Evaluation of the Business Opportunity - Essay Example

Opportunity and Business Plan evaluation Name: Institution: Date: Critique of the business plan The business plan has followed a standard format that is acceptable. It has an executive summary that explains the contents in the business plan in a summary form for executive use. Any person read the executive summary and understands what it is contained in the entire business plan. The executive summary contains the purpose of the business plan which is to raise funds to finance the business idea. Major parts of a formal business plan have been covered and it only requires focusing to get the attention of serious investors. The organization is good but there is no synergy in the flow due to the many technical jargons that has been used in the document. The business plan has to easily flow even to a lay person who is interested in investing his money in the business idea (Lambert, 2008). The business plan has showed the breakeven point. It has further provided a risk analysis that is important part of the business plan. The business has the structure of the organization and the different roles that the various people in the management team will play. It is good that the writers have included this part since it shows the total organization and implementation of the business idea. It is crucial to focus on implementation of the business idea. The business plan has already gained some head way but getting endorsements from credible institutions in relevant categories related to the product (Fuller, 2011). However, there are numerous problems that are evidence in this business plan that will discredit its authenticity and seriousness. These challenges are discussed from the next paragraph. There is no industry analysis which is very important. Porter’s 5 Forces Model has not been used in the industry analysis. Porter’s 5 Forces analysis what awaits the investors in the industry. Readers are able to understand the strength of suppliers, consumers’ bargaining power, threat of substitutes, threat of new entrants, and competitive rivalry. This helps in understanding the viability of the product and whether it is sustainable to heavily invest in the idea. There writers have dwelled so much in looking at the weakness of the competitors but have not analyzed the general trend in the industry (Pinson, 2004). There is continuous use of passive voice in many parts of the business plan. The business plan should be in active voice. It talks so much about what has been already accomplished instead of focusing on the plan that makes the document a business plan. Show much focus has been given on the past events than what the business intends to accomplish through investing in the new product. Whereas the strengths and weaknesses have been discussed, opportunities and threats have not been explored in the business plan. A comprehensive SWOT Analysis should be included in the business plan since it forms a basis of developing both long-term and short-term business objectives. Although there is an operation plan in this business plan, it is not elaborate and there are important things that are missing like plant location or layout, scheduling, production budget, flowcharts of goods and services and the equipment to be used. The operation plan is superficial and lacks depth. There should be a clear explanation on how the production process will be achieved and the product to reach the intended customer in the market. The business plan is too product focused. The writers have dwelled so much in explaining the scientific composition of the product and how it works. More effort should have been directing in marketing the product to the potential investors who are interested in the return to their investment (Lambert, 2008). Moreover, there is too much technical jargon in the business plan that will make people are not versed in the area to lose interest or avoid engaging in something that that too technical for them to understand. It will require someone who has technical knowhow in water treatment to be interested in this business plan. The business plan is also overly financial focus. More effort has been put to explain on the revenue part and sales forecast without dwelling on marketing the product and how it will appeal to a wider clientele. There are no factual references that have been attached to the business plan hence pointing to lack of intense research or working under assumptions (Shreefal, 2008). The business plan has mentioned the contents in the appendix but there is no attachment of anything. Furthermore, the business plan does miss a reference list that should contain various sources that the writers used to authenticate some of the claims that they have made in the business plan. Investors will invest in a product idea that is factual. Mere abstracts and projection cannot be convincing to serious investors who understand the risks involved in business. Besides, there is little focus on the team and the synergy exhibited by the business team. Much emphasis has been put on the inventor of the business idea and little focus on the rest of the team. Evaluation of the business Opportunity The overall opportunity of the project is not good and there is a lot that has to be done to attain sustainability. The target market of product is viable but will a little focus since it falls short of the goal with a small margin. The product is slightly challenging than the target market. The product falls out of the goal with a bigger margin. This means that it is more challenging for the team to define and package its product and present it to the market. Customers cannot buy what is not well defined. Sustainable competitive advantage is not rightly defined by the team it needs further focusing in order to fit in the projected goal (Fuller, 2011). Still the financial performance analysis is not very clear and requires some adjustments to fit in the goal. The devastating bit is the harvestability where it falls outside the goal with a very big margin. This mean that the idea can be bright and exciting but not able to be harnessed into a profitable entity as presented in the current business plan. The overall target market comprise of the target market size, market structure, competitors, customers, and pricing. The target market size falls below the goal with a big margin. This means that the project target market is smaller than what is on the ground. The team will require more working to expand the target market to fall within the goal. On the other hand, the market structure is outside the goal with some margin. It requires some polishing for the projected market structure to fall within the practical market structure. The team has not defined all the competitors hence competitors are falling below the target with some margin. The customers are somehow well defined and only go beyond the goal with a slight margin. Pricing strategies fall below the goal with small gap. It is only the customers who are well defined by the team. The target market size falls outside the goal on four issues that include current market size, local market share attained, international market share attained, and international market share attainable. This parameters fall below the goal with a big margin. The team got it right on the market size potential, market growth rate, and domestic market share attainable. From the market size analysis, the business idea is not sustainable. Although the market growth rate and potential are right whatever matters to the business falls below the goal with a big margin. On the market structure, the team misses it on niches available, window duration, and market capacity. The team gets it right on the industry life cycle, dependence on other products, and window of opportunity. The team targets to shorten the window of opportunity by working fast enough to implement the business idea. The niches have not been fully explored. The project number of competitors is smaller than the goal and even their strength has been undermined by stressing so much on their weaknesses. The competitors’ reputation has been blown out of proposition than the reality. When it comes to customers, the team only cleared attained the goal on the number of key customers, bargaining power of customers, and target market focus falls outside the goal on customer need, customer existence, market capacity, customer dependence, customer payback, and basis of growth strategy existence and suitability. It is only the project price that fits in the goal of the team in pricing. Other issues of price like price sensitivities, marketing and distribution costs, price elasticity, control over costs, pricing policy, and price maker fall short of this. The product characteristics fall short of the goal with a small margin. The process, team, resources and opportunities are bigger than the goal. Further analysis of product characteristics shows that product diversification, complimentary products, and product safety all fall within the goal (Lambert, 2008). Other attributes like substitute products, product addiction, novelty, number of dependent suppliers, product waste, and ease of disposal require adjustments in order to fit the goal. The process is blurred and bigger than the target goal. Complexity of production process, product business, and quantity of inputs needed falls outside the goal. Under the product characteristics it is only product diversification, complimentary products, and product safety meet the estimated goal. Substitute products, product addition, novelty, dependent suppliers, product waste and ease of disposal either fall short or outside the goal. The process is bloated and has to be focused in order to fit in the sustainable goal. Team, resource and opportunity also pose another great challenge (Kahn, 2014). The goal and fit and upside/downward issues fit within the goal but resource availability, resource appropriateness, resource/opportunity relationship fall below or outside the goal. Under the sustainable competitive advantage it is only the legal/contractual terms that have been met. Research and development, barriers to entries, strategic partnerships, and product differentiation are outside the goal. The objectives are skewed and need further sharping to attain sustainability of the competitive advantage. Among the production issues nothing has been met since everything falls below or outside the goal. Under product differentiation, everything falls outside the goal except competing products. Other issues such as satisfied customers, complimentary products, and number of intermediary need to be adjusted in order to fit in the goal. Under the strategic partnerships; endorsements fall below the goal while established strategic alliances, and number of distribution channels fall outside the anticipated goal. It is only the number of supply channels that fits the goal. This shows that the Watermark business plan needs more endorsement to achieve a sustainable level. Nothing under the barriers to entry everything does not fit in the anticipated goal. Under the research and development it is only research and development program that fits with the anticipated goal. All issues under legal/contractual that include property protection, technology ownership and insurance are outside the anticipated goal. In the financial performance any it is only the capital requirements that fall within the goal. The rest of the issues are outside the goal hence showing that there are a lot of forecasting that is not supported (Fuller, 2011). The financial figures provided in the business plan may be misleading. Harvestability and team issues fall outside the goal. The synergy among the team members and effective harnessing of the idea is not viable in the current situation. Leadership skills are skewed outside the target goal. Under the business planning, it is only the marketing strategy that has been addressed. Business plan, strategy congruence, and plan developed by team are outside the goal. This is a clear indication that the business plan is not adequately developed to answer all the questions that can be asked by the potential investors. The financial issues have not been addressed hence they fall outside the goal. Under the environment, the business plan has only addressed the technological part but government, economic, and social and attitudinal issues are yet to be addressed (Barclay, Dann & Holroyd, 2010). It is prudent to say that the business opportunity for the business plan is not attainable for the moment hence it requires further polishing. Areas that are not clear need to be rectified and focused to meet the need to all expected stakeholders. Investors will not only be moved with financial figures without supporting facts to back them. References Barclay, I., Dann, Z., Holroyd, P., New Product Development, Routledge, New York, 2010. Dariush, R., Innovation, Product Development and Commercialization: Case Studies and Key Practices for Market Leadership, J. Ross Publishing, Melbourne, 2007. Fuller, G.W., New Food Product Development: From Concept to Marketplace, Third Edition, CRC Press, 2011. Lambert, D.M., Supply Chain Management: Processes, Partnerships, Performance Supply Chain Management Inst, 2008. Pinson, L., Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future, Chicago, USA, Dearborn Trade, 2004. Kahn, K.B., New Product Forecasting: An Applied Approach, Routledge, New York, 2014. Shreefal, M.S., Commercializing Successful Biomedical Technologies: Basic Principles for the Development of Drugs, Diagnostics and Devices, Cambridge University Press, 2008. Read More