Small Business and Enterpreneurship Specific Resources on Market

Question: Discuss about a Case study on Small Business and Enterpreneurship for Specific Resources on Market? Answer: Introduction This assignment is on the preparation of a business plan where an existing company will enter into the market with their new product and for that the company has to check their target market, segmentation, and their main competitors for which they need to do the research about the market in which the company will be launching their product. All this process has been done in the part one of this assignment. In the part two of this assignment the research study will be done in depth where it will be seen that what their strategies are when they are entering into the market and along with that they have to adopt the growth strategies and as they are production firm so they need to decide their operation policy and along with that they also solve the financial issues of the firm and also have to decrease the risk which may arise. Market Entry Strategy As it is already known that as a sanitary company and they are already in the market but they are bringing new product into the market and for that they need to target their market which is already been done in first assignment. Sanitizers are mainly used in the food industry as they have to keep everything clean so that they can maintain the hygiene factors and along with that they also have to keep the area clean and keep sanitary lotions so that people who are coming in those areas for having food they can also clean their hands (Weismann, and Peterson, 2014). The company has to go through promotion strategy which will help the company to make people know about their products. As people already know about their other products which are already in the market so the company has to bring some new changes in their promotional strategy which is make them different from their competitors who are also launching their products into the market and also the promotion need to be different fr om all the strategies which they had adopted when they had launched their other products into the market. So, when the company will launch their products at first they should bring the sample of those products and use in those place who are already using their other products i.e. in the food industry so that when the customers will go those food areas then they will come to know about the new item which has been launched in the market then after using the product they will get to know about the product and if they like it then they will buy the product. When the company will make entry with their new product into their market then they have to bring changes with the new products like the scent of the sanitization need to be of different and along with that the packaging should be different and the colors which are used for packaging should be different from their other items which are already launched in the market. Along with that the chemicals which they have used in their other p roducts that should be little different with many more new products as the ingredients in their new products so that they can shoe to the customers that what new they have brought in the market. They should give advertisements and placards about their new products so that people know about the products from outside (Agarwal, and Gupta, 2012). Market Growth Strategy After the sanitary company they have to keep growing in the market so that they can give a tough competition to their competitors, who are already there in the market with their products and giving others a tough competition. The company has to come up with different promotional strategy so that the customers gets attracted towards their products and buy their products seen their promotional strategy. After every certain period of time the company has to bring changes in their products by changing the style of their packaging of their product along with that they bring different but same products launched for the different people in the segregated market. Here the difference will be made in the same products like changing the color of the products or by adding some more new ingredients in that product or by changing their advertising style. The promotion component has a large contribution behind a companys growth. If the company does not promote well about their product then people w ont know about their product and then there will be no growth of their company as it is already known that behind the growth of the company there is a great contribution of the customers as if they by the products then they can tell others about the product then by listening them other people will also buy the products like this the company will gain profit and along with that their company will also grow. Along with the promotional strategy expansion strategy is another strategy which is being adopted by the companies for their growth strategy. Every company wants to expand themselves so that lot more people can know about their products and use them. At first they start expanding nationally so that they become well-known within the country and become one of the top brands in the market of that country then they starts planning how they will expands themselves in the international market as expanding in the international market is not easy. For expanding in the international market the company has to strategize many things. They have to plan many new ways and they think of different promotional strategies which they will require when they will expand in the new country because already in the international market other brands of the same product are already ruling in the country. So, the company has to think and strategize their plans in such a way that their promotion will bring customers attention towards their product so that people buy their product. For that they have to give free sample to the customers with other products so that customers use those products and show some interest towards those products (Boag, and Dastmalchian, 2015). Operational issues: Operational issues are the anomalies faced by a business in performing its task properly and judiciously. These issues rise due to deficit of some core factors or failure in implementing some stipulated rules. The squeeze business energy and also squeeze out business resources. The operational performance of a business gets affected due to the operational issues and impact execution of the strategies of a business. Operational issues are anti growth in natures. These issues are related to human resources, time, money, communication, government regulatory compliance. Human resources: Human resources of a business consist of mainly the management and the workers. They are a pivotal factor for keeping a business going on, earning revenues and maximizing profits. They are the most rational elements of a business. Each worker has a spectrum of responsibilities bestowed upon him. But operations may be hampered because of dearth of workers. In the food sanitation business expertise on part of the workers is a revenue earner. But shortage of workers would put extra pressure and extra responsibility upon the employer (Corsten, and Peyinghaus, 2011). When they are occupied with extra responsibilities, they may not have the expertise and time which affects operations. Time: Managing time correctly and utilizing time judiciously is a forte of a business.Specific activities of a business fall under a specific time frame. No business can flourish without proper implementation of time management. The time (working hour) for the food sanitizer workers are pre determined. Being unpunctual in reaching the targeted customer can create doubts in the minds of the customers. By word of mouth the food sanitizer company can lose prospective customers if they cannot manage time properly. Money: Money generates business for an organization. Excess money does not hamper but excess money earned by wrong means like evading taxes can be issues hampering operations. Dearth of money can hamper the business process. Money is a necessity needed for impending calamities in a business like depreciation and wearing out of equipments. To improve the infrastructure, money is required. For motivating workers, money incentive works as motivation. Communication: When there is a miscommunication between the organization and the customers, it becomes a communication issue. Government regulatory compliance: The main objective of food industries is to prepare and produce good food which is hygienic to be consumed. Government selects agencies which are bestowed responsibilities for setting food safety standards, conducting inspections of food firms, ensuring that those standards are met; inducing a strong enforcement programs for the food firms which do not follow the norms. Wastage issues:The resources used to produce food are wasted when food is wasted.Waste management strategies help in removing wastes from the industries. This is because the real cost of waste is more than what is perceived by the layman. the costs in waste management are costs of raw materials, labour costs to pick up wastes, transportation costs to reach the waste in dumping zones. So, waste amount should be reduced to incur fewer costs. Thus, waste is a operational issue. Quality issues: Quality issues are descriptions about processes in a business that can be improved. Management and control issues: Management issues may arise due to three causes. It arises when management hold employees accountable due to non-performance; not setting clear and meaningful employee objectives and not spending quality time with employees on development of their career. Work culture issue: Different persons belong to different cultures. So, their mode of behaviour, mannerism of talking and behaving shall be different. Asian culture does not advocate direct criticism of peers. They do not criticize workers in front of group. Delay issues: Delay issues may hamper the business operations as stipulated time value will be lost and transaction value will also be not recovered. Resources: Human resource: Human resource is the pivotal resource in a business. Human resource synchronizes other man, machine, plant, equipment and money. Missions and goals of a business organization are carried out by the human resources (Rainieri, C. (2014). They generate revenues for a business. They are the management, employees, partners, franchise, vendors, suppliers etc. Physical resource: Physical entity of a business is required for its proper establishment and identity. This resource is the costliest. These are adequate and proper workspace, marketing material, effective communication like working telephone lines, information system Financial resource: This is the pre requisite of a business. Financial resources can be gotten from the owners account. There are alternative finance facilities like loan from friends, relative, financial institutions. Finance can also be got from public and private source. Resources used in food sanitation: Compounds of chlorine Compounds of chlorine Sodium Peroxyacid Peroxide Carboxylic acid Acid anionic sanitizers Hydrogen peroxide QUATS Idophors Chlorine Dioxide Iodine Comprehensive and Accuracy Financial project: Profit Projection Category In $US Reduction of cost $ 90,000.00 Error reduction $ 75,000.00 Increased flexibility $ 10,000.00 Increased speed of activity $ 30,000.00 Improvement in management planning and control $ 25,000.00 Other $ - Total Tangible Benefits $ 230,000.00 Tangible One-Time Costs Category In $US Development costs $ 100,000.00 New hardware $ 21,000.00 New software $ 2,500.00 User training $ 2,500.00 Site preparation $ 3,500.00 Other $ 2,000.00 Total Tangible One-Time Costs $ 131,500.00 Tangible Recurring Costs Category In $US Application software maintenance $ 30,000.00 Incremental data storage required $ 1,500.00 Incremental communications $ 2,500.00 New software or hardware leases $ - Supplies $ 1,500.00 Other $ - Total Tangible Recurring Costs $ 35,500.00 Breakeven Calculation Break Even Analysis Costs of Existing System Year 1 Year 2 Year 3 Year 4 Year 5 Development costs $ - $ - $ - $ - $ - Additional hardware $ 45,000 $ 40,000 $ 35,000 $ 30,000 $ 30,000 Operation costs $ 20,000 $ 15,000 $ 26,000 $ 16,000 $ 18,000 User time during development $ - $ - $ - $ - $ - Maintenance costs $ 1,500 $ 1,000 $ 1,000 $ 1,000 $ 1,000 Total Cost of Existing System $ 66,500 $ 56,000 $ 62,000 $ 47,000 $ 49,000 Costs of Proposed System Year 1 Year 2 Year 3 Year 4 Year 5 Development costs $ 100,000 $ - $ - $ - $ - Additional hardware $ 24,000 $ 1,500 $ 1,500 $ 1,500 $ 1,500 Operation costs $ 3,000 $ 2,600 $ 2,500 $ 2,500 $ 2,500 User time during development $ 1,000 $ 550 $ 600 $ 600 $ 600 Maintenance costs $ 1,500 $ 1,000 $ 1,500 $ 1,000 $ 2,000 Total Cost of Proposed System $ 129,500 $ 5,650 $ 6,100 $ 5,600 $ 6,600 Monthly Cash Flow Forecasting Monthly Cash Flow Forecasting Benefits of option Year 1 Year 2 Year 3 Year 4 Year 5 Staff savings $ 45,000 $ 60,000 $ 60,000 $ 60,000 $ 30,000 Improved buying practice $ 7,500 $ 7,500 $ 7,500 $ 7,500 $ 7,000 Improved service $ 3,000 $ 2,000 $ 2,000 $ 2,000 $ - Total Benefits $ 55,500 $ 69,500 $ 69,500 $ 69,500 $ 37,000 Costs of option Year 1 Year 2 Year 3 Year 4 Year 5 Development costs $ 100,000 $ - $ - $ - $ - Additional hardware $ 24,000 $ 1,500 $ 1,500 $ 1,500 $ 1,500 Operation costs $ 3,000 $ 2,600 $ 2,500 $ 2,500 $ 2,500 User time during development $ 1,000 $ 550 $ 600 $ 600 $ 600 Maintenance costs $ 1,500 $ 1,000 $ 1,500 $ 1,000 $ 2,000 Total Costs $ 129,500 $ 5,650 $ 6,100 $ 5,600 $ 6,600 Net benefits/costs $ (74,000) $ 63,850 $ 63,400 $ 63,900 $ 30,400 Cumulative benefits/costs $ (74,000) $ (10,150) $ 53,250 $ 117,150 $ 147,550 Balance Sheet Assets Initial balance Year 1 Year 2 Year 3 Year 4 Year 5 Cash and short-term investments $55,000 $186,829 $169,704 $234,982 $319,819 $285,128 Accounts receivable 3,000 3,000 3,000 3,000 3,000 3,000 Total inventory 25,000 25,000 25,000 25,000 25,000 25,000 Prepaid expenses 0 0 0 0 0 0 Deferred income tax 0 0 0 0 0 0 Other current assets 5,000 5,000 5,000 5,000 5,000 5,000 Buildings $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 Land 100,000 100,000 100,000 100,000 100,000 100,000 Capital improvements 0 0 0 0 0 0 Machinery and equipment 100,000 100,000 100,000 100,000 100,000 100,000 Less: Accumulated depreciation expense 0 40,000 80,800 122,400 164,800 208,000 Net property/equipment $300,000 $260,000 $219,200 $177,600 $135,200 $92,000 Goodwill $0 $0 $0 $0 $0 $0 Deferred income tax 0 0 0 0 0 0 Long-term investments 0 0 0 0 0 0 Deposits 0 0 0 0 0 0 Other long-term assets 0 0 0 0 0 0 Total assets $388,000 $479,829 $421,904 $445,582 $488,019 $410,128 Liabilities Initial balance Year 1 Year 2 Year 3 Year 4 Year 5 Accounts payable $2,000 $2,000 $3,000 $3,000 $1,500 $1,500 Accrued expenses 0 0 0 0 0 0 Notes payable/short-term debt 0 0 0 0 0 0 Capital leases 0 0 0 0 0 0 Other current liabilities 100 100 100 100 100 100 Total current liabilities $2,100 $2,100 $3,100 $3,100 $1,600 $1,600 Long-term debt from loan payment calculator $80,000 $65,522 $50,320 $34,358 $17,598 $0 Other long-term debt $100,000 $200,000 $150,000 $175,000 $225,000 $150,000 Total debt $182,100 $267,622 $203,420 $212,458 $244,198 $151,600 Other liabilities 0 0 0 0 0 0 Total liabilities $82,100 $67,622 $53,420 $37,458 $19,198 $1,600 Equity Initial balance Year 1 Year 2 Year 3 Year 4 Year 5 Owner's equity (common) $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 Paid-in capital 250,000 250,000 250,000 250,000 250,000 250,000 Preferred equity 0 0 0 0 0 0 Retained earnings 0 6,307 12,584 28,224 38,921 53,628 Total equity $300,000 $306,307 $312,584 $328,224 $338,921 $353,628 Total liabilities and equity $382,100 $373,929 $366,004 $365,682 $358,119 $355,228 Financing: Use this area to capture key components of the Profit and Loss Statement and the Balance Sheet for the first year only. 1. Year-one revenue expectancy Number of units sold annually 2,800 1,200 1,600 0 Average sales price per unit $110.00 $80.00 $40.00 $0.00 Annual revenue per product $308,000 $96,000 $64,000 $0 Total year 1 revenue $468,000 2. Year 1 cost of goods sold Expected gross margin per product 50.00% 40.00% 25.00% 0.00% Annual cost of goods sold per product $154,000 $38,400 $16,000 $0 Total year 1 cost of goods sold $208,400 3. Annual maintenance, repair, and overhaul Factor (%) on capital equipment 15% 4. Number of years for straight-line depreciation 5 5. Annual tax rate 30% 6. If long-term debt is being used to finance operations, enter the total loan value. $80,000 Risks: The risks involved in materials handling are as follows: Physical hazards: Materials used in the sanitation of food industry can be harmful and can cause skin related diseases in the employees (Internal operation issues, 2015). Presence of foreign particles: There may be foreign particles in the food while sanitizing which may cause harm in the limbs. Presence of extraneous materials:These materials may be hair, fragment of bone which can hamper human health in due process of sanitation. Mishandling equipments: Equipments of sanitation may be misused by workers which may cause risk in intake of food. Mitigation: Training programmes: Training programmes should be initiated for workers to handle materials carefully. Visual inspection: Judicious visual inspection can help to mitigate risks. Consumer feedback: The working process must be in accordance to the consumer requirements and what feedback they give about the requirement. Conclusion In a nutshell is can be said that the company who are already existing in the market with their other products and is launching their new products then they have to go through all the steps which they had to gone when they have entered into the market with their first product and also have launched their other products. They had to strategize their entry into the market along with that they had to think about their growth in the market and for that they have make their financial and operation plans which they will be required when they will expand themselves in the national and international market. References Agarwal, R., and Gupta, B. (2012) Impact of firm specific resources on market entry strategic choiceAsia Pacific Journal of Research in Business Management,3(2), 1-12 Weismann, M. F., Buscaglia, C. A., and Peterson, J. (2014) The Foreign Corrupt Practices Act: Why It Fails to Deter Bribery as a Global Market Entry Strategy.Journal of Business Ethics,123(4), 591-619. 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