africa.
Innovative marketing strategies to be incorporated within a Marketing PlanThere are various marketing strategies that the business intends to employ in order to increase sales while at the same time taking adavantage of competitors. The first strategy is the use of customized standadization strategy which permits customers to chose their own set of product components there by specying their preferences for various hardware products as well as software. This strategy will ensure that customers get what they want as far as specificationsnof agiven product is concerned. The second strategy is the extensive online advertisement of the business and the assiciated products and their prices within the business website. This strategy is expected to contribute greately to the increase in the market share for Technology products business across several countries as comapared to the existing competitors. Next is the management strategy which starts with the relationships of specific business firm to their customers. In this case, customers continue to to be viewed collectively as agroup that shares common characteristics. As aresult, the business through its managers emphasizes on the benefits or advantages of economies of scale. There is alsi individualization strategy which managers consider as the as the surest approach to inceasing sales(Lampel and Mintzberg, 2012, Pavlou and El Sawy, 2010).
The business will also use the strategy of taking adavantage of the competitor’s weakness on high pricing of their products. In this case, Technology products business will sell its IT products to customers on relatively low prices which most customers can afford. Unlike, competitors, the busines will order and sell products that can be afforded by all income earners. In addition, the business will also expand to several countries where customers have no idea about some of the existing competitors. Where possible , there will be face-to-face interactions between the staff and the customers as part of strategy as away of creating further realtionship ans awareness between the clients and the business (Lampel & Mintzberg, 2012, Horner & Swarbrooke, 2012). Another strategy to be used is to improve further on the strengths of competitors. This will help the business to even gain more customers fro the competitor’s side.
Business strategies that will be adopted
One of the business strategies is the retail value based pricing strategy. This strategy will enable customers to buy produdcts at relatively ffordable prices. There is also the use of bidding strategy. This helps to increase savings when consumers make use of constant bid increment (Grewal et al., 2012). The business will also use the strategy of innovating where the competitors does not act since it is not enough to make adifference on aproduct quality or delivery readiness or on scale of production(Amit, Zott and Pearson, 2012).
There is also the strategy of business model innovation.This strategy has three design elements that makes up or defines the business model. The three elements are content, structure and governance. This implies that achange to any of these elements will amount to changing the whole business model. The business model will thus be adjusted by use of these elements. Content is the selection of activities to be performed while structure of an activity system is the description of how activities are connected in agiven sequence.. On the other hand, governance of an activity system represents the individual who carry out the activities (Amit, Zott and Pearson, 2012).
Busness model innovation is important in helping the business stay ahead in the product nnovation game. In this case, agood product that is embedded in an innovative business model, nevertheless, is less easily shunted aside.The business model strategy matters for anumber of reasons. First is that it is arepresentation of often underutilized source of prospect value. Second is that competitors might find it extra difficult to imitate or even replicate the whole novel activity system as compared to asingle novel product and/ or process. Given that it is frequently simpler to undermine or arode the returns of products or process innovation, the innovation at the level of business model can at times translate into performance advantage that can be sustained. Next is that since business model can be considerably a powerful competitive tool, the business manager will have to adjust the probality of the competitor’s efforts in the area. The operations cost saving startegy will also be important in ensuring that the profit is maximized in the business (Amit, Zott and Pearson, 2012).
Financial feasibilitiesThe finacial fesibility provides acomprehensive and detailed evaluation of financial aspects of the business project. The viability of the business is thus shown by the affordable finances. For instance, the operatioonal costs of this project is expected to be low given that advertisement which tends to cost more will be done online within the business wesite hence less cost will be incurred. It is also asumed that products will be ordered in bulk from suppliers, resulting to considerable discount which is expected to reduce cost of ordering. In overal, the reductions in cost implies higher profit (waechter and Thomas, 2014), Medda, 2012).
Sources of finance The sources of finance w include bank loans and partly personal savings to get the required start up capital.
The relevant legal rulesThe legal rules will include laws and regulatiions that governs the country where business is situated and the respective countries where customers come from. Different countries tend to have different rules and regulations governing the shipment of goods or products from foreign countiries. The busisness will ths have to adhere to such rules. In addition, since the business will also deal with software products, the laws governing software use such as malware related issues which may compromise end user insecurity through the network while attempting to access the business website . Others may include monetary exchange rules and legal uncertainties have discouraged other foreignretailers (Dourado, 2012, Mukherjee, Cuthbertson and Howard, 2014).
Use of information and communication technologyThe ICT will be used to achieve business objectives. This will involve the use of internet technology to conduct sales among individual buyers in the context of producta and pricing strategy(Amit, Zott and Pearson, 2012, Malhotra, Melville and Watson, 2013, Tafti, Mithas and Krishnan, 2013).
Potential risks and ways to mitigate these risks for future expansionRisksThe risks include hacking of business websites as well as failure to maintain high level of constant competition. With time in case the competitors get achance of knowing our tricks and capitalize on them. There is also perceived risk in e-shopping (Ahang et al., 2012).
Risk mitigationThere will he constant assessment of risks and developing an approach to comply with them(prahalad and ramaswamy, 2013).The mitigation process will also involve introducing new and better product and service provisions in order to continue generating revenue in future and encourage customer’s loyalty for future expansion(Klassen and vereecke, 2012).
ReferencesThomas, D, F, Gudmundson, D, Turner, K., and Suhr, D, 2014, Business Plan Competitions and Their Impact on New Ventures, Business Models, Journal of Strategic Innovation and Sustainability Vol, 10(1), 35.
Zikmund, W, and Babin, B, 2012, Essentials of marketing research. Cengage Learning.
Feeny, D., Lacity, M., and Willcocks, L, P,2012, Taking the measure of outsourcing providers. MIT Sloan management review, 46(3).
Lampel, J, and Mintzberg, H, 2012, Customizing customization. Sloan Management Re.
Horner, S, and Swarbrooke, J, 2012, Leisure marketing, Routledge.
Amit, R, Zott, C, and Pearson, A ,2012, Creating value through business model innovation, MIT Sloan Management Review, 53.
Grewal, D, Roggeveen, A, L, Compeau, L. D, and Levy, M, 2012, Retail value-based pricing strategies: New times, new technologies, new consumers, Journal of Retailing, 88(1), 1-6.
Waechter, G, D, and Thomas, D, 2014, Feedstock depot feasibility study for western north carolina.
Dourado, E, 2012, Internet security without law: How service providers create order online (No. 12-19). Working Paper.
Medda, F ,2012, Evaluation of Value Capture Mechanisms as a Funding Source for Urban Transport: The Case of London’s Crossrail, Procedia-Social and Behavioral Sciences, 48, 2393-2404.
Mukherjee, M., Cuthbertson, R., & Howard, E, 2014, Public policy and retail strategy, Retailing in Emerging Markets: A Policy and Strategy Perspective, 258.
Malhotra, A, Melville, N. P, and Watson, R, T, 2013, Spurring impactful research on information systems for environmental sustainability, MIS Quarterly, 37(4), 1265-1274.
Prahalad, C, K, and Ramaswamy, V. (2013). The future of competition: Co-creating unique value with customers, Harvard Business Press.
Klassen, R, D, and Vereecke, A , 2012, Social issues in supply chains: Capabilities link responsibility, risk (opportunity), and performance. International Journal of Production Economics, 140(1), 103-115.
Zheng, L, Favier, M, Huang, P, and Coat, F,2012, Chinese consumer perceived risk and risk relievers in e-shopping for clothing, Journal of Electronic Commerce Research, 13(3), 255-274.
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Pavlou, P, A, and El Sawy, O, 2010, The ‘Third Hand’: IT-Enabled Competitive Advantage in Turbulence Through Improvi-sational Capabilities, Information Systems Research(21:3), pp.443-471.Porter, M, E.
AppendixFinancial viability analysisAmount
Owners equity$50000
Bank loan$30000
Total capital$80000
Advertising cost$5000
Rent$1000
Salaries$20000
Purchases$60000
Toatal costs$86000
Sales$99000
Monthly profit$13000
The figures shown above represents monthly values based on the asuption that the business will start with order purchases of 30 laptop computers, 30 desktop computers and 30 printers from the supplier at the estimated cost of $1000, $500 and $500 respectively. It also asumed that all the stock will be sold at the end of the month where the evry laptop, desktop and printer will be sold at an average cost of $1500, $900 and $900 respectively. This translates to total sales of $99000 as shown above that when compared with the total costs gives an overal profit of $13000 on the first month. The business will employ two employees, asales person and asecrectary each to be paid asatrting salary of $12000 and $8000 respectively, totaling to $20000. This implies that the total profit per year will amount to $156000 which is more than the previous total capital.
If this annual profit is ploughed back to the business after paying back bank loan of $30000, then the business is able to increase the capital for the second trading year by approximately $126000 which may approximate to two and ahalf times the initial capital, implying that projected cash flow for the second year will result to profit amounting approximately to two and ahalf times the initial profit. It also means that the projected cash flow for the third year will be approximately double that of second year if the total capital is again ploughed back. This is aclear indication that this business is viable and sustainable.
NB: The total number of words in this paper =2221 exclusing references, table of contents, title page and the table of values at the appendix.
