Conceptualizing a Business - Case Study Example

Conceptualizing a Business Conceptualizing a Business Connie Johnson of Phoenix February 2, 2009 Conceptualizing a Business 2 Conceptualization of business is an important aspect as far as entrepreneurs are concerned. The meaning of terms such as business, product/services, customers etc should be well defined before the start of the business. This business briefly evaluates the importance of business concepts with respect to the starting of a baby clothing store. Introduction Clothing stores are everywhere especially the baby clothing stores. Most of the parents like to have their babies’ well clothed compared to their own clothing standards. So they are ready to spend more money for their baby’s clothing requirements. More over the babies often spoil their clothes and the demand for baby clothes will always be there in the market. So starting a baby cloth store is a good business idea as far as market trends are concerned. Mission and Vision What business you in? What do you want to do? What are your commitments? What results do you want to achieve? The answers to these questions help shaping the mission and the vision. Shaping a mission and a vision helps the small business owner to remain focused and this will bring results in his work. The mission and the vision should be properly defined before the start of the business. The mission and vision should be fully understandable and viable to the customers since the customer is the Conceptualizing a Business 3 one who ultimately decides the success of a business. For example, baby cloth stores are everywhere in the market. The entrepreneur must define his vision in such a way that it should stand out from his competitor’s vision. Current and future vision of the baby store For a baby cloth store, their vision should focus on babies. The vision should offer complete comfort for the babies while using their clothes. The vision should include, a germ free healthy dressing habits to the babies. It should ensure protection for the babies from the changing climate conditions. Moreover the vision should ensure cheap price along with better quality of the products, as these are the two main factors mostly the customers are looking for. The future vision should be the leader in the baby cloth industry within the next 10 years. Ensuring sufficient good quality clothes for the future generation at an affordable price should be another aspect while defining the future vision of the company. Guiding principles No business can run effectively without implementing principles regarding culture, social responsibility, and ethics. The baby cloth store must study the culture of the customers where they are operating and based on that only they can decide what type of clothes required for their customers. The clothing habits of Indians and the Americans are different and hence the entrepreneur must study the population or culture before taking decisions about purchasing or making of baby clothes. For example, lot of multicultural populations with different dress codes is staying together in Conceptualizing a Business 4 America, or in Dubai. An evaluation of culture will thus helpful in taking decisions about the making of baby dresses. The entrepreneur must ensure the social responsibility of providing clothes for all the culturally different peoples. He cannot survive even in the American market, if he strictly adheres to the dress codes of America alone, if he is operating in a multicultural environment. Keeping of the ethical standards is essential for a business for the smooth functioning. If a customer returns a damaged cloth immediately after purchasing the shop owner must replace it. The entrepreneur should never engage in under cutting or spreading of rumors about the competitors. Importance of Strategic Planning and Management in the Business Environment Before the business starts running a business plan and a business strategy are imperative. Planning, organizing, leading, and controlling are the basic management functions of every business. In order to run a business successfully the entrepreneur should ensure that all the management functions mentioned above has been implemented properly. The business plan helps creating a mission and a vision for the company. The plan should contain all necessary details and actions that need to be taken in order that the vision comes true. The business plan should assess competitive forces such as competitors, new entrants, customers, suppliers and substitute goods or services. The plan should be capable of tackling all such elements effectively to stay in the business. In order to survive in the market, potential customers, suppliers, goods or services are necessary. Conceptualizing a Business 5 “Too many people think strategic planning is something meant only for big businesses, but it is equally applicable to small businesses. Strategic planning is matching the strengths of your business to available opportunities. To do this effectively, you need to collect, screen, and analyze information about the business environment.”(Strategic Planning) Proper understanding of the strengths and weakness in the baby cloth industry is required at the planning stage. Because of the vulnerability of business due to immense competition from domestic and international competitors, strategic planning is important to sustain in the market. The globalization made the jobs of strategic managers more complex because of the competition from all corners. Organizing of available resources to start the business is the second step. Identification of reliable sources is an important part of organizing. He must evaluate different suppliers to optimize and select the best available supplier list. Organizing also includes the selection of proper employees and preferred premises for the store operation. Infrastructure facilities such as power, water and transportation facilities also should be organized at this stage. “How will your business be organized? Will it be a sole proprietorship, corporation, or partnership? Each structure has advantages and disadvantages depending on your personal and business criteria. Outline the duties of all principal personnel in your business: who will do what? Do you have an operating plan or schedule for upcoming work for one to two years? Have you considered your insurance needs? “(Organizing a Business Plan) The third step is the leading process. Leading process is often done by the managers. Each section of a business has a manager and some workers. For example, Conceptualizing a Business 5 in a baby cloth store the chief executive holds the centralized control over all other segments in that business. The other segments include departments like purchasing, marketing, indoor sales, customer care, human resources, accounts, quality, stores, planning etc. For each segment there should be a leading person, mostly a manager. The manager’s job is to ensure maximum output of his department by effectively make use of the available resources. The manager should lead from the front and he should be a role model for the workers. He should be capable of advising the workers in all their matters related to their duties. Controlling of the business is the fourth step. Though each department is controlled by the managers, the chief executive is the one who is capable of unifying the department functions to ensure maximum productivity. The chief executive should take decisions when a conflict arises between the managers. He should ensure that all the managers and workers are functioning for the growth of the company rather than concentrating on individual benefits. For example, a purchaser can purchase cheap quality materials to impress the management regarding the price of the materials he purchased. But the quality department will never allow such violations as they know that such cheap quality materials will spoil the image of the business. Such conflicts must be resolved by the chief executive. He should take decisions regarding the price and quality of the materials in such situations. Market penetration, market development and product development are three other important strategies the entrepreneur must look into. In the current global economic crisis a business can implement market penetration i.e. it should focus on Conceptualizing a Business 7 attracting competitor’s customers. From the product development strategy side, the baby clothing store can attract more customers by offering an enhanced aesthetic appeal in its clothes and by increasing quality in terms of reliability. It may be also be the first to introduce new baby clothes models. The new trends in baby cloth industry must be properly evaluated. The Research and Development (R & D) wing is essential for any business to study the current and future trends and to develop new products. In addition, the business strategies should include plans on how to make use of the human, marketing, financial and technological resources more effectively. On the human resources side, the manager should develop employees’ skills and competencies. After having set up the strategies, the manager should prepare and implement tactical plans. These may be for example, an improvement in fulfilling orders faster, in improving systems and procedures to reduce stock level etc. Finally, the manager should diagnose and evaluate the results. If the results are not the desired ones then the manager must take corrective measures. These may be e.g. changing the mission and goals, reviewing the strategies, implementing new tactical plans or even changing the controls. Regular controls of the plans and strategies help the manager reducing deviations. Conclusion Conceptualization of business is the first step in starting a business. The conceptualization process involves all the business activities such as planning, organizing, leading and controlling. The business plan should be written in such a way Conceptualizing a Business 8 that it should cater the current needs and also the future needs. Keeping of good business standards will ensure the success of a business. The short-term benefits at the expense of ethical violations in business are short living while implementation of ethical standards will bring long-term benefits. Conceptualizing a Business 9 References 1. Strategic planning, Retrieved on January 27, 2009 http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/SERV_STRATPLAN.html 2. Organizing A Business Plan, Retrieved on January 27, 2009 http://ohioline.osu.edu/cd-fact/1101.html Read More