The purpose of the proposed business venture is to create a stationery product that will succeed in the current market. The current product development process has innovated stationery that values the notes written on such product. Notes Restore is stationery that allows crumpled notes to be recovered. The business understands that keeping the notes intact between activities is a hard task. Hence, Notes Restore aims to protect the important details without worrying about safekeeping the stationery in folders and envelopes.
The initial budget required for the business is USD1 million. The stated fund is needed to finance product development, acquisition of materials and equipment, hiring of personnel, and provision for other expenses. The business intends to be self-sustained after 2 years of operations. Product development will require 6 months and distribution will begin at the start of 2nd year of operations. By the end of the 3rd year of operations, the Company expects that 500,000 units are distributed in the market.
The Company is a medium-sized firm that operates in 3 strategic segments. The administrative department handles activities such as finance, human resource enhancement, and managerial tasks. The department is also in-charge of handling legal issues and public relations. The marketing department is responsible for sales and product development. The division is considered as the creative minds of the firm. The other division of the Company includes operations and product handling and delivery.
Notes Restore is an innovative product that combines stationery features and reliability. The product is enhanced with capabilities that allow users to fold or crumple the stationery and still restore the notes. This product is perfect for people on the go and brings only pen and paper with them. The product is designed to reduce the use of folders and envelopes. Notes Restore can be placed in pockets and still retain the quality. Users just need to spread the folded Notes Restore stationery and press it with a book or any hard object.
The Company intends to use the most advanced technology in stationery making. This is important to ensure that the products are of high quality. In addition, the product development team will be accorded with the necessary equipment to continuously develop the product. The production system will be lean to eliminate waste and excess stages. Moreover, a strict inventory system will be implemented to monitor the flow of product distribution.
The paper materials to be used for the product are 100% recycled. This is part of the Company’s goal to be socially responsible. The paper to be used will be sourced from junks and other household papers. The chemicals used will be assessed to ensure safety. The Company will directly purchase the materials from houses instead of commercial junk shops. This is a cheaper endeavor and also adds to the income of households. In addition, the Company will also contact offices that sell used papers.
Human resources that create value, rare, inimitable, and non-substitutable are vital components in sustaining competitive advantage (Barney, 1991). The Company considers this notion as the backbone of the firm’s personnel plans. Since the product is creative, it is only necessary to hire the best employees available in the market. In addition, the Company will include training and customer service enhancements to workers. This is necessary to establish relationship with other market entities.
The Legal Issues
The most important issue of legality related to the business in the product patent. The Company understands that there several innovations that are similar to what the firm will produce. Notes Restore will be registered as a patented product in the proper government agencies. Aside from the patents, the firm will secure other documents to ensure the legality of the Company. All necessary files will be accumulated to prevent future problems.
Porter (1980) introduced the concept of five elements that seeks to analyze the competition in the industry. The threat of new entrants involves market openness to new players. Compared with other industries, stationery manufacturing is rarely viewed as a profitable venture. Hence there are limited interests as to penetrating the industry. The substitute to stationeries provides the most threat. The emergence of the Internet as communication tool has affected the industry. Electronic mails are preferred because of convenience.
The bargaining power of the consumers relates to buying capacity and preference. Consumers have been meticulous when choosing for stationeries. The issue of value for money is often emphasized in this process. The bargaining power of the suppliers highlights the ability of suppliers to meet the demand of clients. Recycled paper is abundant and acquired with less cost. Competition is stiffed and intensified by substitutes and industry luminaries such as Post It. Some customers are also traditional and views stationeries as luxury.
Value adding is an important process that improves the products and services of the Company. The additional value provided to the services is important in controlling the market. There are two value adding activities that the Company provides to up the quality of services. The first involves the provision of perks and privileges to clients. Increasing the value for money is an important aspect that the Company attempts to provide. Aside from the quality products, loyal customers will be accorded with discounts and other promotional gifts. This important is building that trust with clients.
The other value adding activity performed by Company is customer services. Other stationery firms consider the sell-buy transaction as the final engagement between customers and the firms. But the Company believes that continuous communication is a key to long-term success. The Company will be in constant connection with customers to ensure that the promises of Notes Restore are delivered. In addition, the Company will seek for comments and suggestions to further enhance product quality.
Marketing is a major activity that drives firms to success. Appropriate marketing strategies are critical in bringing in consumers. There are several methods used by companies to enhance marketing initiatives. Some firms have opted traditional print and broadcast strategies. These companies have been hiring creative minds to further expand the scope of these conventional methods. In addition, firms have decided to directly reach the consumers through various promotional activities and road shows.
Marketing audit is considered as a vital component of marketing processes. Brownlie (1993) stated that it is the initial stage in undertaking managerial initiatives in marketing. The focal point of the marketing audit is its design which ultimately determines the process in performing such method. Marketing audit is a systematic and comprehensive approach that evaluates the marketing initiatives of the company. This is manifested to identify possible problems in the organization, personnel, and marketing activities.
Market Targeting and Segmentation
Positioning refers to the perceptions developed in the minds of the target market. The process entails the creation of image of the brand and the entire firm (Trout and Rivkin, 1996). Market positioning is purely procedural and relies on the completion of stages before making further improvements. The initial stage involves the definition of the firms’ target market. There are three important segments that are being targeted by the Company. These comprise of students, young professionals, and business executives.
Aside from the specific targets, there are specific general clients that the Company will try to penetrate. The first include government offices which require stationeries and other similar products. Since government notes needs to be protected, Notes Restore is a suitable product for their disposal. Another important group of clients include private offices. These are vital institutions that use stationery in their activities. The Company will attempt to project Notes Restore as a product of need.
Marketing Action Plan
The marketing group will be the department in-charge with the planning and implementation of the plan. The marketing group identifies the specific roles that other groups will assume to avoid confusions. Most of the tasks will be carried out the marketing group along with the approval of minor change that is required in the plan. The marketing group will be further divided into smaller teams and provided with responsibilities. This is a basic assumption because there are tendencies that other departments intervene, which in effect will cause disharmony and will eventually dampen the efforts in the marketing plan.
Combining the different aspects associated to marketing is vital to the company. The development of marketing plan entails strategies that are design to ensure consistency in the quality of performance. The first aspect that has to be considered is the price of the product. Despite the high quality of inputs used by the company, the price of the services has been competitive. The company has to devise better strategies to reach the lower echelon of the market. This means increasing demand and extending the market beyond the current targets.
Combining the different aspects associated to marketing is vital to the company. The development of marketing mix entails strategies that are design to ensure consistency in the quality of performance. The first aspect that has to be considered is the price of the product. The Company plans to sell a pad of Notes Restore as $2. A pad contains 100 leaves and packaged similar to papers used in schools. The price of Notes Restore will still be subjected to change as the introduction commences. The final market price will be determined after all inputs needed are provided and accounted.
Promotional activities have to continue using all the options available. Television is an effective media and providing print advertisements is highly recommended. Most important, the company has to focus its promotional initiatives on the extensive use of the Internet. Aside from being cost-effective, the strategy has worked for most firms in the industry. Online advertising is important because the scope that the Internet covers is wide. Such market coverage is needed to fully introduce Notes Restore to the public.
Aside from traditional advertising, the Company will bring Notes Restore directly to the market. There are two locations where Notes Restore will be demonstrated. These include schools and offices. The Company will provide shows in these locations to explain the benefits provided by Notes Restore. Sample products will also be provided for testing. These road shows are needed because competition is strong. The best way to be known in the market is to grab the attention of the customers.
Operations management is defined as the design, operation, and improvement of the system that creates and delivers firms’ products and service combinations. Moreover, it deals with the proper allocation of resources and the strategic acquisition of technology. Some managers contend that the external environment is too influential to be ignored. Operations management also includes the proper consideration of the outside entities as contributing agent that will eventually affect the performance of the firm. The external environment consists of the customers and other economic indicators.
The analysis of operations management is critical in the success of firms. In fact, some practitioners have instituted organizations that specifically tackle issues concerning operations management. There are strategies implemented to ensure that quality is maintained. In addition, operations management provided an avenue for the company to continually grow. The Company recognizes the importance of operations as catalyst for efficiency. Processes and systems are valuable to sustain success and eliminate failure.
Focus on Quality
Quality is an aspect that is highly maintain in the Company. The Company knows that there is a need to attain quality results in all the process of production (Deming, 1986). The technical process pertains to the emphasis of quality in the different stages of operations. The rationale behind this strategy is that the continuous inclusion of quality in the process will result to highly competitive and superior products.
To boost quality of Notes Restore, the Company will ensure that high quality materials are used. In addition, the Company will use the best equipment to limit waste. There are several stationery-making machines that came to the market. Selecting the best is one of the challenges that the Company needs to achieve. In terms of the processes, the Company intends to cut some stages of production to reduce cost. Core production activities will be maintained and some enhancements will be provided.
Inventory handling is one of the most important aspects that require attention. Among the inventory schemes used, just-in-time inventory is the most preferred. This method has been used by the biggest firms and has enjoyed success. The Company will rely on orders instead of producing excess pads. The cost effectiveness of this method is proven and this aspect is valued by the Company. The Company will determine the demand through initial orders and make adjustments as demand increase.
The role of planning in the Company is clearly defined. Before any activity is pushed, the personnel undergo massive planning stages. Planning is done because uncertainties in the market are abundant. The technical process of realising strategic management is divided into two areas. The first phase regard planning as course for intended strategy and the patterned actions are the realised strategies. The second part involves implementation and possible changes on the activities maintained.
Product development has to produce a master plan. The master plan will detail the manner in which the available resources will be used to make the project succeed (Hormozi, et al., 2000). The primary attributes that has to be promoted in this stage are aggressiveness. In addition, the components of the project have to be defined. The objectives, tasks, and resources have to be managed effectively. Enhancing the morale of the individuals tasked to perform the project through tem-building will boost the changes of success.
Corporate Social Responsibility
Corporate social responsibility (CSR) highlights the duty of the organisations to their stakeholders. CSR also details the necessity for organisations to develop and maintain relationship with stakeholders. Aside from good corporate governance, this is observed through quality performance (Van de Ven, 2006). The Company’s goal is to involve households in the process of production. The supply chain of the firm requires used papers coming from houses, schools, and offices.
Human Resource Management
The primary task of Human Resources Management is to seek for competent applicants that will contribute and make a difference once hired (Miller, 1987). HRM practitioners identify suitable training schemes that are designed to improve the skills and competency of the employees. HRM revolves on the creation of programs that will keep the employees loyal and productive. This task has been expanded as HRM practitioners have been accorded the capacity to settle employee related disputes.
Financing is considered as the life of firms. Without financial capital, it is difficult to attain the goals of the company. There are several aspects that need to be considered in this section. Funding source is an aspect that requires analysis and meticulous study. The financial projections are also important. Financial success is valuable because it is the most tangible evidence of success. Assets and liabilities are also financial elements that are included in the projections. The same go with cash inflow and the sales as the distribution of Notes Restore progresses.
As a start-up, the financial budget is valued at $1 million. Of this amount, $800,000 will form the assets and $200,000 for other expenses. From the total asset value, $500,000 will be dedicated to non-cash assets. In addition, cash will amount to $250,000 and additional $50,000 for contingency. At present, the liabilities of the Company are still undetermined. The initial capital will be funded by the Company’s existing retained earnings. The assets will be comprised of machineries, equipment, and delivery vehicles.
Assets are valued as fair market. Depreciation method used for the assets is straight line. The portion of the assets includes patents and materials. The cash is used for short-term financing and requirements for materials. The firm will also use the cash for marketing initiatives. Contingency is provided to fund some unexpected expenses. This is important to ensure that the business is operating even in uncertain periods.
Profit and Loss
The revenue of the Company will mainly come from the sales of Notes Restore. The initial goal of the Company is to sell 100,000 pads of Notes Restore after 3 months of production. The size of the first Notes Restore is 3”x5”. The Company plans to add a smaller size at 2’’x2” and a bigger size at 6.5”x9. The 3”x5” Notes Restore is sold at $2 per pad. The Company plans to sell the 2’’x2” pad at $.85 and the 6.5”x9 pad at $3.25. In addition, the Company charges extra for personalized Notes Restore pads.
The cost of the Company will come from two sources: administrative expenses and operations expense. The administrative expense will mainly cover employee compensation, legal fess, utilities, marketing and promotions, and other miscellaneous expenses. The operations cost will include any expense that is incurred by the operations. These expenditures are mostly related to materials, equipment, machineries, delivery, and maintenance. The Company projects that 67% of the expense will be incurred by the operations and 33% administrative.
Break Even Analysis
The selling and distribution of Notes Restore will start after 1.5 years from the start of the operations. The initial goal of the Company is to accumulate $1 million in sales after the 3rd year. In doing so, the Company has to sell a number of Notes Restore within the desired period. At $2, the Company has to sell at least 350,000 units of 3”x5” Notes Restore valued at $750,000. The other part of the target will be covered by the two other sizes. The contribution of the 2’’x2” and 6.5”x9 Notes Restore is less because of late production.
Cash flow is another important aspect that needs to be considered. In the initial year, the company expects cash inflow of $0. This is expected because the product has yet to reach the market. By the second year, cash inflow is valued at $300,000. The inflow of cash will pick up in the third year since $700,000 is projected to be returning to the company. In terms of borrowings, the Company will seek loans when opportunity for short-term financing occurs. Improving the firm’s creditworthiness is another important element.
Preventing failures in reporting financial information requires the development of quality financial reporting systems (Burns, 2006). Effective financial reporting system allows stakeholders to accurately evaluate the financial ratios and other information relevant to decision-making. Also, effective financial reporting clearly shows the value of the company. Even without the usual promotional activities, firms can easily invite investments through the precise figures presented in the financial report. The Company will implement accounting procedures based on prevailing legal requirements.
The systems used are critical because it serves as the framework used for the preparation. Also, the individuals taking part of the process has to develop some sense of honesty, responsibility, transparency, and accountability. The principles and guidelines have to be constantly evaluated and reviewed to determine their conformity to the changing demands of stakeholders. Institutions have to contribute their share to ensure that accounting practises remain basic and financial reporting is classified as accurate in form and in substance.
Project Implementation and Evaluation
The product life cycle is characterised as the process of creating concepts, development of the ideas to finished products, and terminate the products. Project managers usually divide the process into stages so that projects are managed with efficiency. The project reaches a point of maturity as it is exposed to several stages of production. The cycle includes the point of inception until the project is terminated. Each phase independently functions and overlapping is observed as a rare situation.
The initial stage involves the development of Notes Restore. This is the start that is manifested by the product development team. The team considers several aspects in developing Notes Restore. Competition and financial capacity are the primary considerations. The returns and possible sustainable growth of the product are also viewed meticulously. The development takes time and will require 4-6 months. The specified time is needed to properly evaluate the opportunities and threats in the market.
The production stage has four phases. The first segment includes buying of materials, machineries, and equipment. The second part of the production seeks to develop the first Notes Restore. The first batch of Notes Restore pads will be tested and demonstrated to the public. After quality checks, evaluations, and suggestions, the Company will go to the final production phase. This stage will take 8-12 months of the firm’s schedule.
Distribution and Enhancements
The initial delivery process will be carried over the Company and retail stores. The distribution will first focus of paper stores before moving to specific clients. After the three Notes Restore pad sizes are determined to be successful the Company will introduce additional sizes. The firm will be planning to increase the size of stationery to legal size. Moreover, the firm will develop stationery that will surpass the recover capacity of Notes Restore. Future stationery will include water-proof and fire-proof capabilitites.
Assessing marketing performance is an increasingly important task for managers and other corporate stakeholders. The use of financial schemes has three significant functions (Otley, 1999). Multi-disciplinary perspectives on performance measurement are increasing the attention given to non-financial measures of performance in general. Measures traditionally used by managers were inappropriate given the modern manufacturing environment. Changes in technology and working practices resulted to the assigning overheads on the basis of direct labor resulted in wildly erroneous product costs.
Benchmarking provides cost savings in executing operations and its support of the organization’s budgeting and strategic planning process. Benchmarking is designed to leave the past behind and embrace the future. The benchmarking process has many defining features (McNair and Leibfried 1992). In order to benchmark effectively, a company needs a strong strategic focus and some flexibility in achieving management’s goals.
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