Impact of government policy in transport provision Question Answer 2022

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Supply chain
Student
Course
University
Date

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Q1. Relationship between transport attributes and their strategic relevance in terms of
economic
In developed countries, a well-structured transport network is key to development. A
transport network is a structure that connects different transport modes, which include roads, air,
water, and pipeline transport, therefore, facilitating movement 1 . The attributes that are
commonly used to gauge the performance and quality of different modes of transportation are;
frequency, travel time, accessibility, comfort, cost, reliability, customer services, service
information, and safety. Economic policy is a measure that the government uses to influence
economic activities in the country, such as setting the level of taxation, government budgets, the
supply of money, and distribution of income.
The relationship between transport attribute and their strategic relevance in terms of
economic policy is that transport industry is among the income-generating and therefore
contribute to the economic growth of the country2. This is because most modes of transportation
are made easily accessible, reliable comfortability to users and at an affordable cost. Customer
services offered by these modes also promote their usage, and hence, government gains through
taxation. The economic policy set by the government towards the transport sector is the key to its
infrastructure development. Therefore, transport development depends on economic policy.
1 D. Berlyne, Fleet management. In Washington, D.C., ICMA, 2002.
2 , Button & D Hensher, Handbook of transport strategy, policy and institutions. In,
Amsterdam, Elsevier, 2005.

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Q2 impact of government policy in transport provision
Government policy concerning transportation is a plan or course of action used as a basis
for decision making concerning the transportation sector 3 . This policy has an impact on the
transport sector, whereby regulating the rate of both local and foreign investment and eventually
having an impact on economic development. The keys areas where the government policy has a
role in the transportation industry are; environment, infrastructure development, safety and
security, trade regulations and investment.
Environmental role of the government policy is that it set the standard on engine emission
on locomotives such as trucks marine engines and aircraft, all this are done to achieve favourable
emission to the environment the aim is to conserve the environment by reducing gases emitted to
the air by vehicles that consume large quantities of energy especially oil4. The government's role
in safety and security in the transport industry is very much important, for instance, the rules set
for drivers, hours of operation on the roads, the standard of vehicle required on roads. The safety
measures put in place and monitored closely, such as vehicles, must have adequate working
safety belts and encourages their use to reduce death when an accident occurs.
3 P. Baere, & E Voorde, Transport economics. In, Berchem, de Boeck, 2016.
4 T, Moschovou, "Freight transport impacts from the economic crisis in Greece.". in
Transport Policy, 57, 2017, 51-58.

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Infrastructure development is one of the most vital requirements of the government to
improve its transport industry and the economy as a whole. Income gained from the transport
system is then used by the government to build and maintain infrastructures such as roads,
railways, bridges improving highway systems, ports, and lighting at the terminals. The
government also involves the transport industry through the trade regulation role. This affects the
movement of goods in and across the borders of the country, such as the trade regulations that
bar some Chinese goods in the USA5. The government plays a significant role in regulating both
local and foreign investment in the transport industry through imposing taxes on fuel and
financial aids provided to encourage investment in the industry.
5 L, Biagi, F Grec, & M Negretti, "Low-Cost GNSS Receivers for Local Monitoring:
Experimental Simulation, and Analysis of Displacements.". in Sensors, 16, 2016, 2140.

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Q3. Difference between regulation and deregulation of transport
Regulation of economic activities has been in practice for long. For many reasons, the
government imposes policies to ensure these activities are appropriately monitored 6 . Regulation
of transport is a process where measures are provided by the government through laws to control
transport. The transport industry is regulated by controlling the entry and exit of all vehicles in
and out of the country, and this move is to safeguard people from price discrimination, provide
stability and protection to the transportation firms in the country. The challenge to this regulation
is that it is difficult to comply with the government regulations to get approved at permit. These
regulations vary from one country to another. Some of the ways by which the government
regulates the transport industry are through taxation, quotas, and trade tariffs. Economic
regulation is a way by which the government restricts other carriers in their operations in the
transport industry.
Deregulation of the transport system, on the other hand, is the process in which the
government removes or reduces the regulations or laws regarding transport 7. Deregulation grants
financial freedom to traders as they can move goods freely in and out of the country and trade
without fear in the international market, it has also improved globalization of market with
intermodal transport service in place to accelerate supply and distribution of goods across the
border ensuring constant production.
Q4. Regulatory measures for the means of transport
6 B. Bradshaw & H Lawton Smith, Privatization and deregulation of transport. In, New
York, St. Martin's Press, 2000.
7 Z Taylor & A Ciechański, "Deregulation in Polish Rail Transport.". in Transport
Reviews, 26, 2006, 305-324.

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There several means of transport also known as modes of transport, these are the methods
by which passengers and freight are moved from one place to the other, they include road, rail,
water, and air. The government has several regulatory mechanisms that are used to achieve a set
quality standard 8. This is known as the qualitative regulation where the regulatory authority
intervenes by formulating criteria by which to regulate the behaviour within the market. The
laws are enforced, and their breach attracts penalty, either financially or permanent expulsion
from the market.
The qualitative regulatory measure on road transport is the speed restriction which
regulates the speed of vehicles on the rods by use of speed limit, the restriction on road users
such that that requires the drivers to have a valid driving license and regulation on the condition
of the vehicle to use them on roads as some are rendered road unworthy9. Failure to comply with
any of these regulations attracts fines or withdrawal from the industry. In air transport, the
regulation on safety requirements and standard that the operators in the aviation have to adhere
to, to ensure the quality aspect is appropriately maintained.
Health and safety regulations imposed on the rail transport industry prioritize the safety
of passengers and employees by providing regulatory standards or frameworks that the players in
the industry must comply with In order to operate in the industry10. The regulations that require
8 R Wong, W Szeto, L Yang, Y Li, & S Wong, "Public transport policy measures
for improving elderly mobility.". in Transport Policy, 63, 2018, 73-79.
9 A. Kyriacou L Muinelo-Gallo, & O Roca-Sagalés, "The efficiency of transport
infrastructure investment and the role of government quality: An empirical
analysis.". in Transport Policy, 74, 2019, 93-102.
10 H Spraggins, "SAFETY IMPLICATIONS OF NORTH AMERICAN RAIL
TRANSPORT OF CRUDE OIL.". in Review of Business Research, 16, 2016, 19-

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marine operators to comply with such as environmental regulations regarding water usage, also
safety measures requirements besides other regulations on competition that monitors competitive
nature of the players in the industry
Q5. Current methods of preventing anti-competitive practices
Competition is an act of striving to outperform or gain something by establishing
supremacy over others. Competition improves the quality of products and services offered to the
customers and establish stability in prices, among others. Anti-competition practices are
practices that aim to reduce, restrict or remove competition in the market, and these practices
include; price-fixing and price limiting, bid-rigging, boycotts, disparagement, dividing territories,
dumping, among others.
The anti-competitive practices have no one cap fits all solution to combat the problem,
except the case of unlawful and unethical practices such as spying and theft, which are security
issues and can be handled through the administration of law on security11.
The government has antitrust laws that are generated for competition within the domestic service
industries. These rules often stretch beyond borders, and their implementation requires countries
to cooperate application of these laws will reduce anti-competition within and among the
collaborating countries. Having a transition economy-based business will help create a conducive
and fair competitive environment. Companies in the industry can also be whist blowers in case of
26.
11 M. Sahu "Anti-Competitive Practices in Oil and Gas Downstream Sector
(Presentation Slides).". in SSRN Electronic Journal, , 2014.

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any anti-competitive practices. Political reforms can be used whereby ensuring this reform
considers the most pressing need, such as tackling anti-competitive issues in the country.
Q6. External bodies that influence transport policy
The government makes policies in an attempt to regulate transport industry, and this
process must involve external bodies or stakeholders in the industry whose views are often
considered during the policymaking process, the external bodies include environment
conservation agencies, human rights agency and international transport organizations 12 . The
environmental agency has a role in ensuring that the policies formed to adhere to environment
conservation standards. The policies should aim at reducing level pollution in the environment,
such as noise, air, and water pollution.
Human right agency is a body with fundamental protection of human dignity, needs, and
freedom. Transport industry is one of the major employers and plays a crucial role in the
international trade, this poses challenges to human and requires human rights agency
involvement, the risks involved that require the agency intervention during policymaking are;
human trafficking during movement of goods and passengers, forced labour, working conditions,
discrimination, security forces employed should avoid security abuses on passengers bribery and
corruption.
International transport organizations are institutions established and governed by international
law such as international freight forwarders association, IATA(International Air Transport
Association) , ICOS( International Chambers Of Shipping), IRTU (International Road Transport
12 C. Kamala Essays in the Economics of Transportation Policy. In Berkeley, CA, 2011.

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Union) are among the organizations that influence the policymaking process because they play
an essential role in facilitating trade in the transport sector13. These external bodies enable the
creation of efficient, reliable, and fair to the players' policies in the transport industry.
Q7. Fleet management
13 A, Kirova "THE ROLE OF THE INTERNATIONAL TRANSPORT IN
FOREIGN TRADE REALIZATION.". in MEST Journal, 2, 2014, 74-85.

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Replacement of fleet is replacing used motor vehicles with the new ones, and an effective
fleet replacement plan helps to save on cost, use vehicles in their most useful life14. When
replacing the fleet, consider safety as this should be the priority and therefore, to replace a
vehicle to determine whether it meets the current safety standards. This ensures the safety of
drivers, staff members, and others on the road. Another factor to consider in fleet replacement is
the need, and it is essential to determine the needs of the organization before deciding to replace
a vehicle, for example, if the organization is looking to increase fuel-efficient vehicles.
Total cost of ownership, this formula takes into account the operation cost, repair, and
maintenance cost, it generally determine the overall expense of having the vehicle beyond the
initial price, since all vehicles need maintenance and repair, when it becomes more frequent, the
total cost increases and the fleet operators should determine if it is worth keeping the vehicle or
replacement. The table below is an illustration.
Comparison of maintenance and repair expenditure against the initial cost
Year M and R $ INITIAL VALUE $ Percentage difference
0 80,000
1 1,800 61,000 9.47%
14 J, Oskarbski & D Kaszubowski, "Applying a Mesoscopic Transport Model to
Analyse the Effects of Urban Freight Regulatory Measures on Transport
Emissions—An Assessment.". in Sustainability, 10, 2018, 2515.

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2 2,700 43,000 15.0%
3 3,600 28,000 24.0%
4 4,300 17,000 39.01%
5 5,300 9,000 66.25%
From the figure above, maintenance and repair expenses increase over time. At least after five
years, the organization should be ready for the fleet to save costs.

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Part1. INTERNAL ORGANIZATION DYNAMICS
Q1. Planning and implementing a change project
A change project is a structured approach to prepare individuals and teams to move the
organization from the current state to the desired state. It may involve a change in a company's
structure, strategy, policies, procedures, technology, or culture. The change may be planned
years in advance or maybe forced on an organization because of a shift in the environment
resistance to change is a natural phenomenon, there for a chance to take place, it needs to be
appropriately structured and controlled if the benefits are to be realized. A change project
process includes, first, creation of the need to change; this helps to spark the motivation to make
a start. Identify potential threats, and create scenarios of what could happen in the future,
examine the opportunities that exploited. Initiate discussions by giving dynamics and convincing
reasons to make people find it worth talking about and also seek support from customers and
stakeholders.
Secondly, organizational change requires employee's involvement because they are the majority
in the organization hierarchy, engage employs especially by explaining the changes that affect

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the performance of their duties and their well-being in the organization and ensure they
understand the importance of the change so that they can also help creates awareness. Good
relationships and communication between employees and management make them feel part of
the process.
Thirdly, a change must have a vision, therefore, create clear a vision for change by
determining core values of the change and ensure to frequently communicate the vision within
the company, ensure to be proactive in communication to minimize obstacles or resistance.
After communicating the vision and removing obstacles, try to implement the change, this stage
requires time to ensure the impact on the process to the employees who manage the change as
well. In case the change requires employees training. The management should ensure that
employees are adequately trained and adequately equipped with the necessary skills for change
implementation. Once the implementation process is over, follow up to assess if the change is
working as was intended, in case the change has not worked as planned, make adjustments until
the desired result is achieved.
Q2. Importance of objective for corporate success and key performance factors
Cooperate objectives are goals set by top management to influence the organization’s
strategic decisions, they provide the focus for setting more detailed objectives for the main

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functional activities of the business importance of having corporate objectives includes;
attracting and retaining employees, mission-driven core values, maintaining a healthy cashflow,
gaining competitive advantage and gaining and retaining customers.
A company's mission statement describes the core values of the company; it highlights in
summary, the beliefs of the company concerning customers, the responsibility to the community
and employees. This is important to the organization in ensuring the well-being of its employees
and to the community as a whole. Companies always have short term, and long-term goals that
require financing; therefore, maintaining a healthy cash flow will prove your ability to finance
the organization projects, cash flow is also necessary for maintaining sustainable growth, which
requires careful use of company resources such as finance and personnel.
Employees are the drivers in achieving organization goals, Employee turnover costs
money in lost productivity and the costs associated with recruiting, which include employment
advertising and paying placement agencies, therefore, it is essential to the company to maintain a
productive and positive employer-employee relationship to improve relationships. Focused
cooperate objectives help the organization gain a competitive advantage over its competitors, a
comprehensive analysis of the activities of the competition should be an ongoing business
objective for the organization. Understanding where your products rank in the marketplace helps
you to determine how to improve your standing among consumers and improve your revenue.
The primary objectives of the organization are keeping customers, excellent customer
services help you gain and retain clients who, the organization analyses customers buying trends
and listens to their opinions regarding their products to anticipate the product distribution needs
of their clients and develop a business partnership that improves the organization's market share.

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Performance factors or indicators are the measures that help the organization to track their
performance over time, make a test improvement and evaluate the effectiveness of these
improvements. These factors form the basis for the proper management of a business. The
factors are not always easy to identify. First, you need to examine your business using the
available data and then determine what should be measured to achieve success. This includes
customer satisfaction, sales, human resource, and employment.
Using Sales as a performance indicator by some companies is justified because gives a
description of the company overall financial income, the organization uses sales to measure their
performance in terms of, how much revenue the company retains after paying taxes and all other
expenses, lowering the cost such as cost of maintaining staff and keeping inventory — checking
on sales from a new customer and how to capture more market to improve on sale in the market.
Determine the average number of days it takes to receive payments affects the organization's
daily expenditure and purchase of raw materials, also determine the number of online and in-
store sales. Customer satisfaction is used to indicate performance by various organizations in
many ways, such as the customers gained over a specified period, the percentage of lost
customers over a set period.
Customers lifetime value, the organization determines how best to gain and retain their
clients, carry out survey-based net promoter score to determine whether the customers would
recommend the company to others, put in place the strategy to care for customers complains.
Human resources and employment cover areas such as the total employee turnover, the number
of new hires, retirement rate. Survey employee satisfaction, determine the productivity of the
employees, and how much is lost due to absenteeism. Determine the company's average salary to

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that of the competitor or the whole industry. Set a personal target for each employee and
determine their rate of completion in a specific time frame.
Part 2. EXTERNAL ORGANIZATION DYNAMICS
Q3. Market orientation and effects of marketing mix on sales
The changing needs drive the organization's attention in the market, wants behaviours,
and expectations of customers, which they monitor closely and develop skills to produce the best
solution to the external market demands. Market orientation culture is a critical element of
company performance with innovation as the mediator to achieving better performance. Market
orientation is a business approach that is solely focused on identifying customer needs or wants
and creating products that satisfy them. The organization makes decisions based on what
customers want not what the business thinks is best for the customers, therefore the organization
tries to anticipate their future customer needs This means that companies have to emphasize the

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centrality of customers by putting them first as a means of attracting and, more importantly,
retaining customer patronage.
The marketing mix is a business model with a set of marketing tools that a company uses
to promote its brand in the market. Product, price place and promotion are the marketing
components commonly used by companies. The organization sales depend heavily on this 4 P’s
of marketing because they have bigger impact on the customer buying behavior. The product
aspect such quality and packing have impact on sales and profitability. Price is essential in
influencing sale outcome.
The place is a geographical location that a distribution channel is located or a location
where customers can have access to the company's products. The location of a distribution
channel affects sales, for an instant, channels situated in metropolitan areas have more sales.
Store location have impact on consumer buying behavior, hence sales volume. Promotional
activities conducted by the organization also influence sales performance, advertisements, e-
marketing, and direct marketing to persuade customers to buy the products therefore influencing
the sales volume.
Q4. Relationship between supply-demand and price
Demand and supply is an economic model of determining the price in the market, this
concept shows the economic relationship between the quantity of a commodity that the producer

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is willing to sell at a particular price and the quantity the consumer wishes to buy at that price 15 .
Supply is how much something you have, demand is how much of something or the amount you
want, and the price is what you pay for something you want. Therefore, the relationship between
supply and demand is only connected by the price.
The relationship of supply, demand, and price is further expressed in the supply and
demand curves which is based on the observation the lower the price of a product, the higher the
demand, the curves cross at point known as the equilibrium point, at equilibrium, the supplied
quantity is equal to that which is demanded, the price and quantity at this point is known as
equilibrium price and equilibrium quantity respectively.
Q5. Trade-offs and effectiveness of logistics in providing a competitive advantage
In business, the trade-off is a situation where the organization has decided to reduce or
lose one aspect of set design to gain the other. In logistics, companies may have extensive
inventories, this, in turn, increases the cost warehouse, more waste of the product increasing the
total cost management, in this case, the organization may have to decide to reduce the inventory
to save on cost but runs the risk of insufficient inventory to meet the demand. The decision to
reduce inventory and increase price may result in benefits or even harm the company. Deciding
on which trade-off to using does not guarantee success, therefore before deciding on trade-off,
consider the pros and cons to the company and your clients.
15 I. Tsai "Housing Supply, Demand and Price: Construction Cost, Rental Price and House
Price Indices.". in Asian Economic Journal, 26, 2012, 381-396.

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Logistics can be used as a strategic lever to gain a completive advantage by optimizing to
better performance 16 . More profit is gained and lesser costs incurred. This optimization can be
achieved through just in time or inventory holding method. Reducing the cost of goods by
focusing on the expenditure of the other components such as JIT can be beneficial to the
organization. Apart from the cost and time strategies, there is quality and flexibility, a consistent
supply of high-quality goods and services, and this requires a reliable supplier who delivers on
the promise and per the specifications. The flexibility aspect requires the supplier to be flexible
in terms of volume of delivery, variety. It can customize the supply to specific customer
requirements.
16 R. Swanson "Sustaining competitive advantage by adopting logistics and supply chain
management software: a research agenda grounded in resource advantage theory.".
in International Journal of Logistics Economics and Globalisation, 5, 2013, 81.

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Q6. Transport sustainability and legislation at local, national and in Europe as a whole
Transport sustainability refers to any means of mobility that have a low environment,
social, and climate impact. Sustainability of transport can be evaluated through components such
as vehicles, energy sources, and the infrastructure used. Environmental sustainability starts from
the individuals at the local level in terms of lifestyle and behavior to the global aspects such as
the international regulations ensure sustainable transportation 17. Sustainable transportation can
improve population health, through individual transportation choices at the local and national
level, such as using active modes instead of a car or car-sharing, activity patterns, which include
promoting social participation, neighbourhood walkability, and increased exposure to green
spaces.
International policies that promote sustainable transportation, European Union (EU)
transport policy aims to ensure the smooth, efficient, safe, and free movement of people and
goods throughout the EU utilizing integrated networks using all modes of transport (road, rail,
water, and air) 18 . EU policy also deals with issues as wide-ranging as climate change, passenger
rights, clean fuels, and cutting customs-related red tape at ports. The European Union transport
policy has developed a modern infrastructure network making mobility faster and safer hence
enhancing sustainability. More than 8% of the EU gross value in the economy is contributed by
17 K. Button & D Hensher, Handbook of transport strategy, policy and institutions. In
Amsterdam, Elsevier, 2005.
18 S. Lavenex "The external face of differentiated integration: third country participation in
EU sectoral bodies.". in Journal of European Public Policy, 22, 2015, 836-853.

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transport. The implementation of sustainable and innovative means of transport plays a
significant t role in the EU's energy and climate goals.
Part 3. BUSINESS PLAN
Q7. Business case
Quick and safe courier and Delivery Company business case include crucial information such as
the project background, the required benefits for the business, the required costs for the project,
gap analysis and the estimated risks. The quick and safe courier company was established to
outfit the commercial and domestic shipping all over the world. The couriers company is
differentiated with other mails services company by some crucial features such as tracking,
speed, security, swift delivery times, specialization, signature, express services individualization
which are usually optional for any mail services. Courier services runs in all the scale within
some specific town, cities to national, global and regional services. Quick & safe courier and

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Delivery Company offer their services all over the world by using model such as spoke and hub.
Additionally, the company utilizes the courier software which acts as electronic proof of delivery
and electronic tracking details. Also Quick & Safe Courier and Delivery Company will be
situated in Birmingham City, and it will have branches in other parts of the United Kingdom. We
will be involved in local deliveries around the city, such as the delivery of parcels, and packages
for individuals, homes, and organizations. Our goal is to become the best leading delivery
services providers in Birmingham City by ensuring we offer efficient services in the industry in
aspects of time, safety and cost.
The expected benefit of quick safe courier and Delivery Company entails the following; First is
that they are convenience, the services which the company provide will be convenience for both
the receiver and sender. The company can pick the item on the client doorstep and directly
deliver them to the receiver. Secondly is that it is quick, the company will deliver the items to
recipients in short duration of time. Third benefit is that the company is global presence in that
the company operates both locally and across the states. Fourth, is concerning the company
safety and security, the company handle the items with a lot of care using appropriate equipment
thus security of the items will be enhance.
The quick and safe courier and Delivery Company should define expected costs for the project
so that they can understand the financing of the project. First the company will established the
source of capital for the company this options will includes bootstrapping, bank and investors.
Next is that the company should consider the expenses which is required in the company , this
expenses includes toll expenses, driver skills development training costs, license, salaries for
staff and drivers on monthly basis and maintenance cost. Below is a diagram which demonstrates
how

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Q8. Business ownership, structure, and sources of finance
Quick & Safe Courier and Delivery Company is a sole proprietorship venture owned and
managed by Samuel Monel who is a graduate of Supplies and Logistics with in-depth working
experience with one of the leading logistics company in the country, my skills and experience
will drive growth and development Quick & Safe Courier and Delivery Company and be able to
compete with other companies in the industry countrywide.
The company not only intends to operate in the city but to grow and build a standard
delivery service operating in the entire country. The company intends to put structures that will
assist the growth of the business and by hiring competent and qualified personnel.
The structure will be as follows, the chief executive officer who is the owner who will be
responsible for matters such as planning, creating organization mission, vision, fixing prices
signing checks, among others. Human resource manager who will be in charge of human
resource and administrative duties such as expediting orders ensuring the functionality of
operation equipment, arranging of meetings and appointments, supervising day to day office
activities. Sales and marketing manager in charge of promoting the company by creating
awareness about the company's existence to the public, advocates for customer needs, develop
and strategize ways for increasing sales, keeps customer-related information.

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Transport manager and logistics manager with the responsibility of making sure they are
completed A safely19. In time, planning routes, developing and implementing health and safety
standards developing schedules, booking deliveries directing all transport activities, this duty
will also be handled by me since we have the experience and skills for this duty. An accountant
who handles receipts and other financial matters of the company such as financial reports,
budgets, and financial statements, financial forecasting, and risk analysis, ensuring the company
compliance with tax regulations, administering payrolls, internal auditor of the company.
Messengers who are responsible for ensuring delivery to the destination is achieved, they pack
and sort items in preparation of delivery, they also truck and providing the tracking information
to the logistics manager.
Quick & Safe Courier and Delivery Company SWOT analysis conducted by business
analysts, strengths of this business venture are that it is strategically located, its pricing policy,
payment options, and customer care services. The weakness of this company is that it is a start-
up business with less capital to fully compete with already established organizations in the
industry. Opportunities that the business is eyeing to capture is that sending of parcels and
packages is common as and the rate at which people use door to door delivery is proliferating as
per my market survey and feasibility studies. Threats, every business venture encounters threats
that alarm its operations, our major threat is the effects of economic meltdown which influences
our customers purchasing power, just like entry of Quick & Safe Courier Delivery Company is
threat to the existing firms, introduction of new delivery business in the industry is also a threat
to our existence in the industry.
19 , Delbosc "The role of well-being in transport policy." in Transport Policy, 23,
2012, 25-33.

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Setting a business requires finance, and the cost of setting a business varies depending on
the approach and the scale of your undertaking. In my case, personal saving of around $40,000 in
my bank account is my capital at hand, thanks to my family members who after listening to my
business proposal agreed and raised for me around $20,000, and the bank approved my loan
request of $15,000 to help me meet my budget approximation of $82,100. My friends also
managed to contribute $10,000 at my disposal. We will be leasing vehicles since I do not have
enough to purchase trucks in the case of large deliveries, which requires trucks or vans.

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Q9. Budget, cost and market analysis
The budget estimate is $82,100 and will be distributed as follows.
Item description
Amount
( $ )
1 Business registration fee, the legal expense of obtaining permits 1,300
2 Marketing promotion and opening expenses 1,500
3 Cost of hiring consultants 1,500
4 Cost of taking insurance covers to employees and properties 1,800
5 The amount for paying rent for at least six months 5,500
6 Cost of modeling the business premise to fit my requirements 1,000
7 Startup expenses such as stationery, phone and utility deposits 1,500
8 The cost of operating the company for the first three months, such as
salaries of workers, payment of bills among others
29,500

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9 The amount for purchasing and installation security gadgets 4,000
10 Cost of purchasing office furniture and other devices such as
photocopying and printing machines
10,000
11 The cost for purchasing and hiring or leasing of motorbikes and vehicles
for delivery
20,000
12 The amount used for opening and running our website 500
13 Cost of our opening party 1,000
14 Miscellaneous cost 3,000
Total cost 82,100
Cost analysis and monitoring
A sound financial management system will help in monitoring and tracking of how
resources are used, making sound business decisions, demonstrating accountability, and taking
remedial where needed20. Expenditure will be monitored regularly (monthly) against budget
targets and identifying changing patterns that need corrective measures21.
20 Andawei, M. M, "Project cost monitoring and control: A case of cost/time variance and
earned value analysis.". in IOSR Journal of Engineering, 4, 2014, 22-25.
21 , L. Orlowski & C Soper, "Market risk and market-implied inflation expectations.".
in International Review of Financial Analysis, 2019, 101389.

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The total cost of my business venture is roughly $82,100, which includes all the assets that the
firm wishes to purchase and another cost such as payment of employees and bills, as shown in
the budget summary. On the other hand, the financial benefits on this venture come payment of
the delivery service that we offer. I estimate our sales as $67,000 for the first fiscal year,
$105,000 for the second fiscal year, and $150,000 for the third fiscal year. The estimate is
provided assuming that there will be no economic catastrophe and natural calamity that affect the
operation of the business, by the end of the second year a profit of more than 20% of the initial
cost and at least 80% by the third year.
Market analysis
Before choosing geographical location, with the help of experts who have a
comprehensive understanding of the service delivery business in the industry, we drafted a
market strategy that will help achieve a more significant market share, this business is very
competitive, therefore in order to grow and be customers preferred delivery service provider in
the city, we will have to empower and motivate our sale and marketing team to deliver. My
marketing approach will be; directly market the business in forums social places and directly to
individuals, advertise on newspapers , local TV and radio stations, advertise on social media
forums such twitter, Facebook and blogs, encouraging our customer to refer others about
existence and how good we are and by giving discounts to our esteem customers. I also intend to
establish my business brand in the market through public advertisements such as sponsoring

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community programs, install a billboard in strategic positions in the city, and conducting
roadshows.
Delivery services have a big target market in the city and for the fact that organizations
and individuals prefer door to door deliveries because of their busy schedule make it perfect to
offer such services, having strategically located the collection centres where individuals and
businesses have ease of access22. From the market research I conducted, the idea of what the
target market expects from us is at hand. Our target customers are; cooperate organizations
online stores using e-commerce, government, schools, hotels, restaurants, real estate industry,
banks, and other financial institutions.
22 L, Eldor "How Collective Engagement Creates Competitive Advantage for Organizations:
A Business-Level Model of Shared Vision, Competitive Intensity, and Service
Performance.". in Journal of Management Studies, 2019.

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Pricing policy
Our pricing policy ranges depending on the distance, time of the day, the weight of the
package, value, and urgency23. The company will make sure that the pricing is below the average
market price to able us penetrate the market24. The business operation cost or cost of running the
business is kept at a minimum while abiding by the government pricing model. Quick & Safe
Courier and Delivery Company encourages advance payment for our services, as part of our
23 , Held & L Gerrits, "On the road to electrification – A qualitative comparative
analysis of urban e-mobility policies in 15 European cities.". in Transport Policy,
81, 2019, 12-23.
24 T, Miettinen & R Stenbacka, "Personalized pricing versus history-based pricing:
implications for a privacy policy.". in Information Economics and Policy, 33, 2015, 56-68.

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marketing strategy, we also offer discounts to our customers. On special occasions, we will be
offering free services to the organization that we have established good business partnerships
with. Because customers prefer different payment methods, our payment options are; payment
with cash, bank transfer, checks, and mobile money.
Q10 Competitive advantage
Balance of account for Quick and safety courier and Delivery Company
Cash Asset $ 66,800
Accounts Receivable Asset $ 5,000
Supplies Asset $ 500
Prepaid rent Asset $ 1,800
Equipment Asset $ 5,500
Truck Asset $ 8,500
Accounts Payable Liability $ 200
Common Stock Equity $ 30,000
Retained Earnings Equity $ 0
Service Revenue Revenue $ 60,000
Salary Expense Expense $ 900
Utilities Expense Expense $ 1,200
Quick& safe courier and delivery company.
Income Statement
Month Ended January 31, 2019

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Revenue:
Service Revenue $ 60,000
Total Revenues $ 60,000
Expenses:
Salary Expense 900
Utility Expense 1, 200
Total Expenses 2,100
Net Income ($60,000 – 2,100) $ 57,900
Quick and safe courier and delivery company.
Balance Sheet
January 31, 2019
Assets Liabilities and Equity
Cash $ 66,800 Accounts Payable 200
Accounts Receivable 5,000 Total Liabilities 200
Supplies 500
Prepaid Rent 1,800 Common Stock 30,000
Equipment 5,500 Retained Earnings 57,900
Truck 8,500 Total Equity 87,900
Total Assets $ 88,100 Total Liabilities + Equity $ 88,100
There is an intense competition in this industry this makes business venture very easy to
start and does not require much finance since it can be started on a small scale in a particular area
25. No matter the number of service delivery firms operating in the market, business prosperity
25 K, Huang R Dyerson, L Wu, & G Harindranath, "From Temporary Competitive Advantage
to Sustainable Competitive Advantage.". in British Journal of Management, 26, 2015, 617-

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depends on how well it succeeds the services offered by others in the same market. Big
companies that have already established in the market are not quite easy to compete with,
looking at the competitor's financial structure public published in the newspaper, our financial,
competitive advantage comes from the following areas; first, low pricing, from the financial
report from our competitor, their pricing is a bit higher than ours, based on the market survey we
conducted, low price is one of the attributes that the market demands and that is our policy.
Secondly, our operation cost is more as compared to our competitors, and this makes it
easy for our company to maximize profit. Lastly, the salaries and compensation of our
employees are a bit higher than our competitors, and this motivates the company's workforce to
deliver quality services to customers. Quick & Safe Courier and Delivery Company is
introducing exemplary delivery services intending to become a delivery company of choice to
the people of Birmingham city.
636.

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