Factors the Success of the Business Depends on - Assignment Example

PART A AND PART B Contents PART A 3 PART B 5 Introduction 5 Discussion 7 ZARA 7 Netflix 9 References 12 PART A In developing a business idea for a new project there are several facts and figures that have to be considered. Developing a new business idea is not like a walk in the park and needs lot of thought. While coming up with an idea may be called a first step but the entrepreneurs have to necessarily check the feasibility of the idea before they decide to roll out the new idea in the market (Wetherly and Otter, 2014). The feasibility study should include a market research of the target market aiming to find the scope for the new product idea, dominant market leaders and their market share, nature of the competition, nature of the market in respect of whether it is new or mature or old (Thompson and Martin, 2010). After studying the nature of the market the next important step is to develop or modify the product idea in terms of addition of features or some services in order to have a competitive advantage in the market (Aswathappa, 2008). Deciding on the appropriate marketing strategy for the new product is also important and is to be decided based on the result of the research about nature and age of the market, type of competition present in the market etc (Annacchino, 2003). As a subset of developing the marketing strategy appropriate channels for the marketing activity should also be designed (Cullen and Parboteeah, 2009). When we as a group decided to develop a business idea the motive was to develop the not only based on profit but so that the idea does some actual good and helps the people and the society in a certain way. After the group members felt that all of us do agree on the business idea we decided to divide the task in hand amongst ourselves. While choosing the group members I decided to choose other members based on their like mindedness with me and their mentality match. After we decided to come together for the project we went through several stages of group behaviour. The stages we felt in the group formation and during execution were forming, storming, and norming, performing and adjourning (Robbins, 2013). Forming can be referred to the stage when we decided to come together as a group. When we decided to join the group all of us had one thing in common. We all knew each other very well and our mentalities matched. However the main problem arose when we decided to divide the task in hand among the group members. Another area of conflict among the group members was in the area of choosing a leader amongst us. There were lot of disagreements among the group members and it seemed at a time that it was probable that the group will breakdown with two distinct polar groups formed in the group. There was time when two distinct sub groups arose within the group. However the interesting part of the matter is that the conflict did not last long and in fact was beneficial for the group in terms of the fact that it gave us a clear leader. After a leader arose from the ensuing power struggle next stage was to divide the task in hand among the group members. It was well established and a proven truth for the group members by this time that the task in hand required a lot of research and too well directional. So the members of the group were to be divided and specific tasks needed to be assigned to each of the members. While assigning specific tasks to the group members their skills and expertise in that particular domain was taken into consideration. As a first stem we first needed to identify the particular company and product. We wanted to focus on a technology item that was a hot topic in the current market and could be designed to help the society at large (Barclay, Dann and Holroyd, 2010). After a few deliberations we decided to take the particular case of smart watch. We found that although smart watch market has many well established players of the industry it could be developed for a particular market segment which had remained unexplored and was almost a virgin market until then. We decided to take the basic smart watch add a few suitable functionalities to it in order to create a new version of the product for the physically challenged (Fuller, 2011). The reason behind choosing to develop the smart watch for the physically challenged was that it would benefit the society at large and the market potential of this market is huge with only deaf people comprising 8.7 million. Another fact that makes the market potential more attractive is due to the reason that the market is almost virgin and there is enough scope for the company to emerge as a dominant player in the market (Karol and Nelson, 2011). After deciding on the product and the market category next was to decide about the company. We decided to choose HUAWEI as our company because of the fact HUAWEI enjoys a good financial position and has a dominant market share that is experiencing a YOY growth at the rate of almost 58% per annum. HUAWEI already has a smart watch present and we decided to upgrade that. The product upgrade that we thought of included the use of a button in the watch which would specially benefit the disabled people. Although smart phone has a lot of different players with Samsung enjoying the dominant position with about 34% of the market share but the particular category of disabled people have remained unexplored. As a marketing strategy we decided to tie up with UK government with respect to providing financial support for the poor blind peoples to purchase the product. We hope that the product will be liked by all the people of technology loving new generation and will prove to be a useful gear for the physically disabled people. We hope to market this product through both direct and indirect ways. By direct ways we would like to use sales representatives, company website, Trade show/ exhibitions. By Indirect ways we mean to make use of retailers and focussing on target customers. We feel that given the look and feel of the new product and the market segment. PART B Introduction The entrepreneurial journey resembles the journey that is undertaken by the entrepreneur. The journey of an entrepreneur usually starts from translating the idea, dream, and passion of the entrepreneur into reality. The entrepreneurial journey is the way in which the entrepreneur communicates his/ her objectives; mission the experience that is gained by the entrepreneur. The entrepreneurial journey can be described with the model. Figure 1: Entrepreneur’s Journey Model The above model generally deals with the steps that an entrepreneur adopts towards its attainment of success. The journey of a sustainable entrepreneurship mainly includes the 3s that is success, survival and sustainability (Harper, 2005). These three elements are very important as it requires hard work, patience and sacrifice of the entrepreneur. For the successful completion of the journey by the entrepreneur it is essential to have the ability of taking risk, enduring, differentiation and a definite mind set. The entrepreneur has to face risk as while starting the business the entrepreneur are not aware of the various risks that is attached to the business (Trainor, 2005). Here in this entrepreneurial journey the entrepreneur of the two companies that is Zara and Netflix has been selected for discussion. Reed Hasting is the founder of Netflix which provides online streaming service at rent. Amanico Ortega is the founder of Zara retail. Discussion ZARA For any journey there are four important elements that are required to succeed differentiation, agility, risk taking ability and endurance (Cunningham, 2014). Zara was founded with the same view and that is the reason it has succeeded for so many years and is regarded as one of the largest store worldwide. Zara does not subscribe to the concept of marketing. In fact it does 0 marketing of its products and services (Roy, 2010). Zara founded by its founder Amancio Ortega in the year 1975. Since its first store was opened in 1975 Zara has expanded its operation to almost of all countries of the world and it owns all the stores in all the different countries (Berfield and Baigorri, 2013). The Retail chain is now present in 88 countries around the world. Ortega was the youngest of the four children of his father. Ortega started working in a company called Gala from the age of 13. Ortega founded Confections Goa in 1972selling bathrobes which were skewed by thousands of local women who were grouped into cooperatives. Ortega founded Zara in his bedroom by selling bathrobes (Mokadi, 2009). After watching the film Zorba the Greek the name Zorba occurred to him. But in his locality there was a pub with the same name. So the pub owner came up to him and said that the customers would be confused if there were two different stores with the same name Zorba. Therefore, Ortega decided to change the name to Zara after that (Chernett, 2010). Ortega likes to keep a very low profile and still has his coffee from the same coffee shop that he used to have earlier. He eats his lunch with other members of the company at company cafeteria. When Ortega decided to take his business outside Spain to other countries of the world, he decided that he needed to include some differentiating factors in his business that differentiated his business from competitors and provided the customer value at the same time. To achieve this Ortega decided to beat his competitors in respect of time (Badia and Badi, 2009). Zara decided that it will use least time to ensure the delivery of latest fashion trends to its customers and thus ensure that creates an unsurpassable lead over its customers. To achieve this end Zara decided that it needed to control 5 key areas of its business namely: production, pricing, retail, imaging and distribution (Tungate, 2012). By being able to control these 5 key areas Zara was able to ensure two things in particular. It was able to reach new fashion trends to its customers quicker and was able to provide quality goods at lesser prices. Zara’s controlling of the distribution enables it to deliver items faster to its customers than its competitions. By controlling its production Zara was able to produce quality items. By controlling pricing Zara ensures that the goods are priced and labelled well before they are offloaded into the soft floor. By controlling the retail chains Zara is able to create an image of the company that is same in shops and same in stocks. While for most of the company time is seen a scarce resource Zara sees time as a competitive advantage. While most of the companies in its segments take a lead time of 6 weeks Zara takes only about 2 weeks. Number of items it produces ever year is almost double or more than that of other retailers. Zara wants to ensure that every individual will eventually say that everything I own is from Zara. Zara feels that a fashion oriented company should always have a lookout and a keen eye for the latest trends that are shaping the market. The company feels that the retail store should always look in the streets, in the fashion magazine to keep an eye for the new trends that are doing the rounds and incorporate them in the fashion trends available to the customers in fastest time (Duncan, 2014). When Zara decided to expand its business outside Spain and it took risks to manage the business on its key motive that is to ensure lesser lead times. To ensure lesser lead times and at the same time giving its customers quality goods at low prices meant that Zara had to invest more in its supply chains. Zara had to take this risk in order to reap some gains in future and the good thing is that its risks have paid off. Zara also does a thing which its competitors like UCB and Uniqlo voids. It invests no amount in advertising. It spends that money in opening new store. Zara also goes against the industry trend in transporting new fashion trends to low cost countries. Netflix Reed Hastings never thought as a student that he will become an entrepreneur (Cohan, 2014). Hastings early years was spent in serving the Marine Corps and Peace Corps. Hastings in the meanwhile graduated from Bowdoin College. After leaving the service of Peace cops Hastings worked as a math teacher for two years before doing his post graduation from Stanford in programming. Hastings liked his programming coursework at Stanford very much and considered it as a hobby. Hastings feels that his stint as a peace corp. actually prepared him for his entrepreneurial journey because of the challenges that a peace corp. has to face (Pride and Ferrell, 2008). After completing his masters Hastings first job was at Adaptive technology. At Adaptive technology he learned the importance of focussing and doing a single job correctly than to focus on two jobs at the same time and lead to the mediocre quality of both the jobs. After his stint at Adaptive technology Hastings decided to found his own company and he named the company Pure Software. At Pure Software he found that the revenue of the just kept on doubling year on year and soon the company became so big that Hasting started feeling the heat. Since Hastings did not have a MBA degree he felt that he was incompetent to manage the company. In fact Hastings requested his board several times to fire him from the post of CEO. In 1997 Pure Software was acquired by Rational Software. Hastings then went on to cofound Netflix (Lüsted, 2012). Actually around that time Hastings had borrowed a movie named Apollo 13. He was pretty late in returning the movie by about 6 weeks since he misplaced the cassette. So, when he actually returned the cassette he had to pay a big late fee of $40. Hastings was very embarrassed by the incident and the incident actually set off a light bulb in his head regarding a new business idea (New Word City, 2010). Hastings decided that he should also open a video rental store because the basic business model appealed to him very much. He was also excited by the fact that film DVDs could be sent by mail to customers across USA since they were light weight to handle (Grinapol, 2013). Netflix started its video rental service with 925 titles that were first available as pay per rental basis (Keating, 2012). The monthly rental business was soon introduced by the company. The pay per rental model was soon dropped and monthly rental model was only kept. The subscribers of Netflix send the Netflix a list of the movies they like to view. Netflix sends to them a movie from the different titles that have been suggested by the customer or subscriber base on customer preference and availability at one of the warehouses (Rosenberger and Nash, 2009). No late fees are charged from the customer and the customer gets the disk of the second movie of his choice after he has returned the first one through the same envelope in which the DVD was originally shipped to the customer (Hitt, Ireland, and Hoskisson, 2008). The company incurred losses in its initial years and could become profitable only in 2003. The scale of the company’s operations can be understood from the fact that back in 2002 NY Times reported that the company mails around 190,000 disks to its 670,000 customers on a daily basis (Wayner, 2002). The Company’s success story in synonymous with rise of the popularity of home video players available at every home. Netflix seized the opportunity of the success of the home video players and capitalized on it with its internet based business and e-commerce which allowed the company to have a reach that other brick and mortar stores could only dream of. However the biggest plus point of Netflix founder Hastings is his ability to look into the future (Wayner, 2002). In 2007 when its business was big and it had just shipped its billionth DVD it started video on demand or streaming service. The move proved useful because when after a few years the DVD sales began to fall Netflix’s revenue and business continued to rise (Roebuck, 2011). In 2011 the company started pondering over the issue of whether the video rental business should be grouped into a subsidiary under the parent Netflix Company which will deal with video on demand service only. However customers of the company did not like the initiative and the initiative was since dropped. However Hastings feels that it is better to go for a change early and whenever it appears. Otherwise the companies may face becoming relevant or be thrown out of the business like Kodak. The fact that Hastings may be right seems from the issue that the company which was formed in 1997 has now its presence in 41 countries worldwide. The company has a major market share of about 34% in USA. However new market players like HBO, Times Warner company are trying to enter the video on demand market space that was being controlled by Netflix for so many years with their own video on demand service. An entrepreneur can be considered as a successful entrepreneur if he possesses the entrepreneurial mindset, fully aware of the business. A successful entrepreneur requires values, leadership and risk taking ability. The effective entrepreneur possesses the skill, determination and will in attaining success and having the courage to face the risk and uncertainty. An entrepreneurial business generally do not fall because there is no support from the environment they fail mainly due to the fact that the entrepreneur who manages and controls those business generally lack in possessing and developing an entrepreneurial mindset and the characteristics and qualities that are related to it. Here as discussed, in the company Zara, the founder of Zara Amanico Ortega has gained competitive advantage in saving time to develop a lead time over its competitors. Zara also gained competitive advantage by reducing the lead time from its competitors. It mainly focussed on pricing, distribution, retail, production and imaging. Zara is adopting the technique of providing the goods at a low cost to its customers. Zara provides quick delivery of the orders placed by its competitors. Red Hasting the founder of Netflix mainly focussed on dynamism. He preferred to adopt changes according to the demand and changes in the market. 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