Question:
Write an essay on Business Management.
Business management is one the critical functions of an organization. Management is one of the areas, which determine the efficiency and productivity of the organization. It determines the future scope of growth and success of the organization. Business management is more critical and important for small sized business ventures and organization. They require critical insight into the various business activities and initial set up of the business organization. In such situations, the various elements of operational activities needs an in depth analysis and scrutiny from the management team (Bridge & O’Neill, 2012). Thus, one can infer the importance and significance of business management in case of small sized business.
The following essay and study focuses on the business performance of Philosophy-T. It provides critical evaluation and analysis of the business performance of Philosophy-T and undertakes to provide necessary recommendations to improve the business operations and strategies of the company.
Philosophy-T is functioning under the Massey University. The company follows the practice of printing the inspirational and educational quotes on the t shirts and the targeted market is student, family and friends. It follows the policy of spreading educational knowledge. The business strategy of the company utilized the focus differentiation strategy and differentiates it product from other commercial projects. It is an educational project and undertakes to differentiate its product on the lines of inspirational and philosophical quotes imprinted on the T shirts (Scarborough, 2012).
Certain people were needed for providing expertise in the field of financing, market research, inventory management, web designing, other designing and creative skills, planning and organizing, customer features, online market research and so on. These expertises were required by the business for conducting its operations and functions.
The web design follows the format of a small sized retail shop. The foundations on which sites are made are a reformed version of WordPress and the site name selected for the site is the philosophytshirts.com. The business venture was an amalgamation of the business concept matched with a learning purpose. The company could not use PayPal as the payment system under the rules of the university. Therefore, it was important for the company to formulate a good platform for setting up a concise and comprehensive platform. The philosophical quotes on the t-shirts have an educational story behind it and it was uploaded and mentioned on the websites. This lent a clarity regarding the central idea behind the venture.
Sustainability is one of the primary focuses of the venture. It focuses on the development of sustainability in the branding strategy and the company stresses on the need of developing eco brands for highlighting the sustainability strategy of the company. The company has no visual image and has been extensively striving for developing a visual image and logo of the company. Thus, presently the company is functioning without any official logo or visual (Glackin, 2013)
Students voted on different quotes that could be printed on t shirts. The most voted and famous quote was – “be the change you want to see”. Four designs were selected for the t-shirt. Two designs were selected with William Blaque’s quotes. A local t shirt was printer was approached for printing the quotes on the t-shirt.
The local t-shirt printer reverted with a reply on the cost of t-shirt. The price of print per t-shirt was fixed at $4. The common t-shirt provided was Gildan, with the cost of t-shirt being $7.50. The other cost in the venture was the Film and screen set up. Philosophy T-shirt needed to evaluate the number of quotes that were required for screen set up and film. The cost of screen set up and film was fixed at $40.
The initial price for print per screen has been estimated to be $40 per screen. It has viewed that the print man could fit 2 designs per screen. Therefore 3 screens were needed in the initial period. Therefore, the cost per screen was estimated to be $120.
The cost for hosting a web site was estimated to be $ 356. The cost for each printed t-shirts was $11.50. The venture decided to produce 120 t-shirts. Therefore, the total cost for printed t-shirts were $1380. The total outlay cost of the venture was estimated to be $120+$1380+$356= &1856. Therefore, the company had to incur an initial cost of $1856 in the initial period for production (Winkel, 2013).
The total production of the venture was 120 t-shirts while the total cost of the company was $1856. The fixed cost of the company was estimated to be $15.47. The company incurred no variable costs or other overhead. No overhead costs were incurred in telecommunication aspect or any other variable section. Therefore, the company incurred only fixed cost. This depicted the cost structure of the company (Carland et al. 2015).
The company evaluated and assessed the fact that no variable or overhead existed for the company. This led the company in fixing and evaluating the selling price per unit. The company decided to follow a 100% mark up on the t-shirts since it was a normal practice for a retail business to do. It was estimated the selling price per t-shirt was $31.
The company evaluated that since the turnover did not exceed $ 60,000; there would not be a situation of incurring Good and service tax. It was inferred that the selling price per t-shirt was fixed to be $ 30. Thus, in such circumstances, there was no scope of providing goods and services tax by the business venture.
Posting and packing was a cost incurred by the company and since the venture included the posting and packing cost on each purchase, it was included in the initial cost outlay. The rationale behind this was the payment of packing and posting cost paid by the customers. Thus, it did not affect the profitability and turnover figure of the company.
The breakeven analysis of the company depicted a few images. The company incurred only fixed cost and no variable cost. The company produced 120 t-shirts and fixed a selling price of $30 per unit. The total cost of the company was $1856. Therefore, the breakeven analysis was $1856/ 30= 61.87. This reflected the fact that company needed to sell 62 shirts to attain the breakeven point. This meant that the company needed to sell 62 shirts to overcome the initial outlay cost. The company was following a 100% mark up value on the t-shirts. Thus, whatever the venture sold after 62 t-shirts would be the profit of the company. Thus, the overall turnover for the venture was $3600. The profit of the venture was $1744 for the company.
The business has relied on a static websites for the sales it has generated. Overall a total of 120 t-shirts have been prepared. 25 t-shirts have been sold and delivered. No sales have been observed and recorded in the last 14 days. Complaints have been received by the venture for the long period involved between order and delivery. The time period involved in a delivery on an average has been 14 days. Therefore, it can be seen that the company suffers from a loophole in this regard. The venture follows a policy of no return and no guarantee on the products (Glackin, 2013). This is another cause of complaints for the customers since they do not get any images and demand a wide array of choice of designs for the products. A web designer suggested that an application could be developed where the customers could use a drop down menu for choosing a design and image regarding the products. This could increase the satisfaction within the customers.
The profit in the initial stage would be provided to the investor after which it will be provided to a charity chosen by the students. There is no other alternative for making money from the project. The business does not utilize any referral methods and the only method of creating awareness of the product was website and word of mouth (Winkel, 2013).
The venture faces certain challenges. These were lack of key staff having technical expertise, no after customer service proved by the company, long time period involved in delivery, turnover of key staff, lack of sales, no effective IT solution, lack of marketing strategy using social plan and lack of choice for the customers. The venture had no brand recognition and faced stiff competition from other competitors in the same industry (Chaston, 2014).
Some recommendations that could be provided to the venture would be an integration and adoption of e-commerce and social media. The use of e-commerce could hike up the sales of the venture and sales promotion could be actively used on social media sites. The delivery period needs to be reduced. This could be achieved by utilizing lean management process. Certain unnecessary procedures could be eliminated, which could fasten up the delivery process and also reduce the cost involved in delivery process. Thus, this would reduce the grounds of complaint and grievance from the customers and also increase the efficiency of the business. Retention of key staffs is an important aspect for the organization to ponder on. Staff could be retained by increasing the morale of the staff. The motivation aspect has to be stressed on by identifying the needs and wants of staff and satisfying those needs and wants. The remuneration of the staff could be hiked, which will play a vital role in the retention of the staff. The business needs to hire and utilize the expertise of member have key technical and financial knowledge. This would lend critical help in the evaluation and assessment of strategies. Better decision making tactics could be utilized by the companies in formulating better techniques and strategies regarding production and sales of the product. People possessing marketing knowledge could be utilized so that marketing of the products could be done better by the company. The business needs to stress on providing after sales service and follow the policies of return of products. Customer satisfaction should be the primary focus of the business. An application needs to be developed where customers can have a wide array of choice of designs for the t-shirts and a drop down menu could be used for implying the use of images of the t-shirt in better selection of products by the users. The business venture needs to realize the necessity of creating brand awareness and this could be utilized by employing extensive and impactful advertisement of the products, so that it leads to an increase of sales and also allows the product to survive competition in the market.
Conclusion
On concluding the report, it is seen that the venture is a learning proposal with philosophical quotes printed on the t-shirt. It can be observed that the venture is still in its nascent stage and is undergoing changes before establishing its hold in the market. The venture does not have any employees and does not incur any variable cost with no telecommunication services. The venture utilizes a static website for incurring the sales. The company only incurs fixed cost and there is no use of social media for sales purpose. The company suffers from stiff competition and enjoys no brand awareness. There is complaint from some customers regarding the time period involved in delivery of t-shirts. The company produces 120 t-shirts but there is no enough sales generated by the company. Therefore, it can be concluded that the company is still in its initial stage and needs to overcome the challenges and loopholes existing in the business and apply remedial measures to overcome it.
Reference List
Bridge, S., & O’Neill, K. (2012). Understanding enterprise: Entrepreneurship and small business. Palgrave Macmillan.
Carland, J. C., Carland, J. W., & Stewart, W. H. (2015). Seeing what’s not there: The enigma of entrepreneurship. Journal of Small Business Strategy,7(1), 1-20.
Carraher, S. M., & Paridon, T. J. (2015). Entrepreneurship journal rankings across the discipline. Journal of Small Business Strategy, 19(2), 89-98.
Chaston, I. (2014). Small business marketing. Palgrave Macmillan.
Colombo, M. G., Laursen, K., Magnusson, M., & Rossiâ€ÂLamastra, C. (2012). Introduction: small business and networked innovation: organizational and managerial challenges. Journal of Small Business Management, 50(2), 181-190.
Gaskill, L. R., Van Auken, H. E., & Kim, H. S. (2015). Impact of operational planning on small business retail performance. Journal of Small Business Strategy, 5(1), 21-36.
Glackin, C. (2013). Entrepreneurship: Starting and Operating a Small Business, 3e.
Glackin, C. (2013). Entrepreneurship: Starting and Operating a Small Business, 3e.
Goss, D. (2015). Small Business and Society (Routledge Revivals). Routledge.
LiPuma, J. A., Newbert, S. L., & Doh, J. P. (2013). The effect of institutional quality on firm export performance in emerging economies: a contingency model of firm age and size. Small Business Economics, 40(4), 817-841.
Lohrke, F. T., Franklin, G. M., & Kothari, V. B. (2015). Top management international orientation and small business exporting performance: The moderating roles of export market & industry factors. Journal of Small Business Strategy, 10(1), 13-24.
Lohrke, F. T., Franklin, G. M., & Kothari, V. B. (2015). Top management international orientation and small business exporting performance: The moderating roles of export market & industry factors. Journal of Small Business Strategy, 10(1), 13-24.
Scarborough, N. M. (2012). Essentials of Entrepreneurship and Small Business Management. Instructor.
Winkel, D. (2013). The changing face of entrepreneurship education. Journal of Small Business Management, 51(3), 313-314.
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