Launching a New Venture

This project examines the process of launching a new venture, using the example of Magic Bakers expanding from the UK to Romania. It covers market analysis, resource identification, proposal formulation, skills required, promotional strategies, and financial planning.

Launching a New
Venture

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Identification of specific target market and competitive analysis........................................1
P2 Specific tangible and intangible resources that required for a new venture..........................3
TASK 2............................................................................................................................................4
P3 Formulation of credible proposal to launch a new venture....................................................4
P4: Skills and capabilities required to launch a new venture......................................................5
TASK 3............................................................................................................................................6
P5: Determination of promotional activities and channels for launching a new venture...........6
P6: Formulation of appropriate promotional activities plan for both launch and pre-launch.....7
TASK 4............................................................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
The expansion of an organisation in the global market depends on the innovative idea
formulated by the entrepreneur that will attract the customers in the market all over the world.
The innovation can be constructed with the help of conducting a proper research in the market
place where the business is going to acquire the market. It lead to create the products according
to the demand and preference of the customers in the market according to the policies, rules and
regulations of the market and pricing strategies. The business environment consists of very
complex nature and factors that affect the business activities and they are political and economic
conditions, technology advancement, etc. The report is based on launching a new venture of
Magic Bakers in the market of Romania after tasting the success in the market of UK. The
company produces bakery items like cakes, pastries, fruit chocolate, etc. The present report will
explain the targeted market, evaluation of present competition, tangible and intangible resources,
reliable proposal to present the new venture, required skills and abilities in the entrepreneur, cash
flow and legal norms of various ventures in the market.
TASK 1
P1: Identification of specific target market and competitive analysis
New venture idea
Magic Bakers is successfully established in UK and is producing bakery items on the
huge demand of the customers and now the entrepreneurs is planning to expand its business
venture in the market of Romania as it is analysed that the market is considered good for the
bakery products. The selected city in Romania to launch the first outlet is Bucharest as it is the
largest city of the country. It will help the venture to attract the large amount of customers and
will help the venture to attain sustainability in the market (Caselli and Negri, 2018).
To acquire a new market an entrepreneur is required to have a effective team that will
assist in gathering required information and resources for the successful expansion of the
business venture. To conduct the expansion procedure in the successful manner the entrepreneur
choose partnership to rule the market as, partnership will reduce the risk on the single person and
will provide assistance in setting business in effective manner. The entrepreneur has planned to
buy 1000 sq.ft in the city for a lease of 5 years to function their business activity in more
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smoothly manner. The business venture will require a lot of fund wh9ich will be arranged by the
entrepreneur with the help of banking sector (Duggal and Sassoon, 2015).
Objectives: these objectives are set by the entrepreneur with the consent of it partners and
SMART objectives are defined as follows:
 Specific: Capturing the market share in the Bucharest to attain immense sustainability in
the market for a long period of time.
 Measurable: Achieving 60% market share of 60%
 Achievable: It can be accomplished by supplying best quality of wide range of bakery
items.
 Relevancy: It will help in assisting the business venture presence in the market of
Romania.
 Time Bound: It will take around 5 months to build the market and to analyse the
Targeted market:
The sustainability and profitability in the market rely on the number of customers of the
business venture in the market. To achieve this a proper market research is required to be
constructed to determine the future sales and the evaluation of revenues generated by the magic
bakers in the new market. The population of Bucharest is analysed on the basis of geographic,
demographic and psycho-graphic conditions. As, the company will be producing bakery itmes
so, they have selected geographic segmentation because large population is their to buy the
products.
Geographic: This segment defines the population on the basis of the area where they
live. Magic Bakers is targeting the customers base in Bucharest to attain the market share. The
number of people in the country will increase the sustainability and will allow the company to
gain competitive advantage (Gerasymenko, Clercq and Sapienza, 2015).
Demographic: the population is divided on the basis of age, gender, religion, etc. this is
clearly defined from the demographic segment that the people prefer to buy bakery products of
great quality and different varieties. Thus, the needs and demands of the different customers are
categorised by the magic bakers with their wide range of bakery items.
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Psycho-graphic: this segmentation is based on the lifestyles of the people of Romania.
The customer base targeted by the Magic Bakers are of high and middle class group that prefer
these slightly priced bakery items.
Competitive analysis:
the new venture consists of good quality bakery items like different types of breads,
cakes, cookies, etc. and it also results in tough competition form the rivals already existing in the
market. The competition in the market will also come up with different marketing strategies with
the sole purpose of overruling the new business venture in the market. These rivals will force
hard competition towards the magic bakers and it will be very challenging for the company to
sustain effectively in the market for a long period of time (Géraudel, Gast and Gundolf, 2017).
Competitive analysis is essential for a new venture because it will help them to identify
their competitors in marketplace. It will also assist an organisation to gain better outputs within
given time period and accomplish long term goals and objectives within given time duration.
P2 Specific tangible and intangible resources that required for a new venture
A new venture requires different resources to establish the business in the market in
effective manner. These resources can be divided into two types which are tangible and
intangible in nature. Magic Bakers is the new business venture that produces the good quality of
bakery items like breads, cakes and cookies and the required resources for this are described as
follows:
Tangible resources: These resources consists of the items that can be seen and are
present in the physical form in nature and make a great impact on the establishment of the
business venture in the new market. Tangible resources which are required by the Magic Bakers
are land, infrastructure, funds, bakery equipments, etc. the main tangible resource is fund as it is
very essential to commence a business in the market. These resources are also defined as
follows:
 Physical resources: These are the resources which are considered as basic requirement
for the Magic Bakers to operate their business operation in the market. These resources
are inventories, equipments and various tools for the effective establishment of the new
venture (Kariv, 2013).
 Human resources: these resources describes the workforce that is required by the
business venture to function the business activities in efficient manner. The physical
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resources are interrelated with the human resource as it helps in making the physical
resources use in effective manner. Magic Bakers is required to select skilled employees to
serve the customers in appropriate manner. It is a main resources which is needed by a
new venture. Without this resource, they can not do their business in successful and
systematic manner.
Intangible resources: these resources are not present in physical form but holds a great
impact on the business operations as the production of good quality products helps in developing
good relation with the customers. It will help in gaining competitive advantage for the company
in the market. These resources are goodwill, patents, rights and the intellectual rights (Kuratko,
Hornsby and Hayton, 2015).
TASK 2
P3 Formulation of credible proposal to launch a new venture
The business person who is planning to launch a new business venture is require to
construct a strong proposal which should define the real objective of the business. This proposal
is formulated with the help of specialist in the managerial areas so, that the business objective is
clearly defined to the work force of the company. It will assist the Magic Bakers members in
providing knowledge about their duties which will lead in effective outcome for the business in
desired period of time.
The constructed credible proposal of Magic Bakers are describes as follows:
Executive Summary Magic Bakers is a well established business in the market of UK and is
now planning to expand its business to Romania to gain high market
share. The expansion in Romania is decided with the help of proper
research of the market and different segments of the people living there.
Company description Magic Bakers is a small and medium sized business venture of UK and
commence the business operation of producing and selling bakery items
like varieties of breads, cakes, cookies, etc. further, the business is
planned to set up in the Bucharest city as it is the largest city and have a
good demand for the bakery products.
Market Analysis The market environment consist of dynamic in nature and brings a lot of
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challenges for the new venture in the market. The presence of different
influencing factors like political, economical stability, managerial
assistance, etc. are required to be analysed effectively in predetermined
manner. This can be analysed with the help of SWOT and PESTEL
analysis. It is most essential and important part for new venture because
with the help of this, they can easily analysis needs and wants of
customers towards their product.
Financial projection The business person is required to construct a effective cash flow
statement to identify the actual requirement of the cash in the new
business venture. The funds can be generated with the help of different
sources with the help of introducing new partners to the business,
banking industry and from the investors.
Benchmarking Forecasting the environmental factors helps the entrepreneur to
construct a goal that will be required to accomplish within a set period
of time. It helps in generating motivation among the employees and
leads in increasing their productivity and to achieve the objectives in
effective manner. Magic Bakers will be able to sustain in the market for
a long period of time only if the desired objectives are clearly defined to
the workforce .
P4: Skills and capabilities required to launch a new venture
To establish a new business venture it is necessary to develop effectual plan of action that
will assist the organization to maximise its market share and to accomplish success in the market
which will be earned by the businessperson only if they will dwell with proper skills and
knowledge of the market. The required skills are explained as follows:
Management Skills: These skills are considered as crucial for the business new ventures
to begin business with success in the market along with efficacious utilization of resources. The
management skills are compulsory to manage the manpower and to encourage them to work in a
proper directions. This ability will help the businessperson to designate the responsibility
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appropriately and it will allow to specify the task efficaciously to them. With the assistance of
this skill Magic Bakers will be competent to fulfil the desired objectives. These skills can be
inherited by the entrepreneurs with the aid of various management programs and conferences
that will result to maximise the knowledge and working skilfulness (Kuruzovich and Lu, 2017).
Management skill help a new venture to manage their all resources such as human resource,
technology resources etc. it will assist them in its future growth and development.
Decision making skill: decision making skill is required to measure the different
business consequences that are struck due to the decision taken inside the business structure.
Decision making skill will help the businessperson to develop appropriate decisions accordant to
the business environment and will vantage to help Magic Bakers in gaining advantage in the
market and will permit it to continue for a long period of time. Decision making skill can be
inherited by the businessperson by experiencing the challenging situations that need immediate
decisions to bodily process it and to reform the efficiency in the business.
Leadership skills: This skill is needed to hold the manpower in effectual manner as it
will result in motivating employees to work with full dedication and will lead in achieving the
desired objectives of the business venture. It will also increase the productiveness of the workers
as well. The businessperson of Magic Bakers will need these ability to keep the smooth working
of the business organisation and to maintain great social relation with the work force unit. This
skill is acquired by the assistance of effective communicating channel within the business
venture, optimistic attitude and clear sight for the desired objective (Simon and Shrader, 2012).
Risk-taking skills: As, the market is flourishing it is causing a reason of generating
strong competition for the Magic Bakers in the market and it also brings risk that can result in
affecting the business operations in the market. Risk taken can be resulted in positive as well as
in negative manner for the business venture. The businessperson of Magic Baker is needed to
feature these ability so that requisite risk can be taken efficaciously that will consequence in
rising the business share in the market. This ability can be inherited by facing tough conditions
and acquiring proper knowledge of the market.
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TASK 3
P5: Determination of promotional activities and channels for launching a new venture
The promotional activities are conducted to spread the information about the business
activities and the available products and to commence this in successful manner Magic Bakers
need to conduct different promotional activities on the various platforms that are explained as
follows:
Social Media Platform: On this platform an entrepreneur is able to generate the
information of the potential customer base in very easy manner and also they can promote the
products served by the business venture to a very wide base of people on the social media and
can attract them by giving different benefits to the customers on their purchase. These platforms
include social sites like Facebook, Instagram, whatsapp, twitter, etc. as these are mostly used
sites by everyone in today's world (Talebi, 2011). Social media will help a new venture to easily
introduce their products and service to customer and in marketplace.
Mobile Billboards: This also considered as one of the important tools in the promotional
activity and is used to attract the customers towards the bakery products with huge demands. For
this the business person of Magic Bakers are require to formulate punch lines, logos, posters,
stickers, etc. to be recognised in the market effectively.
Personal promotions: these promotional activities are considered to be more reliable in
attracting the customers in effective manner. The personal promotion technique invites people to
come and taste the bakery items on the opening of the venture with the help of advertising using
pamphlets, catalogues, etc. this will lead in creating a strong purchasing power in the market and
will build good relations with the customers.
P6: Formulation of appropriate promotional activities plan for both launch and pre-launch
Before launching the new business venture the entrepreneur is required to prepare an
effective plan and appropriate strategies in advance to attract the customers towards the products
produced by the Magic Bakers. So, it is required to construct a promotional activities which are
defined as follows:
Pre-launch: this is defined as the time when the business venture is not established and
the business person focuses on attracting the potential buyers. To commence this the
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entrepreneur is required to develop the web site of the venture and proper advertising activities
are required with the specification of the products and their pictures. It helps the audience to
assess the reviews of the previous customers of the business unit and to gain the knowledge of
the products (York, O'Neil and Sarasvathy, 2016).
Launch: This is the final stage when the business is set to enter the market and the
entrepreneur of Magic Bakers is required to launch an opening function and it should invite the
different representatives form different media platforms to carry the advertisement for the
business venture on large basis. The general public is also invited and it helps the
businessperson to interact with them and easily explain them about the products.
Financial consideration to start a new business venture:
The financial consideration is very important to consider at the time of launch of the new
business venture by the entrepreneurs of Magic Bakers and this consideration includes:
Minimise overhead: the entrepreneur of Magic Baker is required to limit the expenses in
the starting and it is possible to cut down the unnecessary expenses which has no positive
outcome on the business venture.
Track and monitor spending: It is important for an entrepreneur to manage the funds in
appropriate manner and to spend the money on effective things that will cause benefit for the
business venture in effective manner. This can be done with the help of maintaining records of
the transactions that are incurred in the business activities (Yu, Chen and Nguyen, 2014).
Invest appropriately: the entrepreneur is requires to make proper investigation before
investing the funds in the market. These decision are required with the investment in the
infrastructure sector for the business. The appropriate investment will result as the benefit for the
business venture and will lead in keeping the financial condition of the company in effective
manner.
Maintain cash reserves: businessperson can trust on lines of credit and loans fro the
financial institution but it is always considered better to have liquid assets. To commence this it
is required for an entrepreneur to make judgement in respect of maintaining cash reserves for the
future use of the company. For example, making stellar purchases at the time of economic
instability increases their liquid assets effectively (Launching a new venture, 2018).
TASK 4
P7: Monthly cash budget for the pre and after launch phase
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Cash Budget is an calculation related to the acquiring of funds from various sources
accordant to the necessity to set up business of Magic Bakers in Romania market. It is necessary
to construct a budget to prevent the condition of inadequacy of funds and conduct business
dealings in a smooth manner. It leads to eradicate the situations of wastage of funds and increase
the usage of the available resources in effective manner. Therefore, it is necessary for an
businessperson of Magic Bakers to formulate a Cash flow budget at the time of establishment
and after 12-18 months which are given as under:
Pre launch cash
budget
Cash Flow
budget
Particulars Jan Feb Mar Apr May June
Cash inflows
Investment 8000
Credit sales 2000 3000 3000 4500 1500 3500
Total inflows 10000 3000 3000 4500 1500 3500
Cash outflows
Fixed :
Equipment’s 2000 2500 1500 2000 1200 1500
Variable :
Direct material 300 300 200 300 150 500
Total outflows 2300 2800 1700 2300 1350 2000
Net cash flow 7700 200 1300 2200 150 1500
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Opening
balance 0 7700 7900 9200 11400 11500
closing balance 7700 7900 9200 11400 11550 13000
Particulars July August September October
Novembe
r
Decembe
r
Cash inflows
Investment
Credit sales 4200 1000 2000 800 1200 1500
Total inflows 4200 1000 2000 800 1200 1500
Cash outflows
Fixed : Equipment’s 800 200 300 100 600 300
Variable : Direct
material 300 400 500 100 100 400
Total outflows 1100 600 800 200 700 700
Net cash flow 3100 400 1200 600 500 800
Opening balance 13000 16100 16500 17700 18300 18800
closing balance 16100 16500 17700 18300 18800 19600
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Post launch cash
budget
Particulars Jan Feb Mar Apr May June
Cash inflows
Investment 8000
Credit sales 1200 2000 7500 3000 5000 6500
Total inflows 9200 2000 7500 3000 5000 6500
Cash outflows
Fixed : Equipment’s 2500 1200 1500 2500 1100 1500
Variable : Direct
material 350 300 250 150 100 500
Total outflows 2850 1500 1750 2650 1200 2000
Net cash flow 6350 500 5750 350 3800 4500
Opening balance 0 6350 5850 11600 11950 15750
closing balance 6350 5850 11600 11950 15750 20250
Particulars July August
Septembe
r October
Novembe
r
Decembe
r
Cash inflows
Investment
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Credit sales 1200 3200 1500 8200 1250 3210
Total inflows 1200 3200 1500 8200 1250 3210
Cash outflows
Fixed : Equipment’s 1200 600 500 500 1200 700
Variable : Direct
material 500 250 450 250 1300 500
Total outflows 1700 850 950 750 2500 1200
Net cash flow -500 2350 550 7450 -1250 2010
Opening balance 20250 19750 22100 22650 30100 28850
closing balance 19750 22100 22650 30100 28850 30860
CONCLUSION
It can be summarised for the above given report that expanding a business venture in the
new market is very challenging task for an entrepreneur even if the business venture is successful
in one market and it requires very effective planning in commencing the set up of new venture in
the market. The new business venture requires resources which are tangible and intangible in
nature for the success of the business venture. The entrepreneur requires new innovative ideas to
attract the customers in the market. The entrepreneur is required to consist of various skills and
abilities in order to attain the competitive advantage in the market. The report consist of cash
flow statement that is required to be formulated to conduct the business activities in effective and
efficient manner.
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