MGMT13151 The Economy of Australia
- This is an individual recorded presentation of no more than.
- There is also a business modelling and planning component with a word length of 2000 words
- Week 8 Friday AEST
- This individual written assessment is designed to:
Provide you with the opportunity to use your understanding of theoretical concepts to plan an innovation or start-up of your own.Develop your critical thinking, research, and written and oral communication skills.
- Identify a ‘hypothetical’ business opportunity that if you had the funds, time and drive you would pursue as a business start-up. This should be an idea you believe has the potential to become a business for you to own and grow.
- You are required to:
1.Provide a brief description of your idea. .Evaluate the viability of your new start-up through a brief feasibility analysis.Use a business model template to illustrate elements important to building your business.Formulate a business plan to organise and manage your new start-up.Record a 3-4 minute ‘pitch’ of your new start-up.
Answer:
As the economy of Australia keeps on growing, businesses are opening branches in various parts of the country. The branches need to liaise with head office and engage in regular exchange of documents and other parcels. However these business have their staff very much committed in their duties to achieve the organization’s goals and objectives, and therefore have little time to transit the parcels and documents. Therefore there is need to have a courier service provider who will be reliable in terms of safety of parcels, delivery time, and cost of delivery among others (Wang, Jie, & Abareshi, 2015).
The above need leads to the idea of Supersonic & Safe Ltd Company which will be a courier services business that will be offering parcel, documents, and goods delivery services to both organizations and individual persons within and outside Australia. It will be incorporated as a private limited company in Australia through following the company registration process and obtaining Australian company number. According to Mirvis, Googins, & Kinnicutt (2010), the company’s mission will be “We ensure fastest and safest delivery of your parcels”, the vision will be; “To be the leading and most trusted parcel delivery company in the world”. The core values that will guide the company in its operations include; Honesty, Integrity, Availability, time consciousness, Social responsibility, Accountability, and Ethical conduct among others.
The company will start with a single office which will be based in Sydney and will later open up branches in all the states of Australia, and even globally (Kautonen & Palmroos, 2010). However, even with the single office, the company will be offering its services all over the country. The company will adopt technology in its main operations and business processes as way of penetrating the market and gaining a competitive edge. It will be operating in the transport services sector and its main mode of transport will be road transport, in which it will be using Vans, pick-up trucks, Lorries, and motor
cycles to deliver the clients documents and parcels to their desired destination.
Supersonic & Safe Ltd will adopt all ethical standards as set by the local agencies and international standardization bodies such as the International Organization for Standardization (ISO) in order to ensure that the quality of its services is indisputable (Hartman, DesJardins, & MacDonald, 2011). The company will be compliant to all Australian laws that relate to its operations in order to avoid legal conflicts with the government.
Feasibility Analysis
The Australian courier industry already has other players but they don’t operate as efficiently as Supersonic & Safe Ltd will be operating. Many of them only offer delivery services within the towns in which they are based (Wang, Jie, & Abareshi, 2014). This makes them to be less viable to large Australian corporations or even international organizations which want their parcels to be delivered to long distances (Kowalska, 2014). Also, many of these companies that just operate within their local towns, have limited operating hours since they are mainly small-scale businesses. This leaves a market gap for a reliable and readily available courier services company.
Secondly, some Australian courier service companies which operate beyond their local towns, have fixed transport schedules. The rigid schedules make the clients to wait to for a period of over one week before the courier company can go back to the route in which their parcel is to be delivered (Ducret, 2014). This is very inconveniencing to the clients who need urgent deliveries especially private hospitals, financial institutions, insurance firms, law firms, and others. Such clients end up being dissatisfied with the courier company and a ready to shift to a more reliable company that values them.
Thirdly majority of existing courier Companies in Australia suffer from security issues and packaging challenges. This result to loss or damage of client’s parcels during transit or while in the courier company’s warehouse. Low security reduces customer trust on the company thus minimizing the chances of repurchase (Wang, Jie, & Abareshi, 2014). Packaging challenges are mainly as a result of not having suitable vehicles to transit goods such as electronics and other goods that require special handling.
The Strengths, Weaknesses, Threats, and opportunity (SWOT) analysis of Supersonic & Safe Ltd shows how it will be viable in the market by filling the market gaps noted in the above analysis of existing companies as follows;
Strengths: these refer to the positive internal characteristics of the organization that it can maximize on to achieve a competitive advantage. According to Brooks, Heffner, & Henderson, (2014), they include; having a variety of transport vehicles including special vehicles to transport goods that require special handling. This will play a major role in ensuring safety of clients’ parcels thus promoting quality of service offered. Secondly, the company will have a website that enables clients to book for parcel delivery services online and pay using online payment systems (Turban, Sharda, & Delen, 2010). This will enable the company to have a wider market penetration.
Thirdly the company will hire highly skilled personnel to execute the organization’s operations. The fourth strength is that the company will adopt data analytical technologies to analyze client’s data such as purchase trends in order to promote quality decision making and customer relationship management (Turban, Sharda, & Delen, 2010). The fifth strength that the company will have is a flexible schedules to meet customers’ needs.
Weaknesses: the major weakness that Supersonic and Safe Ltd will have in its first year of operation is lack of branch offices in the major Australian cities (Kowalska, 2014).
Opportunities: They include; Adoption of blockchain technology and enterprise resource management to manage the freight and all other stakeholders, use of social media marketing to penetrate the market and increase market share (Turban, Sharda, & Delen, 2010), enlarging the operations of the Company to go beyond Australia through franchising and agency contracting, and diversifying the investment to even incorporate clearing and forwarding services, among others.
Threats: the characteristics of the external environment that may thwart the operations of the business include (Brooks, Heffner, & Henderson, 2014); competition from existing courier companies which have a wide market share, change in tax laws that may affect pricing, jurisdiction that may deter the company from expanding its operations to a particular country, among others.
Business Model Canvas Template
|
Key Partners Online payment companies
Software developing and support companies.
Vehicle assembly companies.
Sales Agents. Commercial banks
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Key Activities · Marketing the organization. · Contacting the customers. · Picking clients’ parcel. · Safeguarding clients’ parcels. · Delivering the parcel to the desired destination. · Notifying the client about successful delivery
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Value Proposition · Timely delivery of parcels. · 24/7 availability. · Safe delivery of client’s parcels. · Best pricing. · Flexible and customer oriented delivery schedules. · Quality services. |
Customer Relationships · Offering Discount to regular customers · Regular update on the progress of the delivery process · |
Customer Segments · Local customers; Business organizations, non-profit organizations, government agencies, and individual persons
· International customers. | |
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Key Resources · Finances · Delivery vehicles. · Drivers · Marketers · Managers · Website · Tracking devices · Communication channel · Intellectual property protection · Brand |
Channels · Service provider/producer- customer
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Cost Structure · Wages and salaries · Commissions paid to Agents · Marketing cost · Fuel cost · Administration cost · Licensing and registration cost · |
Revenue Streams · Parcel delivery charges | ||||
Key partners according to Osterwalder & Pigneur (2010), refers to the parties who will work together with Supersonic $ Safe Ltd to deliver value to its clients. The online payment system will provide a secure and reliable payment system that the clients will use to pay for the services received. The company will have three such online payment systems which are PayPal, Skrill, and Payoneer. The software development and Support Company will develop and maintain the Company’s information systems such as website, ERP, and online booking system.
The vehicle assembly companies will sell vehicles to the companies and service them. The company will partner with three companies which are Isuzu, Toyota, and Volkswagen. Sales agent will help the company in reaching a wider market (Armstrong, Adam, Denize, & Kotler, 2014), they will be paid commission for every business that they bring to the company. Commercial banks will secure the company’s funds, provide loans when needed, and facilitate payments to the company’s account by customers.
According to Muhtaroglu, Demir, Obali, & Girgin (2013), the key activities incorporates the major activities that Supersonic & Safe Ltd will engage in. Value proposition shows the value that the company will be delivering to its target market. It is this value that will make the company to outsmart its competitors in the market (Osterwalder & Pigneur 2010). Customer relationship represents how the company will be relating with its customers in order to gain customer loyalty, attract a repurchase, and attract referrals (Zolnowski, Weiß, & Bohmann, 2014).
Customer segments refers to how the company will divide its target market, in which case the company will have two major segments and four sub-segments in each segment (Osterwalder & Pigneur 2010). Channels represent how the company will distribute its services to the customers (Dudin, Kucuri, Fedorova, Dzusova, & Namitulina, 2015). Cost structure represents the major costs that the company will incur in its operations. Revenue structure represents the major sources of income for the company (Osterwalder & Pigneur, 2010).
Business Plan
Company Summary
Supersonic and Safe Ltd will be a courier service company that will have its headquarters in Sydney Australia and will be offering its services globally.
Company Ownership
The company will be a private corporation owned by investors through the purchase of shares.
Startup Summary
Supersonic & Safe will incur the following start-up costs:
- Delivery vehicles which will be two pick-up trucks, two vans, three motorcycles and a lorry at a total cost of $ 143 000.
- Legal fees for registration and incorporation which is estimated at $2000.
- Furniture including three desks, three chairs, a bench, and three file cabinets at a total cost of $5000.
- Website and secure online booking systems =$5000.
- Reliable internet connection =$2000.
- Three telephone lines and messaging services =$1000.
- Annual Salaries, wages, and commissions= $90000.
- Annual operation expenses = $5000
Total start-up cost is $253000.
Services
Supersonic & Safe Ltd will be offering document, parcel, and goods delivery services. The services will be available to the clients anytime they need it in order to cater for emergency deliveries (Brinckmann, Grichnik, & Kapsa, 2010). The company will only be handling goods below six tones.
Market Analysis Summary
Supersonic & Safe Ltd target market will consist of Businesses, Non-profit organizations, government agencies, and individual persons.
Market Segmentation
Supersonic & Safe Ltd will have two major market segments which are; Local market and International market. The local market will be composed of deliveries within Australia. International market will compose of deliveries outside Australia.
Marketing Strategies
The marketing strategies will be grouped into two which are:
Market penetration: the strategies for increasing the market share they include; advertisement, word of mouth referrals, product promotion, loyalty schemes, driving out competitors through competitive pricing, and increasing the sales force through agency contracting (Armstrong, Adam, Denize, & Kotler, 2014).
Market development: these are the strategies aimed at selling the services in new markets, they include; creating new marketing segments by adopting different pricing policies, expanding to new geographical locations, and customization of services to suit the needs of the new markets.
Strategy and Implementation Summary
In order to achieve a competitive edge in the market, Supersonic & Safe Ltd will adopt two main strategies which are;
Cost leadership: This will involve reducing the cost of operation without compromising quality of the services offered (Tanwar, 2013). This will maximize on profits and therefore encourage more re-investment of the retained profit.
Differentiation: This will involve offering services in unique way such as having flexible delivery schedules, guaranteeing safety of parcels, delivering parcels on good time, offering after-sale services, favorable pricing and 24 hours 7 days a week availability (Tanwar, 2013).
Management Summary
Supersonic & Safe Ltd will be governed by a board of directors which will constitute of five members. They will be in charge of formulating organizational goals, objectives, and strategies to be followed (Goetsch & Davis, 2014). The company will then have the following employees to run the daily operations; The Chief executive officer who will be the strategy implementer and in charge of all the other staff members (Goetsch & Davis, 2014), the marketing manager who will be in charge of all matters related to marketing and product development, the Human resource manager who will be in charge of human resource recruitment, training, and development, the operations manager who will be in charge of the daily operations, five drivers, three motorcycle riders, sales agents, and seven administration assistants.
Financial Plan
Startup Financing:
The initial cost of starting the business which is $253 000 will be obtained from investors who will invest in the company (Robb & Morelix, 2016). The investors will then get return on their investment in form of dividends. After the first year of operation, the company will have generated sufficient profit to cater for its recurrent expenditures/operational costs.
Projected Sales
Supersonic &Safe Ltd is expected to make a total annual revenue of $239 000 which will surpass the operating cost with $144 000. The company will, therefore, have paid off the initial investment cost within a period of two years after which the company will start re-investing profits. After 10 years of operation, the company is expected to make $120 000 monthly.
References
Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson Australia.
Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning–performance relationship in small firms. Journal of business Venturing, 25(1), 24-40.
Brooks, G., Heffner, A., & Henderson, D. (2014). A SWOT analysis of competitive knowledge from social media for a small start-up business. The Review of Business Information Systems (Online), 18(1), 23.
Ducret, R. (2014). Parcel deliveries and urban logistics: Changes and challenges in the courier express and parcel sector in Europe—The French case. Research in Transportation Business & Management, 11, 15-22.
Dudin, M., Kucuri, G., Fedorova, I., Dzusova, S., & Namitulina, A. (2015). The innovative business model canvas in the system of effective budgeting.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. Upper Saddle River, NJ: pearson.
Hartman, L. P., DesJardins, J. R., & MacDonald, C. (2011). Business ethics: Decision making for personal integrity and social responsibility. McGraw-Hill/Irwin.
Kautonen, T., & Palmroos, J. (2010). The impact of a necessity-based start-up on subsequent entrepreneurial satisfaction. International Entrepreneurship and Management Journal, 6(3), 285-300.
Kowalska, K. (2014). Non-market factors of competitiveness of transport, freight forwarding and logistics companies,". In Forum Scientiae Oeconomia (Vol. 2, No. 5).
Mirvis, P., Googins, B., & Kinnicutt, S. (2010). Vision, mission, values. Organizational Dynamics, 39(4), 316.
Muhtaroglu, F. C. P., Demir, S., Obali, M., & Girgin, C. (2013). Business model canvas perspective on big data applications. In Big Data, 2013 IEEE International Conference on (pp. 32-37). IEEE.
Osterwalder, A., & Pigneur, Y. (2010). Business model canvas. Self published. Last.
Robb, A., & Morelix, A. (2016). Startup Financing Trends by Race: How Access to Capital Impacts Profitability.
Tanwar, R. (2013). Porter’s generic competitive strategies. Journal of business and management, 15(1), 11-17.
Turban, E., Sharda, R., & Delen, D. (2010). Decision Support and Business Intelligence Systems (required). Google Scholar.
Wang, M., Jie, F., & Abareshi, A. (2014). The measurement model of supply chain uncertainty and risk in the Australian courier industry. Operations and Supply Chain Management, 7(3), 89-96.
Wang, M., Jie, F., & Abareshi, A. (2015). Business Logistics Performance Measurement in Third-Party Logistics: An Empirical Analysis of Australian Courier Firms. International Journal of Business and Information, 10(3).
Zolnowski, A., Weiß, C., & Bohmann, T. (2014). Representing Service Business Models with the Service Business Model Canvas--The Case of a Mobile Payment Service in the Retail Industry. In system sciences (HICSS), 2014 47th Hawaii International Conference on (pp. 718-727). IEEE.
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