Discuss about the Entrepreneurship Wain Stores Business Plan.
The current business plan is based on the medium scale company, which is specialised in the production and distribution of the technological production concerning the particular components. The organisation will be emphasising on the technological concept by targeting certain needs of the customers. The organisation will be dealing in the technological product in the IT sector. The business anticipates commencing its operations out with a few employees and gradually expands into the industry.
Wain Stores hopes to be a medium scale company that specializes in the production as well as distribution of technological products and their specific components. The company will target the ever-changing technological concept fronted in the current world through focusing on certain needs and wants exhibited by the people (Wei et al., 2014). Through this, Wain will be able to reach out to different individuals with interests in the IT sector. The company will also offer consultancy services with regard to review and updating of software, databases as well as network administration. It will require its staff to posse’s high-end skills that are required in the market, hence, making them competent to effectively deal with the challenges brought forward in the industry.
The status of Wain remains a viable business idea which tries to seek funds and capital from investors. The business plan hopes to convince various individuals with an interest in the IT sector to consider investing in the business. It will help Wain achieve its overall objectives and targets. The company hopes to start out with a few employees and gradually grow into the industry.
The IT industry has greatly grown over the years due to the significant advantages it offers to companies. The growth has allowed an increase in the companies that produce IT products as well as subcontracting their services. This growth rate, however, has not affected the industry since other industries have continued to grasp the concept and integrate IT in production and distribution (Patterson, 2012). This is because IT is considered fast, accurate and reliable as compared to human resource. Consequently, predictors explain an increase in the sales projections in the coming years if the trend continues.
The IT industry in Mauritius is structured in a direct manner where the consumers have direct access to the products from the company. It has eliminated the case of brokers and middlemen who inflate the prices of products (Saad, 2010). Companies have taken upon themselves to produce, package and distribute their products directly to the customers. Thus, the consumers get the products at the best price possible. Additionally, the industrial structure has helped eliminate the problem of counterfeit products that find their way into the markets in the case of intermediaries and brokers. Such products undermine the credibility of the legitimate products and services as well as encouraging black markets. Thus, the industrial structure has played a big role in ensuring that the companies are protected. The major participants and stakeholders include Microsoft, Apple, EAX Agile Solutions and Accenture. They are considered major stakeholders in the IT industry in the country and engage in active decision making activities with regard to matters affecting the companies.
The major key success factor in the industry is the ability of a company to come up with new ideas and mechanisms for service delivery. Inventions and innovations are integral parts of the success of any company. The move involves establishing of proper methods of enhancing quality in the final output (Johnson, 2014). In this regard, it is vital that the company establishes measures to protect invention ideas through patents. In an industry where products are closely related, a slight change or improvement in the product will have a great overall impact on the customers. The introduction of the internet has revolutionized the IT sector through making the world a global village (Lazzarini, 2015). Current trends in the industry in Mauritius involve the use of social media to reach out to different groups of people across the world. Online marketing has also emerged along with ecommerce where products are bought and sold across the internet. Additionally, customers are able to easily get to know specification about the products through the internet.
The IT market ranges from a variety of individuals with computer and internet needs. Products and services offered in the industry make it unique and easy to predict the customer demands at a given time. The market is segmented with regard to needs as well as the relevant financial prowess and social status of the customers. However, age and gender have very little impact with regard to the needs of the customers since most of the products and services cut across the groups (Davenport, 2013). The financial prowess of the individual, for instance, would enable them to go for expensive phones and computers, which are considered fast and possess a higher memory (Nadvi et al., 2015). The situation also applies to the internet where higher finances enable one to go for high-speed connectivity.
Consumers in the industry in Mauritius also tend to go for newer products. There is a higher demand for product change as new products are considered better and more effective as compared to the previous ones. Thus, consumers will tend to go for the latest products and services launched by the company (Nadvi et al., 2015). The consumers in the industry also exhibit brand loyalty and it is usually difficult for a company to convince them.
Wain faces competition from other established companies with a higher financial prowess. These companies have an existing customer bases who exhibit loyalty to their products. Consequently, it is difficult for the company to break into the market without proper and effective strategic measures. Companies such as Microsoft, EAX Agile and Accenture have been operating in Mauritius for a long time and have significant support bases. Therefore, it is imperative that proper strategies are put in place which will help guarantee the overall realization of the company objectives and targets with regard to the IT industry.
The company needs a comprehensive market plan that would aid in its desire to conquer the IT market in the country and also globally. It hopes to be a medium scale producer within the first year of operation, hence, requiring strategies to counter the financial challenges. The aspect would put it at a great disadvantage especially when facing competition from already established companies such as Apple (Bloom et al., 2014). Thus, Wain will try to adopt a marketing plan that will guarantee the results with the limited budget it faces. Additionally, the adopted plan will also guarantee both short and long-term goals in the company, which help it a great deal. The plan, moreover, will incorporate current trends and developments in the industry as well as inclusion of innovative practices (Fleisher et al., 2015). It is important that the company deviates from the norm to easily reach out to the market.
The company products need to be of high quality to easily compete with the established firms. It is important to make a proper impression to the customers in order to cement a loyal base. Thus, Wain will try to avoid possible cases of faulty or poor quality products. Such aspects turn the customers away and make it difficult for the company to cement its position in the industry (Galbraith, 2011). The pricing of the products, too will be considerate of the prevailing conditions. It is important that the prices set by the company are within the industrial regulations. The company will try to avoid unfair practices by inflating or severely deflating the prices of its products. In the case of reduction in prices, caution shall be exercised since reduced prices can mean poor quality products.
Promotion is also an important aspect in the marketing strategy. Wain needs to engage in vigorous product promotion activities through focusing on current trends such as use of social media. The company will directly engage the customers to determine their needs and, therefore, produce according to them (Hanrahan et al., 2013). This enables the customers understand that they are valued and appreciated. Promotion by the company will focus on distinguishing the products from the competitors as well as explaining the new products and any improvements on the previous one. Product distribution, additionally, will try to reach out to the customers directly (Lin et al., 2011).Wain needs to maintain the current industrial practice involving little use of the middlemen and brokers. It allows the customers to receive products and services within the shortest time possible as well as the best prices.
Board of directors
Wain will be managed by a board of directors that will be responsible for the oversight of the daily activities being conducted in the company. The board shall deal with setting up of strategies according to the company cultures and traditions. Moreover, it will be the duty of the board to see to it that these strategies are implemented by the relevant departments and people involved (Prajogo, 2012). The directors will also deal with hiring of competent employees who best fit the job description and posses the relevant expertise and experience. In other cases, they may also terminate the employee’s contract in the event that they breach the regulations and code of conduct. The board will be elected by the shareholders to represent them and the interests of the entire company.
There will also exist the board of advisors that will comprise independent strategists with a wide range of expertise regarding management of companies especially in the IT sector. The advisors will act as intermediaries in the company’s operations with other industries (Truck, 2013). They will advise the board of directors with regard to certain decisions to be made concerning the company. The board takes up an informal nature, therefore, allowing for flexibility in structure and management. Their main roles will be provision of strategic direction, guiding quality management and assessment of program effectiveness.
Wain will take up a matrix company structure with various departmental heads tasked with different activities. The managing director will be the head of daily activities and oversee the daily implementation of strategies developed by the board (Borghoff & Pareschi, 2013). The director reports to both the board of directors and board of advisors. The departmental heads fall under the managing director and include the general stores manager, procurement manager, project coordinator and the production manager. These heads will oversee independent activities in the company which focus on the overall goals of the company. They report to the MD and are responsible for setting up independent strategies to ensure achievement of their targets as a department (Awaludin et al., 2016). They will also be required to work with the stipulated budget and ensure its full implementation. The departmental heads will also ensure that their employees comply with the rules and regulations and will see to it that the overall company objectives and targets are achieved in the fiscal year
Wain shall take up a vigorous approach to operations with a strict focus on quality of the output. The move reiterates the mission of the company to revolutionize the world through IT. Consequently, it will encourage its employees to focus on production of quality output and services. To ensure this, the company shallconduct periodic training programs which see to it that the workers skills are improved. The programs also allow the employees to be oriented on trends and developments in the industry, which help in production activities. Additionally, customer relations will also be highly regarded in the company. This is especially to the distributors who interact daily with the customers. It is important for the company to ensure customer satisfaction through proper relations and building of trust (Dahlstrom et al., 2013).
The company will also try to engage in social activities to ensure it fulfills its corporate social responsibility. This involves charity work and support of community enriching activities. Wain hopes to conduct annual seminars where young children are introduced to IT at a young age. The programs will involve introducing them to coding, database management, network administration and basic computer engineering. The company, additionally, shall highly regard its immediate environment and will strive to ensure that it avoids possible cases of pollution brought about by its activities.
The company shall strategically locate its businesses next to city centers to ensure easy target of the markets. The urban areas have been labeled as metropolitan and hence, easy customers of the company. The location makes it easy to attract the various companies located in the CBD. Additionally, the company shall establish an online platform where customers who cannot physically locate the premises can be served. It is important to have such a platform as it helps reach out to a wider audience despite geographical differences. Moreover, it enables the company increase its sales and create a good reputation which earn it referrals in various situations.
Wain will enlist various assets which help in the daily running of the company. The assets enhance continuity of the company activities over the period. Additionally, stores where its products will be kept will be properly guarded to help deter any form of unauthorized entry. The same security measure shall be enhanced in its various facilities and equipment in the various areas that they are located. This guarantees the company of trust from its customers and other companies that may have contracted its services at a particular time.
The company’s development plan hopes to explore other aspects of information technology to effectively advance its agenda. The plan incorporates various aspects seen as the future of IT such as cloud computing and advanced coding. The move will see to it that there is full utilization of available resources in the advancement of the mission and vision statements shared by the company. It also hopes to design complex gadgets and equipment that are taunted as the future of communication in the world. Wain will also invest in research programs which seek to help solve global problems such as climate change and terrorism. The company believes that technology can play a huge part in solving some of these long term problems. Consequently, it will try to collaborate with renowned organizations of humanitarian aid to help find a lasting solution to some of these problems.
However, the company will face some daunting challenges and risks in the course of advancing some of these projects. Cyber terrorism is a major risk in the IT industry. There have been cases of hackers gaining illegal access to company information and selling them to the highest bidder. Such a problem can potentially damage the company especially if such information lands on the competitor’s hands. Wain, therefore, will set up effective mechanisms to guarantee its online security. It prevents possible cases of blackmail or force out of the industry. The fact that it will not be widely known may be difficult for it to seek for financial aid from established organizations sharing similar concerns with regard to existing global problems.
Wain understands the importance of protecting its intellectual properties from third parties. Therefore, it will instruct legal help to assist in protection of its ideas and concepts. The legal team outsourced by the company will see to it that the company formulates an idea, reviews its viability and implements it without possible violation of the law or conflict with another company. Moreover, they will assist the company cover aspects related to trademarks and patents (Terpstra et al., 2012). The aspects prohibit a third party from reproducing the company products without their consent or even claiming a particular idea.
Wainwill mainly rely on sale of its products as the main source of funds. The company will ensure that it produces durable and high quality products to ensure that it receives considerably high amount of funds. Additionally, the company will also offer consultancy services to companies seeking to set up computer system. Itwill advice on possible hardware and software as well as effective easy to ensure that the overall goal is achieved (Van riel et al., 2011). In other situations, the company can also be contracted to review and update software system of companies and institutions.
The financial statements in its books of account exhibit the company’s financial prowess. They explain the fact that Wain is in a good position to engage in business activities. The affirmation confirms that the company can effectively engage into contractual services as well as reiterating its capability to handle the various production activities. Additionally, the move will help it acquire loans from financial institution which it can use to effectively further its goal and overall mission objectives (Peppers & Rogers, 2012). The company shall also allow periodic audits which help affirm its compliance with laws and regulations.
Income statement assumptions:
The financial document will be based on assumptions as well as projections. It helps the business to see various effects associated with financing options. Wain will hugely rely on these documents to assist in the making of viable investment decisions. They include the pro forma balance sheet as well as the cash flows.
From the assumptions made in the financial statement it is found that the total amount of non-operating income consists of sales revenue generated in the first financial year of the business. It is found that total income for the first financial year consisted of $75,000 after deducting the cost of sold comprising of 25,000. In the subsequent year it is found that sales revenue is projected to be 125,000 where the organization may incur an additional cost of goods sold of 35,000. The total income arrived for the second year comprised of 90,000 with 105,000 in the subsequent year. The expenditure consists of the operating expenses comprising of advertising cost, interest expenses, office supplies etc. These cost are related with the cost of business operations. The total amount of operating expenses generated for the first financial year consists of the 15,275 followed by 16,525. In the third financial year the business is projected to incur the total non-operating expenses of 17,825.
Wain will also rely on ratio analysis to help understand and gauge its performance in specific departments. They are usually characterized as short term solvency, debt management, asset management and profitability. They will help the company establish independent measures in each department.
The financial ratios consist of the Debt ratio, which is derived by taking into the considerations the total liabilities against the total assets. The debt ratio projected by the business is 0.58 and 0.54 for the business with total amount of debt being 25,000 for the first financial year. On the other hand, the current ratio consist of the current assets and current liabilities with 2.40 and 3.00 being incurred for the first and second financial year. The working capital ratio is computed by subtracting the current assets against current liabilities. The working capital ratio for the business consists of 2.00 for the first financial year followed by 3.00 in the subsequent year. The total asset to debt ratio is computed with 2.41 and 2.17 being projected respectively for the business during the span of two working years. The debt to equity ratio takes into the consideration the owners equity against the total amount of liabilities. The debt to equity ratio for the first financial year consists of 1.41 for the first financial year with 1.17 for the second year. Thus, the ratios has been computed in accordance with the business operations which helps in determining the business viability over the considerable period of time.
Conclusion
The business plan, therefore, is seen as a viable option for investors seeking to engage in the IT industry. It demonstrates its capability to rival established companies in the industry. Additionally, through its management, it will be able to venture into various activities which help generate income and also guarantee its survival and continuity in the future. The move makes it easy to engage possible partners who help in the overall achievement of the goals and objectives. Additionally, the company will also demonstrate its willingness in the fight against global problems such as terrorism. Other companies in the industry should support the move. However, there are also certain problems, which may hinder the full realization of the goals and objectives. These problems need to be properly addressed to ensure an overall realization of objectives.
References
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