Entrepreneurship Summary - Assignment Example

Entrepreneurship Name: Institution: Date: Table of Contents Table of Contents 2 1.0 Introduction 3 2.0 Problem Statement 3 3.0 Proposed Solutions 4 3.1 Value Proposition 5 3.2 Team 6 3.3 Sources of Finance 8 3.4 Stakeholder analysis 9 3.5 Protection 9 4.0 Conclusion 9 References 10 1.0 Introduction The longer Span Company is an apparel industry organization. The venture offers apparel goods to the customers in the UK as well as other European regions. It started off with a single store outlet in London, with only less than 5 apparel manufacturing venture suppliers. However, since its establishment in 2000, the venture has experienced a rising market growth. On one hand, its supply base has increased to over 50 apparel brands, both domestic and international from nations such as Australia and France. Moreover, the venture has increased its store outlets across the nation. Currently, as of 2015 September, the outlet has over 32 store outlets spread across the country. This has been coupled by similar changes and developments in the organsiational sales revenues and competitiveness in the market. However, changes in the market external factors have created a major operational challenge for the company. This analysis reviews the current business challenge as well s approaches through which the venture can mitigate and overcome the challenge in the future. The analysis is aimed at creating business competitiveness and success into the future. 2.0 Problem Statement The organsiational problem is based on the changing market behaviours based on the technology changes in the UK and globally. Lee (2009) stated that there are drastic technology changes in the market. In this case, through increased internet connectivity, the global market has expanded. As such, this has facilitated the development and emergence of online shops. The online shops serve as an n alternative system through which the customers can purchase the goods online rather than visiting the shops. In a further analysis, Salkowitz (2010) stated that the younger generation is inclined to online shopping. In this case, the younger generation prefers using virtual shopping practices rather than the physical shops. This is due to the availed conveniences as well as relatively low customer involvement in the purchase process. Based on the above market changes, the organization has been experiencing a major challenge. In the last 4 years, the overall sales volumes have declined. In this case, rather than increasing its sales with an increasing middle class, the venture has experienced sales decline. This could be attributed to the changing consumer buying behaviours with technology developments. In this context, the young population, that is the main target base has reversed to the online shops. As a result, few and few people are visiting the organsiational physical stores outlets across the nation. The above challenge is a major setback to the business success. In this case, if the trend continues in the next half decade, the venture will run into losses. As a result, this will lead to its eventual failure. Hence, this analysis evidences that there is a need to develop strategic business measures to mitigate the challenge. In this case, the venture should strive to change its current business model and systems, as a means of aligning with the customers’ and market needs respectively. 3.0 Proposed Solutions Based on the above analysis, this report develops a strategic approach though which the venture can mitigate the challenge. In this case, the proposed solution is aimed at not just mitigating the current challenge, but also maximizing by adopting the changes as a market potential. This will allows he venture attain long term market sustainability by incorporating the changes as part of the business driving forces. This section outlines the proposed new business model. In particular, it addresses the questions of the idea protection, the value proposition, the required team, finances, and the overall stakeholders for the new business model. The proposed business solution is the development of online shops for the ventures apparel goods in the market. 3.1 Value Proposition An organisational value proposition is described as the benefits offered to the market. In this case, a value proposition on a product represents the benefits that a customer gains by consuming an organsiational products, whether goods or services (Barnes, Blake & Pinder, 2009). In this case, an organisational value proposition is based on an additional gain that a customer gains. This is as compared to other competitor similar products (Osterwalder & Papadakos, 2014). This becomes the key aim and reason as to why the customers purchase the goods from a given venture and not from the competitors. This is besides factors such as price and quality being constant. On one hand, the proposed online shop will be different from the others is the development of a link between the physical and online shopping. In this case, rather than just offering the products online, the organization will link the online and physical shops. In this case, customers will log in to the system by selecting their closest physical store in the market. With that, they can shop for the products online and have their deliveries either to collect from the store, or delivered to their location. The interesting feature however, is the ability to shop from other outlets if the preferred products are not available in the nearest shops. As such, this will increase the overall stock variety that the customers can access on the different products. This will serve as an additional means through which the proposed new business model will enhance customer satisfaction. An additional value proposition for the customers will be varied prices. In this case, unlike the typical online shops, the venture will provide shopping alternatives. If the customer will specify the product need urgency. As such, deliveries will be classified into urgent, average and long term. An urgent purchase will be delivered within 24 hours, an average purchase within 7 working days, and a long term purchase within 14 working days. For each of these categories prices will be different, with the long term attracting the least price. As such, the addition of this additional feature will help the customers save. In this case, if they do not urgently need a product, they can purchase it at a relatively lower price and have it delivered in 14 days. This serves as a strategic cost reduction approach, unavailable on other online shop platforms. 3.2 Team In order to actualize the development of the proposed strategy, a number of individuals and team members will be required. In the execution of any strategic decision and strategy in an organisation, the workforce plays a crucial role. This is because such a workforce influences and manages a change process. Similarly, in the development of additional online shops to supplement the physical stores, a number of workforce employees are required. One of the key teams is the technology and ICT teams. As it stands, the organisation majors on the physical store outlets. As such, its staffs are mainly trained on physical handling of customers and sales. If the new online shops are to be introduced, a new workforce or retraining of the current workforce is imperative. On one hand, the setting up of the online shops requires expansive ICT skills. In this context, the venture can either contract a third party team to develop its IT systems or recruit an internal workforce to develop the systems. This proposal is based on contracting a third party to develop and establish the platform. This decision is based on the understanding that the development of the ICT systems will be a one off project, and thus employing a permanent organisational team would be unsustainable. The second team category of team members in the ICT roles is the team to run the platform as well as develop technology based marketing systems for the product launch. In this case, due to its core role in ensuring the idea development and success, the review recommends that the venture should hire and train its employees. In this case, the teams should be trained on ICT systems and technology marketing strategies. The next team required to actualize the proposed strategy is the distribution team. In this case, the team will have the new role of delivering the products to the customers based on their delivery dates and location preferences. This is a new team responsibility as initially the customers purchased and collected their goods directly from the physical store outlets. Similar to the ICT system, the new model will have the alternatives of contracting a third party to offer delivery services or develop its own internal team. In the light of the initial capital investments and long term role in business this analysis recommends that the business will use a combination of both. On one hand, in the initial process stages, it should use the third party logistic companies. The use of the third parties will reduce the overall investment cots required to develop a logistics distribution system (Fasnacht, 2009). However, as the venture profitability increases in the future, it should revert to an internal distribution system. This will enable the venture align the distribution process with the business long term objectives. 3.3 Sources of Finance As already indicated in the above analysis, the execution of the proposed venture is based on additional financing in the market. In order to generate the relevant systems, the venture will source funds from various sources. One main fund source for the model development is from the organisational profit base. As already illustrated, although with a reducing margin, the venture has earned profits over the years. As such, the profits can be ploughed back as a means of increasing its future market competitiveness and sustainability. The use of the organizational profitability ensures the adoption of a sustainable business model. As such, this reduces the risks associated with investors pulling in additional investments for the venture, for the fear of losing such investments. The second main source of investment for the venture is through financial institutions lending. Based on its financial statement, the venture is a privately owned company. Thus, the entity has its assets that serve as its loan guarantee. Due to its past records and high credibility ratings, it will easily acquire funding from financial institutions. The use of financial lending option is a convenient way to top up the available internal funds for the ICT systems development. However, the concept of interests on loans increases the overall loan value, and reduces the profits in the long run period (Pride, Hughes & Kapoor, 2008). The third and final source of funding for the entity is through its shareholders contributions. In this case, the venture will request the shareholders to increase their equity share in the venture, by supplying additional funds. 3.4 Stakeholder analysis In the development of the proposed business development model there will be additional stakeholders besides the existing ones. The existing stakeholders for the venture include the shareholders, employees and product suppliers, as well as the government. On one hand, the shareholders have high power and interest on the venture, similar to the employees. However, the government, although possessing substantial power, has minimal interests in impacting the venture. As such, its involvement with the organisation is limited to regulations development and conformance. The proposed business model increases its stakeholders to include the ICT developers. In this case, they have high power as changes in ICT systems such as online payment technology would highly impact on the organsiational operations and market success. 3.5 Protection The proposed idea will be protected by the company trademark. In this case, it will be registered as a trade idea under the Company patents. As such, it will be protected by the patent rights to limit its emulation and copying of the platform and model name by the competition. 4.0 Conclusion In summary, the above analysis evidences that although the Longer Span Company has had tremendous market success, it faces a number of challenges. In this case, changes in technology and consumer buying behaviours re the core among its challenges. As such, the report recommends the development of online shops as its solutions. The idea will be protected by the company trade mark, and financed through profits, shareholders equity, and financial lending respectively. Moreover, it will offer a cost reduction and variety provision value proposition to its customers in the long run period. References Barnes, C., Blake, H., & Pinder, D. (2009). Creating & delivering your value proposition: Managing customer experience for profit. London: Kogan Page. Fasnacht, D. (2009). Open innovation in the financial services: Growing through openness, flexibility and customer integration. Berlin: Springer. Lee, I. (2009). Handbook of research on telecommunications planning and management for business. Hershey: Information Science Reference. Osterwalder, A., & Papadakos, T. (2014). Get started with ... Value proposition design: How to create products and services customers want. Hoboken, NJ: Wiley. Pride, W. M., Hughes, R. J., & Kapoor, J. R. (2008). Business. Boston: Houghton Mifflin Company. Salkowitz, R. (2010). Young world rising: How youth, technology and entrepreneurship are changing the world from the bottom up. Hoboken, N.J: Wiley. Read More