Corporate Strategies for Entrepreneurship at Bluechiip Limited - Case Study Example

Corporate Strategic Plan for Entrepreneurship at Bluechiip Limited Name Course Tutor Date Executive Summary This strategic plan is based on Bluechiip limited; an Australian company that has produced a wireless tracking product that has abilities to withstand extreme temperatures. As a start-up technology company that has not yet commercialised its innovation, this strategic plan is intended to guide the commercialisation process. The report recommends actions which seek to ensure that Bluechiip secures it relative position not only in the consumer market but also in the stock market. Among the recommendations include the need for the firm to develop its human capacity, its manufacturing capacity, and the need to price its product appropriately considering its unique aspects while realising the need to penetrate the consumer market. Strategic Plan In the development of the strategic plan below, the opinions of Glen Searle – an associate professor at the University of Queensland who has previously worked at the University of Technology Sydney as a senior lecturer – were sought. However, the associate professor was not available for engagement and as such, his published work – especially Searle and O’Connor (2010) – was relied upon as a source of valuable advice. Specifically, Searle and O’Connor (2010) have advised that start-up companies need to develop local capacity before taking up large orders from international markets since such a decision would compromise their capacity to manufacture and distribute reliable and quality products. Vision To become the most efficient and reliable innovator and provider of wireless tracking solutions for use in different sectors. Mission Ensuring that Bluechiip® technology becomes the standard tracking technology preferred by many industries in Australia and abroad. Background Bluechiip is a technology start-up company that has spent its first 18 years of existence researching and developing the tracking technology that it intends to commercialise. It listed in the Australian Securities Exchange (ASX) in June 2011 (Bluechiip, 2012a). Since its establishment, Bluechiip has made significant progress in marketing its unique tracking technologies, which are different from the regular tracking solutions available in the market today. By 2012, Bluechiip was a research and development company and had not released a commercial product yet. However, in its end year report, the company clearly stated that its intention was to have a commercial product, establish a commercial sales strategy, and obtain commercial sales from its products and sales networks (Bluechiip, 2012a). The company prides itself as an authentic Australian technology start-up company, and has expressed confidence that its tracking technology will attract sales and orders from not only Australia but also from the international market. As part of its commercialisation strategy, Bluechiip entered into a partnership with Gentris Corporation in August 2012 (Bluechiip, 2012a). The partnership was based on an agreement which allowed Bluechiip to expand Gentris’ service model using the new tracking technology. On its part, Gentris would purchase and use the Bluechiip tracking technology for trials. Bluechiip is targeting the biobanking industry as its initial and immediate target market. In the 2012 annual report, the company (Bluechiip, 2012a) indicated that there was a clear and demonstrated need for its product in the bio-banking industry. However, it is also targeting other markets, with special focus on aerospace, manufacturing, security/defence, and supply chain logistics industries. So far, the principal activity at Bluechiip has been the development of a “unique tracking system that once commercialised offers enhanced technical capabilities over existing barcode and radio frequency identification (RFID) technologies” (Bluechiip, 2012b, p. 12). Strategy The strategic goals and direction included herein are meant to help Bluechiip in marketing and commercialising its new tracking technology in Australia and attending to new markets abroad. The strategy is based on the firm’s understanding of what customers need and opportunities and challenges of offering the wireless tracking technology in a market where other competing products already exist. The marketing will be done based on different market needs, which will be identified through a thorough analysis of potential markets. Bluechiip will offer unique solutions to tracking through giving consumers unique tracking technologies that will replace the existing radio frequency identification devices, labels and/or barcodes. To commercialise its product however, it will need to do the following: Identify the most influential customers in its target market. Identify the poignant business issues – related to tracking technologies – which such customers face. Create a value proposition addressed to such customers dealing with the problems they face and indicating why the wireless tracking technology will resolve it. Get their honest opinions regarding their perception of the new technology’s performance and assuming the opinions are positive, use the same to market the new tracking technology – i.e. having obtained the customers’ consent first. Encouraging initial customers to tell others about it, and through such word-of-mouth strategies, help enlarge Bluechiip’s customer base. Transform from the current state – i.e. from a small research firm into a large company gradually, while developing own capacity to manufacture and distribute increasing number of orders in future. Develop the capacity to oversee manufacturing and product distribution. Engaging and recruiting channel partners who will sell the product on Bluechiip’s behalf Among the major considerations that Bluechiip will make include pricing its product appropriately especially considering the superior benefits it has when comparing to competing technologies; however, the foregoing will be balanced with the threat of substitute products, which is posed by existing technologies such as barcodes among others. 5-year vision for Bluechiip Ltd Context By 2018, consumers will have realised the benefits of embracing Bluechiip’s wireless tracking technology, especially when compared to RFID and/or barcodes. By 2005, industry analysts had already started faulting bar-coding technology for its inability to include security and flexibility measures (e.g. McCathie & Michael, 2005). For example, it was argued that barcodes had no read and/or write capabilities. Besides, they could only be tracked by a barcode scanner which involved a person holding the scanner close to the barcodes. RFID technology on the other hand offered some solutions to the problems of bar-coding. However, RFID had its shortcomings too. They include the high cost, the inability by RFID readers to pick information when products are passing through liquid or metallic channels, reader collision, tag collision and the readable and writable chips which require two machines for each process (i.e. to read and write). Having persevered through the inadequacies of the two foregoing technologies (i.e. bar-coding and RFID), the market is ripe now for a new technology that will offer solutions that the two – so far – have been unable to provide. In bio-technology for example, Bluechiip will minimise the human error risk by ensuring that samples are traced and tracked effectively. Barcodes have been proven unsuitable for use because they freeze and become hard to read. As well, RFID has previously failed to work in very low or high temperatures (Featherstone, 2013). On its part, Bluechiip uses micro electro mechanical systems (MEMS), and consequently has fewer mechanical properties thus making it better able to withstand extreme temperatures. Ideally, its uniqueness will gain it a considerable market share by the year 2018. Identifying many commercial partners will also help Bluechiip in its commercialisation phase. In addition to MiTeGen, a New York based company mentioned elsewhere in this plan, Bluechiip has also partnered with Corning. It is such commercial partners that will evaluate the technology and sell it on behalf of Bluechiip in both Australia and abroad. Tactics: Attending and participating in many innovators forums as a way of creating awareness and gaining publicity. Since its listing on the ASX, Bluechiip has received relatively impressive media coverage as can be seen on its tags on the Financial Review (2013) link . Roll out a product commercialisation and marketing plan by the end of 2013. However, this will need careful timing, identifying the right place to launch, and identifying the right initial target consumer based on test marketing and market research. Use Bluechiip’s successful deal with MiTeGen (New York), and InPeco (Switzerland) as documented in Bluechiip (2012b) and PR Newswire (2012) respectively (among others) as illustrations of just how effective and reliable the wireless tracking technology is. Directions and results The strategic goals and directions/tactics included herein form Bluechiip’s response to understanding its target market and potential customers. The opportunities and threats will provide the firm with the insight needed to make maximum use of the chances that come its way, and minimise the effects of the probable risks that are present in its operating environment. While it has been argued that a 5-year timeframe is too much time for a strategic plan meant for a start-up company (see NextTech Strategies, 2012), the timing will allow Bluechiip to assess and deepen its understanding of the tracking technology market, while laying the right networks necessary for its growth in the future. As indicated by Featherstone (2012), Bluechiip needs to prove its ability to manufacture, cope with increasing product orders, and manage manufacturing risks. Strengths The first of a kind innovation, which is arguably more convenient compared to other competing products. Bluechiip technology is applicable across a wide range of industries (e.g. health, defence, bio-banking, logistics/supply chains, and aviation etc), thus meaning that there is a potential large market for the product. The Bluechiip tracking technology is said to be “the only technology that enables accurate and reliable tracking of products including stem cells, cord blood and other biospecimens” (Bluechiip, 2012b, p. 2). It is a hardy technology, and according to Bluechiip (2012b), it can withstand extreme temperatures and can survive other practices such as centrifuging, humidification, gamma irradiation sterilisation, frosting, cryogenic storage, and autoclaving. Weaknesses Switching costs from the existing tracking technologies to the new wireless tracking technology as proposed by Bluechiip are high. This means that while consumers may appreciate the unique and incomparable benefits of the Bluechiip tracking technology, cost inhibitions may prevent fast adoption of the same. A relatively new product, with little market awareness and even less brand awareness inside Australia and elsewhere. The threat of substitute products is high especially the high penetration of barcode tracking technology in the market The absence of a supply chain and/or a network of vendors in Australia Opportunities There is an existing gap in the provision of foolproof tracking technologies, which creates a potential market for Bluechiip. Bluechiip’s policy to partner with other firms to test its technology will most likely position it as a reliable company, which has provided its technology for objective review and evaluation by other companies in its targeted consumer blanket. Threats A major threat is posed by counterfeiters, who despite the presence of strict intellectual property law continue undermining the efforts of innovators by copying and selling cheap counterfeits of innovations. Competitors are likely to fight for survival by either improving their own inventions, or marketing their products more. As a micro-cap company, Bluechiip needs to be cautious in its expansion. Specifically, the company needs to transform gradually from a small research firm that it is now, to a larger company that has the capacity to handle incremental number of orders. Bluechiip’s main target market – i.e. the bio-medics – has been described as conservative (Featherstone, 2012) and this means that it could take longer for Bluechiip and its commercial partners to convince the medical profession to purchase the technology. If this were to happen, it could mean that Bluechiip will not have as much earnings as expected. Assessment matrix Penetration of the Australian market with the commercial product, i.e. the new wireless tracking technology Percentage increase in revenue earnings An increase in the human resource capacity Positive vs. negative feedback from customers Number of projects/contracts that Bluechiip gets from corporate and government customers Priorities and goals Identify potential markets and research the demand for new wireless tracking solutions Identify the specific markets where Bluechiip will set up businesses. Based on the quantity of market identified, recruit and train staff (especially in marketing and management) with an intention of ensuring that the product attains market penetration within the shortest time possible. Develop business contacts with government institutions, corporate institutions, and other customers who may need new and reliable tracking solutions. Provide leadership and management training for identified candidates who will be responsible for leading and managing Bluechiip’s operations throughout Australia. Identify a critical assistance team, which will travel to different cities to provide technical and educational assistance to employees working in different Australian cities. The assistance team will also review the performance of different Bluechiip operation offices across Australia. Recommendations In relation to staffing, the human resource (HR) department at Bluechiip will do the following: I) Recruit and select employees who have identified skills sets, which include a deep understanding of different tracking solutions, effective communication, and a basic understanding of customer service provision requirements. II) Train new staff (and existing staff when need be) not only on the technical aspects of the job, but also in the organisational culture in a bid to inculcate the company values and beliefs in them. III) Ensure that all employees understand that the new tracking solution provision is meant to provide the solutions that customers seek in a timely, effective and customer-friendly manner. IV) Ensure that teamwork is upheld by all employees and that coordination between all departments is flawless in order to enhance product development and delivery to consumers. To overcome the threats identified herein, Bluechiip will do the following: I) Price the new wireless tracking technologies in a manner that enhances adoption among consumers, while still upholding its value as a unique product that has superior benefits than any other available product in the market. II) Ensure that the marketing aspect of the product is properly planned and executed in order to counteract any aggressive marketing by competitors III) Approach biomedical facilities with offers, especially for purposes of ensuring that the product penetrates the market IV) Work closely with commercial partners in order to ensure that brand and product awareness are created in Australia and abroad. Funding As an ASX-listed company, Bluechiip Limited has in the recent past (2011) acquired substantial funding from people who bought into its shareholding. In case of more financial requirements, the company has several options to consider. They include Getting loans from banks Fundraising among shareholders through a rights issue Government facilitation through grants and/or loans Micro-cap funds Reinvesting most of the profits made by the company into the business – i.e. at the expense of paying shareholders, until such a time that the company has adequately financed its expansion. Other Network more by organising awareness campaigns surrounding its new wireless tracking technologies. Seek support from the authorities in Australia. Identify and contact the right firm to carry out Bluechiip’s marketing and public relations campaigns. Successfully meet some of the identifiable milestones in its commercialisation agenda. i.e.: get its commercial partners to evaluate and sell the technology; announce sales in order to bolster its position in the stock market; and prove that it has the capacity to manage the manufacturing of products, distribution of the same and handling the manufacturing and distribution-related risks. References Bluechiip. (2012a). Annual report for the year ended 30 June 2012. Retrieved July 06 2013, from http://www.bluechiip.com/wp-content/uploads/2012/05/120914-Bluechiip-Annual-Report-for-the-Year-Ended-30-June-2012-ASX-lodged-version.pdf Bluechiip. (2012b). Bluechiip licenses its technology in deal with US tech company MiTeGen. ASX Announcement. Retrieved July 06 2013, from http://www.mitegen.com/pressreleases/121205-Bluechiip-Ltd-MiTeGenAnnouncement.pdf. Featherstone, T. (2012). Bluechiip bets on biobanking. BRW. Retrieved July 06 2013, from http://www.brw.com.au/p/sections/fyi/bluechiip_bets_on_biobanking_1BFe7xu9ZTWSx5WJYVQBYM McCathie, L. & Michael, K. (2005). Is it the end of barcodes in supply chain management? In Proceedings of the Collaborative Electronic Commerce Technology and Research Conference LatAm, University of Talca, Chile, 3-5 October, 1-19 NextTech Strategies. (2012). Spending time and effort filing your strategic plan with worthless items? Retrieved July 06 2013, from http://www.nextechstrategies.com/things-to-leave-out-of-plan.html. PR Newswire. (2012). Inpeco to use Bluechiip® technology in automation systems. Retrieved July 06 2013, from http://www.thestreet.com/story/11742333/1/bluechiip-signs-co-development-deal-with-inpeco-to-use-bluechiipr-technology-in-automation-systems.html Searle, G & O’Connor, K. (2010). What makes Australian IT industry companies go global? Academic Research Paper. 1-13. Read More