Evaluation of an E-Entrepreneurial Australian Business - Case Study Example

Evaluation of an E Entrepreneurial Australian business Name Institution Lecturer Course Date Technology is constantly changing for the better, a few years ago the concept of online shopping and ecommerce was a dream but now it is a reality. Most businesses nowadays are conducted online by just click of a button. According to Acma, (2011, P. 1), Australians continue to embrace technology; majority claims that going online is the norm. In June 2011 7.5 million accessed top 15 online shop website (P. 8) Many SME e businesses are staring up and grow while others die at infancy stage. Businesses start-up but fail within first the few years (Clark et al, 2012, P. 6), however this is the case for Sheriton Shoes an online shoe shop in Australia which is a good example of a company which has builds its operations on a new, innovative B2C e business model where the business sells products and services to directly to consumers, (Napier, 2006 P 16). Sheriton Shoes has gown and currently has about nine stores around Sydney, (Daydreamwebsites.com.au, 2014). The main driving factor in Sheriton Shoes chosen strategy is that the company uses the potential benefits of IT and e-commerce by incorporating new technologies which complement the old brick and mortar processes and operations. Sheriton Shoes challenges the traditional concept brick and mortar of by incorporating full power of the internet and other forms of ICT; the customers shop online, (Daydreamwebsites.com.au, 2014) making payment online using secure online banking/credit card payment solutions. The website and the online payment system developed with customer needs in mind, (Daydreamwebsites.com.au, 2014). This enables a complex process of value creation and addition that strongly relates to every aspect of a company’s operation and the choices it makes (Zhao, 2006). The business has grown through phases and stages in the in net economy as described by Dutta, (2009, P. 408) first there must exist a business concept for business to start, for Sheriton Shoes the idea was to sell shoes online to Australian as well as the whole customers world (Daydreamwebsites.com.au, 2014). The idea must be profitable. This phase is termed as the idea finding phase. This is followed by idea formulation phase which simply mean that the idea must be subjected to a suitable foundation and that business plan must be drawn. Idea realization then follows. Businesses do not fully rely on this step as a final means of achieving and realizing its goals. The business must under go through the idea intensification phase which involve continuum development and necessary adjustments to meet the market demand. The last phase, idea continuation implies that the business idea must be capable of maintaining positive growth into a long-term business, (Dutta, 2009, P. 408). The early stages of finding, formulating and realization of business idea are broken down into three parts, first are pre-seed, and second are seed and finally start-up. In the pre-seed and seed the ideas are still formulated and the company is yet to start. Start-up phase is characterized by establishment of production capabilities, members of staff are identified and finally entry into the market is made. This phases must be backed up by the steps identified by Napier, (2006 P. 40) who argued that the five steps in coming up an entrepreneurship business, self evaluation to determine entrepreneurial skills, decision whether to buy a business or start, for new business, define business concept, products and services to be sold, create a business plan, operate and growth the business, continue growing the business. The important element in formulating the business has been fully implemented by Sheriton Shoes, right from idea formulation, business plan formulation market identification, sustainability and ensuring growth in business. How ever there are still milestones to E-entrepreneurship in Australia. Acma, (2011 P. 16) argued that many Australians are still not purchasing products online, this is attributed by lack of trust especially in the internet while the M-shopping has not yet fully been incorporated. Recommendation to the CEO In order for the business to achieve competitive advantage and to eliminate the customer barrier to shop online, a model e-business (CATE-b) by (Zhao, 2006, P 251), which describes a four stage in e-business growth. Stage one being implementation of appropriate it infrastructure such as M-shopping, step two involves changing of the structure and business strategies to suit the current changing customer needs, third stage is integration within an organization. And lastly having free information flow between suppliers, organization and the customer. Zhao, (2006, P. 11) also argues that integrated framework involving 5s, strategy, system, staff, skills and style should be followed. The CEO should also understand the rule of thumb by Zhao, (2006, P. 171), that E is not free, it comes with cost and there are risks involved, when employing introducing a new technological idea, do it at the right time and place, and finally teaching old customer E and m tricks. Important elements in formulating and evaluating an entrepreneurial business plan for a start-up organization Baron and Shane, (2008 p. 207), argues that other than entrepreneurs writing business plans to pursue others to join and invest in their business, they also formulate it to help them have a clear understanding of how to proceed with different business issues. Abrams, (2003 p. 2), also argue that the reason for writing a business plan is to have a successful business. Baron and Shane, (2008 p. 208) continue mentioning that business write simple business plans with the basis of information known rather that basing it from mere assumptions. for a successful business plan the following steps is followed, lay business concept, do feasibility study, refine data and out line specifics of the business and finally lay down the plan, (Abrams, 2003 p 13). Before venturing into a new business, there are key issues that must be addressed, that is having a clear idea for the product or service, to whom it is useful, explaining who the entrepreneur are, structuration of the business, whether the plan is aimed at raising money, type and amount of funding needed, (Baron and Shane, 2008 pp. 209-210). Business concept, having knowledge of the market, industry health, management capability, financial controls are some of the factors that guide in the planning process, (Abrams, 2003 p 2). The success of the business plan depend on the basic principles of being in a proper preparation in business format that is table, of contents giving major section, executive summary and appendices. The second principle is that the plan ought to be short and precise as possible approximately 35 pages. Finally the plan should be convincing by capturing the attention and interest of investors (Baron and Shane, 2008 p. 210, McKeever, 2007 p. 160). The executive summary, Baron and Shane, (2008 p. 211), explains that this is the first and important component. It includes mission statement, summary of company advantages, sales (Dutta, 2009 P189). It provides legal form ownership and history this is crucial and is presented first Baron and Shane, (2008 p. 214). It enables investors or any potential investor to have an understanding of the opportunity, what makes the service and products unique and valuable. (McKeever, 2007, P. 161) argues that investors will are attracted by the impression of the summary, and by so doing they can invest in the business Market analysis, Baron and Shane, (2008 p. 214), argues that without a proper market analysis, products and services released to the market will disappear faster than expected because the market rejects them or they do not develop at all. It is required that one should examine the market for the product through market surveys and market analysis. Here market size is determined; it’s potential for growth or shrinking (Abrams, 2003 p .2) market should be large enough responsible and accessible. Through market analysis, detailed information the competitors (Ehmke and Akridge, n.d. P. 4) and the competing products and how the new product will out do the existing through mechanisms such as quality and price one are gathered. (Ehmke and Akridge, n.d. P 1) it also points out who the customers are and what they want. Market plan usually addresses four areas products offered, pricing, distribution and promotion. Product development and production, this describes the position of the products (Baron and Shane, 2008 p. 215). Are they still under development or already developed and whether they are ready to be developed and what at cost and time? Matters of intellectual property right, trade mark or logo (Ehmke and Akridge, n.d. P 7) is important. Management team, describes the management team, (Baron and Shane, 2008 p. 215), any investor would want to now what skills, expertise, personal traits the management team has. Management team should have complementary skills, ability and experience. In other word what one manager lacks the other should provide and vice versa. Abrams, (2003 p 6) mentions that successful managers have experience, realism flexibility and are team players, therefor when developing business plan it should be considered whether management have this traits. Financial plans and projections, each section of the plan is crucial, but financial plan receives more scrutiny, balance sheet, income statement and cash flow statement are captured here, (Baron and Shane, 2008 p. 216). Ehmke and Akridge, (n.d. P. 7) argues that financial plan is a good tool for evaluation a new investment opportunity. Through this the debt-to-equity ratios, working capita and turnover of investors are determined if they are within acceptable limit. The key in any business is its ability to handle money, (Abrams, 2003 p 7). When evaluating business plan, the following are critically examined. Capability of the founding team, how attractive is the product and or services, market risks existing and potential customers, the expected returns (Baron and Shane, 2008 p. 222). In order to do so a policy called capturing policy is employed. This is where those factors believed to play a key role in decision making are looked at first, these factors are market familiarity, management ability to lead, proprietary protection, market growth, number of competitors and their strengths (Baron and Shane, 2008 p. 223), Contingency plans. According to Dutta, (2009, P.191) this section briefly shows the potential problems and challenges the company may face, and contingency plans should be drawn to help in such situations References Abrams, R., 2003. The successful business plan. 4th ed. Palo Alto: Planningshop. Acma, 2011. Communications report 2010–11 series Report 1— E-commerce marketplace in Australia: Online shopping. 1st ed. [ebook] Australian Communications and Media Authority, pp.1-40. Available at: [Accessed 21 Apr. 2014]. Baron, R. and Shane, S., 2008. Entrepreneurship:A Process Perspective. 2nd ed. Mason, OH: Thomson/South-Western. Clark, M., Eaton, M., Meek, D., Pye, E., Tuhin, R. and Clark, M., 2012. Australian small business. 1st ed. [Canberra]: Dept. of Industry, Innovation, Science, Research and Tertiary Education. Daydreamwebsites.com.au, 2014. Australian ECommerce, E-Commerce, Shopping Carts, Merchant Solutions. [online] Daydreamwebsites.com.au. Available at: [Accessed 21 Apr. 2014]. Dutta, B., 2009. Entrepreneurship management. 1st ed. New Delhi: Excel Books. Ehmke, C. and Akridge, J., n.d. The Elements of a Business Plan: First Steps for New Entrepreneurs. 1st ed. [ebook] pp.1-12. Available at: [Accessed 21 Apr. 2014]. McKeever, M., 2007. How to write a business plan, 8th edition. 9th ed. Berkeley, Calif.: Nolo. Napier, H., 2006. Creating a winning E-business. 2nd ed. Boston, Mass.: Thomson Course Technology. Zhao, F., 2006. Entrepreneurship and innovations in e-business. 1st ed. Hershey, PA: Idea Group Pub. Read More