Critical Analysis of the Eco Clear and 2 MBA Business Plans - Example

nginееring of Management Report Name: Course: Tutor: Institution: Date: Table of Contents Table of Contents 2 Executive Summary 3 1.0 Introduction 4 2.0 Business Plan Strengths and Weakness Analysis 5 2.1 Eco Clear Plan 5 2.1.1 Strengths 5 2.1.2 Weaknesses 5 2.2 2MBA Business Plan 6 2.2.1 Strengths 6 2.2.2 Weakness 7 3.0 Challenges in Writing Business Plans 8 3.1 Financial Forecasting 8 3.2 Information Shortage 9 3.3 Content and Summary Skills 9 4.0 Improvement Recommendations 10 4.1 Executive Summary 10 4.2 Operational and Strategic Goals Determination 10 4.3 Competitors Evaluation 11 5.0 Business Planning Lessons Learnt 11 6.0 Conclusion 12 References 14 Executive Summary This report reviews the concept of business plan writing. As such, the report narrows down to an evaluation of the role, challenges, recommendations and applications of business plans. As such, the report offers a practical application of the concept through a critical analysis of the Eco Clear and 2MBA business plans. On one hand, the report establishes that among common plans strengths are management teams and products uniqueness. Further, under the weakness analysis, business model and marketing strategies emerge as key among them. Additional evaluations of the experienced challenges include financial forecasting, data collection and language use. However, in a bid to overcome these challenges the report offers recommendations such as in-depth competitors’ analysis, development of strong, persuasive and attractive executive summaries, as well as the application of strategic management concepts. Based on the discussed theoretical and practical business plan aspects, the report concludes with a reflection of learnt lessons on business planning. In this case, it lists the merits of benchmarking in business plan development, their role in organizational vision attainment, and the role of appearance and business plans layout on readership appeal. 1.0 Introduction In the recent past, a majority of the small and medium business enterprises have acknowledged the role played by the development of good and appropriate business plans. In particular, organisations seeking business venture alliances, partnerships as well as investors have increasingly been required to prepare business plans. Such plans outline both the organisational vision statements, products features and the market expectations both in the present and into the future. However, like any other business practices, the development and preparation of appealing and market fitting business plans poses a major execution challenge (Abrams, 2003). In this regard, it is important to develop a framework through which businesses can review and establish the worth and appropriateness of their developed plans. In achieving the objective, this report evaluates the Eco Clear and the 2MBA business plans. On its part, the eco clear plan seeks to raise funding and alliances for the development and manufacturing of an eco-friendly self cleaning water filtration technology for swimming pools. The product development seeks to reduce on water cleaning costs for swimming pools (“Eco Clear”, 1997). On the other hand, the 2MBA plan lists a range of beverage appliances. Among the listed products include the La Barista coffee maker and the Mobile vending unit retailing cart (“2MBA Inc.”, 2001). The report conducts strength and weakness analysis for both business plans, reviews challenges, improvement recommendations and finally offers a reflection of lessons learnt from the study. 2.0 Business Plan Strengths and Weakness Analysis 2.1 Eco Clear Plan 2.1.1 Strengths The Eco clear company business model is developed and based on the development and establishment of a unique product in the market. In this regard, the proposed swimming pool cleaner applies a self cleaning mechanism through which the water need not be changed. As such, the product features enhance a reduction in swimming pool maintenance costs due to reduced need for changing pool waters. As such, the proposed product unique features offer it a competitive edge over other competitors in the market. In addition, the product launch success offers the business plan an added market advantage. In this case, the pan establishes that upon its launch, the product achieved overall 3000 units sales in Australia. Therefore, this reveals that the propose venture is viable and has an increased market demand. Thus, this offers the business plan a key investor’s attractive edge due to the perceived high returns on investment as well as a reduced payback period. Further, an evaluation of the Eco clear business plan established that the venture has a merit in the adopted business plan. As such, the plan adopts the B2B business model, where it relates with swimming pools design organisations. As such, this reduces the overall need for marketing, subsequently reducing on the overall production costs. 2.1.2 Weaknesses A major limitation on the Eco Clear Company business plan is its high capital and partners profile. On one hand, the business plan requires a high level of funding for research and development. In this regard, the business plan recommends high investments in the research and development unit to enhance the filter designing and manufacturing. On the other hand, the business plan requires a high profile partner manufacturer in the market. As such, this makes it imperatively hard for the organization to acquire the required funding. In addition, the adoption of the B2B business model although reducing the cost of production, reduces on the overall organizational relationship with the consumer base, an approach that plays a significant role in facilitating reputation and brand image in the industry. The development of relationships with the consumer base facilitates consumer positive perception on a brand, resulting to increased market reputation. Moreover, the business plan has a weakness based on its target market base. Basically, the organization targets the North American market as the core market and consumer segment. Although the market has a great swimming pools potential, there is the risk for increased competition due to the presence of already established and financed, posing a competition threat. Therefore, this risks the overall organizational success possibilities in the market. 2.2 2MBA Business Plan 2.2.1 Strengths One of the strongest aspects of the 2MBA business plan is the proposed venture management team. In this regard, the organization is led by an executive team of four, charged with key and strategic decision making responsibilities. In order to motivate the staff and enhance their commitment, the organizational staffs own 60% of the equity and hold 2 positions on the board. Therefore, this encourages the staff to increase their performance efficiency in a bid to increase the overall organizational performance and success. Therefore, the presence of a strong presents the proposed venture with a market success advantage. Moreover, the establishment of a contract with the Nestle to supply in the excess of 2300 La Baristas for a 5 years period serves as an additional strength. Thus, this offers the venture a reliable capital base through which to finance its operations in the short and medium term periods. Thus, this is likely to attract an increased investor’s base who perceives the venture as stable and financially reliable. In addition the business plan has a merit in its diverse product deliverables. In this regard, the venture seeks to supply both the La Barista coffee maker as well as the mobile vending unit. Consequently, this offers the organization an increased opportunity to expand and develop into diverse market segments. 2.2.2 Weakness Despite its strengths, the 2MBA business plan has a weakness in the financial rewards offered. In this case, the venture offers a 30% equity for industry alliances and partners. As such, this implies that partners would only share 30% of the attained profits. The business venture is a promising venture with increased growth potential. Therefore, investors would be unwilling to settle for the low equity portions of 30%. Thus, this reduces is overall attractiveness despite the expected future growth and expansion. More so, the business plan has a weakness in its competitor’s analysis. In this case, an evaluation of the organizational business plan establishes that it lacks a sufficient competitor’s analysis. An evaluation of organization competitors plays a significant role in demonstrating an organization products variety and uniqueness. As such, investors rely on such analysis to evaluate organizational industry competitive edges, enhancing the overall organizational success rates in the market. Therefore, the lack of this competitor analysis reduces the business plan attractiveness in the market. Finally, a weakness in the proposed venture arises in the adopted marketing strategies. In this case, the proposed venture seeks to use the Nestle Company contract as its main conduit into the USA market. In this case, the approach limits expansion to areas under Nestle supply chain network coverage in the short and medium term periods. 3.0 Challenges in Writing Business Plans This report concludes that organisations and entrepreneurs face major challenges in the development and execution of business plans. In this regard, the report argues that such challenges include financial forecasting, summary and brief contents development as well as market surveys and analysis. 3.1 Financial Forecasting The development of business plans and their eventual success is based on the development of accurate financial estimates. In this regard, investors base their investment decisions on the forecasted financial costs and revenue statements. As such, in the development of financial statements, Khan and Jain (2007) argued that the approach holds a series of factors constant. For instance, the model assumes that international economic growth rates as well as the inflation rates remain on a regular trends approach. In this case, if any of the variables interception changes, the overall forecasts accuracy are compromised. In order to develop appropriate financial forecasts, organisations need to conduct prior forecast on economic, labour, raw materials and supply chain future expected changes. It is only based on a review of these forecasts that organisations could develop appropriate financial forecasting formulas. Therefore, in order to overcome the financial forecasting inaccuracy challenge, the respective organisations should increase funding on other market surveys, which form the basis for an accurate financial forecasting platform. 3.2 Information Shortage An additional business planning challenge is information inefficiency. The acquisition of market primary data through surveys is an expensive data collection approach. In this case, organisations reviewing consumer and competitors’ traits rely on existing secondary sources to develop their reviews and analysis. As such, the information is often insufficient, outdated or irrelevant. Consequently, this information deficiency has a direct implication on the adopted marketing and operational strategies, directly implicating on the organizational and proposed ventures performance and success rates. In this regard, in order to overcome the information search deficiency, organisations should apply benchmarking as a data collection tools. As such, they should review data reviewed by leading ventures in the market to establish the approach, and perceptions used in its data and market reviews. Moreover, the organizational management should strive to increase the overall funding on primary data collection initiatives in the business planning process. 3.3 Content and Summary Skills Abrams (2003) argued that a business plan is a brief and summary representation of an entire business idea. In this regard, the document represents an analyzed perception of an overall business idea as conceived by the innovator. Therefore, in order to establish efficiency in communication between the business idea conceiver and the investors it is imperative for the business plans to adopt clear, simple and concise languages. In a review of language role in business plans, Pinson (2008) stated that the nature and efficiency of business idea communication through appropriate language use differentiated between ideas success and failures. As such, the authors noted that in order to reduce on the miscommunication challenges evident in business plans, developers should seek to use simple language. 4.0 Improvement Recommendations 4.1 Executive Summary One of the most common parts of a business plan is the executive summary. The summary offers a summarized analysis of the plan contents. Most of the investors work under time constraints and an ever increasing pile of business plan proposals in the market. Consequently, most of them review and skim over the executive summaries to determine their interest or disinterests on a business venture. The adopted business plan samples represent an ideal example of well drafted executive summaries. However, the 2MBA business plan executive summary falls short of showcasing the overall financial reviews. Based on this review establishes that the executive summary serves as a key investors attraction tool. This can be further evidenced by Haugan (2013) who argued that a report quality and standards relied on the executive summary contents. Thus, based on these reviews, this report argues that business plans should strive to develop quality and detailed executive summaries to facilitate their overall success rates in the market. 4.2 Operational and Strategic Goals Determination Mortensen and Arlbjorn (2012) discussed on the concept and need for organizational strategies development. In this regard, the authors stated that through the development of both short and long term strategies, organizational direction and visions are easily achieved. As such, in the process of the development of organizational strategies forms a critical business process. Further, Sheehan and Cooper (2011) evaluated the role of strategic management application in organisations. In this regard, the study established that organisations with elaborate strategic management process application such as distinct short and long term strategies development registered increased market success. Therefore, this report recommends that in order to improve on the quality of developed plans as well as the potential of the proposed venture to succeed in the market, business planners should strive to apply strategic management in the distinguishing between short term and long term strategies. In this regard, such an approach would direct the organizational operations both in the short and long term periods. 4.3 Competitors Evaluation One of the analyzed challenges in the development if business plans is a deficiency in competitors’ analysis. In this regard, Hill and Jones (2010) discussed on the roles of industry analysis to the development of appropriate operational strategies. As such, the study revealed that organisations with detailed industry reviews depicted increased success rates. In order to develop a comprehensive competitor’s analysis, organizational ventures need to conduct a porter’s five forces model. Through a porter’s five forces analysis, organisations develop appropriate analysis on the existing and new entrants in the market. Consequently, the report recommends’ that in the development of business plans, business developers should strain to develop appropriate and satisfactory competitor analysis reviews, a step towards business competitive edge development. 5.0 Business Planning Lessons Learnt The concept of business planning is a widely applied business practice in the market. As such, in the process of evaluating and analyzing the selected business plans, I learnt a few important concepts and facts worth application and execution in the development of business plans as well as in their presentation to investors and application in actual business venture processes. In this case, I learnt five key lessons on the concept. Among the lessons learnt include: 1. A revelation that benchmarking allows for deeper industry analysis in business plans development. 2. An establishment that accurate business plans supports the achievement of organizational strategic goals through direction provisions and structured decision making platforms. 3. Business plans play a significant role in enhancing projects investors interests development based on their language and layouts 4. It is important to base the plan on the original and strategic business strategic vision to allow for seamless ideas transfer from the conceiver to potential investors 5. Appearance and presentation of the business plans influence readership rates 6.0 Conclusion In summary, this report has offered an evaluation of business planning process and challenges. In this regard, the report critically evaluates the Eco Clear and 2MBA business plans. In this case, the report concludes that business plans have strengths in their proposed management teams as well as products uniqueness. Moreover, the report establishes that poor marketing strategies and inappropriate business models as the key weaknesses. In addition, the report establishes that business planning faces challenges such as financial forecasting, information shortage, and content summary skills. As a remedy, the report recommends improved executive summary quality, competitors’ analysis as well as use of simple and concise languages. Finally, the report offers lessons learnt reflection indicating lessons such as advantages of benchmarking, role of business plans in strategic decision making and performances and the role of business plan layout in enhancing increased business plan performance and success. References Abrams, R. M. (2003). The successful business plan: Secrets & strategies. Palo Alto, Calif: The Planning Shop. Abrams, R. M. (2003). The successful business plan: Secrets & strategies. Palo Alto, Calif: The Planning Shop. Eco Clear. (1997). Business Plan. Retrieved from Haugan, G. T. (2013). The new triple constraints for sustainable projects, programs, and portfolios. London: CRC Press Hill, C. W. L., & Jones, G. R. (2010). Strategic management theory: An integrated approach. Boston, MA: Houghton Mifflin. Khan, M. Y., & Jain, P. K. (2007). Financial management. New Delhi: Tata McGraw-Hill. Manufacturing & Marketing Beverage Appliances, Inc. (2001). Business Plan. Retrieved from Mortensen, M., & Arlbjørn, J. (2012). Inter-organizational supplier development: The case of customer attractiveness and strategic fit. Supply Chain Management, 17(2), 152-171 Pinson, L. (2008). Anatomy of a business plan: A step-by-step guide to building the business and securing your company's future. Tustin, CA: Out of Your Mind & into the Marketplace. Sheehan, C., & Cooper, B. K. (2011). HRM outsourcing: The impact of organizational size and HRM strategic involvement. Personnel Review, 40(6), 742-760. Read More