Innovation and Management

The aim of this report is to discuss about the potentiality of gaining business competitiveness in the current business scenario. In doing so, this report introduced a new concept of portable dynamo for domestic usages. This will help in regenerate electricity from the motion force wastes as of now. The concept will be designed for the domestic usages and it will be first targeted for gym, where motion force gets generated from cycling activities. The different business elements of this concept are discussed in this report including operational, marketing and financial plan. However, on the other hand, a few challenges and risks are also identified that can pose barriers in the long term business. Recommended steps are also discussed to mitigate these challenges and risks.

Running head: INNOVATION AND MANAGEMENT
Innovation and management
Name of the student
Name of the university
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1INNOVATION AND MANAGEMENT
Executive summary
The aim of this report is to discuss about the potentiality of gaining business competitiveness in
the current business scenario. In doing so, this report introduced a new concept of portable
dynamo for domestic usages. This will help in regenerate electricity from the motion force
wastes as of now. The concept will be designed for the domestic usages and it will be first
targeted for gym, where motion force gets generated from cycling activities. The different
business elements of this concept are discussed in this report including operational, marketing
and financial plan. However, on the other hand, a few challenges and risks are also identified that
can pose barriers in the long term business. Recommended steps are also discussed to mitigate
these challenges and risks.

2INNOVATION AND MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
Venture description..........................................................................................................................3
Management analysis.......................................................................................................................5
Legal structure.............................................................................................................................5
Operational planning...................................................................................................................6
Marketing plan.................................................................................................................................7
Identification of target market.....................................................................................................7
Communication strategy..............................................................................................................7
Competitor’s analysis......................................................................................................................8
Financial analysis...........................................................................................................................10
Identification of key risks and challenges.....................................................................................12
Reference.......................................................................................................................................13

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Introduction
Gaining sustainability is important in the current time due to the reason of increasing
pollution and environmental impacts. Majority of the unsustainable practices are being followed
in the daily activities and thus sustainability should be gained from the daily activities only. In
this case, it is important to develop new technologies and propositions, which will help to gain
the sustainability (Liu 2013). In the recent time, energy sources are the key streams of pollutions
as well as unsustainable practices and thus the change should be initiated from the energy
sources.
This report will discuss about the new technology being developed for initiating
sustainable generation of electricity and it is recommended that dynamo will be effective. Thus,
the objective of this report is to discuss about the viability of the recommended concept along
with the different elements required for successful development process. This will include
management plan, legal plan, marketing plan and competitor analysis. In addition, the financial
analysis will also be done to ensure the funding process for the new venture. There will be
certain risks and challenges to be faced, which will also be discussed and evaluated. Thus, the
long term viability for developing the recommended technology will be discussed.
Venture description
The success of the technologies developed in the current time is heavily dependent on the
level of sustainability. This is due to the reason that current state of affairs is more environmental
aware and sensitive. Thus, the value propositions should meet the cost effectiveness and
environmental standards in the market. Generation of the electricity is one of most challenging
aspects in the current time in terms of meeting sustainable standards (Tom Jose, Boban and Sijo

4INNOVATION AND MANAGEMENT
2013). This is due to the reason that according to the current data, more than 58 percent of the
global electric generation is from the non renewable sources, which is one of the major reasons
behind the huge pollution and exploitation of the natural resources. In this case, it is important to
replace with more renewable source of energy. However, the availability of the renewable
sources of electricity is limited and local generation is not convenient enough. In this case, the
solution should be more convenient for the users and can be beneficial in generating electricity at
the local level without having implications on environment and natural resources (Alstone,
Gershenson and Kammen 2015).
It is recommended that dynamo can be an effective choice for meeting all these
expectations and requirements. Dynamo is basically an AC generator that includes a rotary
converter. Thus, the external force of motion can be converted in to electricity at any point of
time. Moreover, this device can be installed in any small scale operations as well such as gym
centers where the motion force is available. For instance, the force of motion generated from the
cycling activities in gyms can be converted in electricity through dynamo. Thus, apart from
offering a renewable source of energy, dynamo can also help in recycling of the force that is
currently getting wasted (Sahut and Peris-Ortiz 2014). It can also be concluded that dynamo can
also be cost beneficial for the business entities due to the reason that no extra cost will be
involved in the generation of electricity. In terms of the marketing of this new product, it is to be
noted that the name of the new company will also be DYNAMO, which will offer dynamo for
potable and domestic usages across different areas.

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Figure: 1
Concept of the Dynamo in gym equipment
Management analysis
Legal structure
Management analysis will be done to have the understanding about the internal structure
to be followed by entity, which will introduce the Dynamo for portable usages in the market. The
first element in the management analysis will be determination of legal structure as Dynamo is
going to be a completely new entity. It is recommended that Dynamo will be structured as a
private limited company. This is due to the reason that private limited companies are governed
under the company act that further helps in tax benefits (Hiebl 2015). Dynamo will start as
startup and they will gain the tax incentives due to offering sustainable products. In addition, it
should also be noted that private limited companies are being considered as a separate legal
entity apart from the owners. Hence, the owners will have lower sets of risks in terms of
liabilities to the business stakeholders. Dynamo is a new entity and in the coming years, they are
willing to take their business to the global market. In this case, the private organizational

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structure can be changed n to public structure. The following table will state about the difference
in different legal structure, which will further prove the choice of private legal entity of Dynamo.
Business structure Private
limited
Public
limited
Sole
proprietorship
Separate legal entity Yes Yes No
Tax benefits Yes Yes No
External capital sources Moderate Yes No
Flexibility Yes Yes No
Table 1: Differences between different legal structures
From the above table, it is identified that both public and private sectors are having
similar sets of advantages. In addition, public structure is having the access to higher sets of
external funding. However, in the case of Dynamo, the legal structure is based on the lower risks
for which, the private structure is effective. The legal structure for Dynamo is selected on the
basis of lower risks, tax benefits and separate legal entity.
Operational planning
It is identified that flat and horizontal organizational structure should be followed by
Dynamo. This is due to the reason that with the help of the flat and horizontal structure, the
connection between the top level managers and the lower level employees will be more due to
the absence of any intermediaries. In addition, they will follow bottom up approach to have the
higher sets of market centricity in the business (Janićijević 2013). In terms of the market entry

7INNOVATION AND MANAGEMENT
strategy, Dynamo will follow Greenfield investment because potentiality of sustainable products
is high and having own manufacturing facilities will help in cost effectiveness.
Marketing plan
Identification of target market
In terms of the demographic segments, age groups between 30 and 50 will be targeted.
This is due to the reason that Dynamo as a value is not targeted towards the younger generation
rather the business people will be targeted. Thus, the intended age groups are having the
maximum portion of business people. In terms of the geographical segmentation, tier I cities in
Australia will be initially targeted because entities from the metro cities will have the higher
affordability for the initial cost required in installation of Dynamo (Aghdaie and Alimardani
2015). In terms of the behavioral segmentation, customers with higher inclination towards the
sustainable solutions will be targeted as they will more oriented towards investing more in the
initial stage, for gaining long term sustainability. Early adopters will also be targeted because
Dynamo will be an innovative product and first of the kind in the market. Early adopters will be
more acceptable for the innovative products such as Dynamo.
Communication strategy
Communication strategy is also important to get determined because it will affect the
market reach of Dynamo in the target sector. It is identified that business media such as news
channel and business magazines will be the best options in terms of traditional media for
communicating with the target customers (Felix, Rauschnabel and Hinsch 2017). This is due to
the reason that customers with having their own business can be reached through these mediums.
In addition, social media marketing can also be effective for Dynamo in reaching to larger

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section. With the help of the social media, huge population can be targeted and their feedback
can also be gathered. There are number of elements that should be changed on the basis of the
feedback of the customers and this feedback can be gathered from the social media platforms
(Ashley and Tuten 2015). It is reported that 9 out of 10 people in Australia are having social
media account, which denotes the higher market penetration of social media. Hence, with the
help of social media marketing, the market reach of Dynamo will get increased.
Figure: 2
Social media scenario in Australia
Source: (wearesocial.com 2019)
Competitor’s analysis
In order to identify the current market, where Dynamo is going to operate, Porter five
forces analysis will be done.
Bargaining power of  Bargaining power is low due to lack of same products in

9INNOVATION AND MANAGEMENT
buyers the market
 Price sensitivity will determine the bargaining power of the
buyers
Bargaining power of
suppliers
 Bargaining power of the suppliers is moderate
 There are number of component suppliers located for
Dynamo
 Forward integration option for the suppliers is low
Threat of new entrants  Threat of new entrant is high
 Moderate investment is required for starting the business
 However, the early mover advantage can help in Dynamo
in gaining competitiveness
Threat of substitutes  Threat of substitutes is high
 There are high potentiality of new offerings with same
propositions
 Core propositions will be same
Competitive rivalry  Competitive rivalry as of now is low
 Differentiation strategy can help Dynamo in fending off the
competitive rivalry
Thus it can be concluded that as of now, Dynamo is facing low sets of competition as of
now due to their innovative product offerings. However, in the later stage, the competition will
get increased and Dynamo should come up with differentiated approach in order to stay ahead in

10INNOVATION AND MANAGEMENT
the competition. It is recommended that differences should be initiated in terms of input
technologies due to the reason that improvement of the technologies will increase the efficiency
of Dynamo and lowering of cost for the customers.
Financial analysis
It is identified that initial capital requirement for Dynamo will be approx US$ 300,000
and this will include setting up the manufacturing unit and marketing activities. There are
different funding options available for Dynamo. The choice will be made on the basis of low
risks, seamless flow of fund and lower sets of terms and conditions. It is recommended that in
the initial stage, internal funding sources will be leveraged such as from the promoters. However,
the entire capital requirements cannot be done from the internal sources, which will be managed
by the angel investments (Drover et al. 2017). It should be noted that angel investments can be
attracted only when the project will be viable enough. Hence, with the internal funding, initial
project will be started and based on that, angel investment will be attracted.
The major advantages that will be gained from the angel investment are the lower sets of
risks because angel investment is made considering the business risks and probable loss. Thus,
the promoters of Dynamo will not face the challenge of repaying in case of loss. In addition,
angel investment from the leading groups such as Softbank of Japan can help Dynamo in getting
the access to huge funding sources (Harrison, Mason and Smith 2015).
The manufacturing unit will be based entirely on the angel investment and marketing will
be done by internal funding. The calculation will as follows:

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Budget for internal sources
Source: Created by author
Cost of setting up plant: $150,000
Resource cost: $100,000
Contingency fund: $50,000
Particulars
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Salaries 15000 28000 41000 54000 67000 80000
Accommodation 13000 13000 13000 13000 13000 13000
Staff salaries 11000 12000 13000 14000 15000 16000
Medical equipments 9000 10000 11000 12000 13000 14000
Travel 7000 8000 9000 10000 11000 12000
Office Equipments 1000 2000 3000 4000 5000 6000
Training and Education 25000 28000 31000 34000 37000 40000
Volunteer Costs 20000 22000 22000 26000 28000 30000
Traditional media
promotion 16000 18000 21000 24000 25000 28000
Website and Social Media 10000 12000 14000 16000 18000 20000
Refreshment 5000 8000 11000 14000 17000 20000
Telephone Costs 1500 2000 2500 3000 3500 4000
Contingency Costs 800 1200 1600 2000 2400 2800
Total 134300 164200 193100 226000 254900 285800

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lenges in terms of persuading customers for high initial installation costEasy payment options and schemes for the customers such as EMI option
Risks of technological inferiority due to upgraded competitionContinuous process of market centricity and technological development to offer the latest innovation
e for the customers from different segments where motion force cannot be generatedDeveloping newer technology for customers from other segments
Risks of market saturation in Australia Initiation of market development activities for higher presence across glob
Identification of key risks and challenges
There will a few challenges and risks also to be faced by Dynamo in their new business
operations. The following charts will discuss about these major issues and their solutions.

13INNOVATION AND MANAGEMENT
Reference
Aghdaie, M.H. and Alimardani, M., 2015. Target market selection based on market segment
evaluation: a multiple attribute decision making approach. International Journal of Operational
Research, 24(3), pp.262-278.
Alstone, P., Gershenson, D. and Kammen, D.M., 2015. Decentralized energy systems for clean
electricity access. Nature Climate Change, 5(4), p.305.
Ashley, C. and Tuten, T., 2015. Creative strategies in social media marketing: An exploratory
study of branded social content and consumer engagement. Psychology & Marketing, 32(1),
pp.15-27.
Drover, W., Busenitz, L., Matusik, S., Townsend, D., Anglin, A. and Dushnitsky, G., 2017. A
review and road map of entrepreneurial equity financing research: venture capital, corporate
venture capital, angel investment, crowdfunding, and accelerators. Journal of
Management, 43(6), pp.1820-1853.
Felix, R., Rauschnabel, P.A. and Hinsch, C., 2017. Elements of strategic social media marketing:
A holistic framework. Journal of Business Research, 70, pp.118-126.
Harrison, R.T., Mason, C. and Smith, D., 2015. Heuristics, learning and the business angel
investment decision-making process. Entrepreneurship & Regional Development, 27(9-10),
pp.527-554.
Hiebl, M.R., 2015. Agency and stewardship attitudes of chief financial officers in private
companies. Qualitative Research in Financial Markets, 7(1), pp.4-23.

14INNOVATION AND MANAGEMENT
Janićijević, N., 2013. The mutual impact of organizational culture and structure. Ekonomski
Anali/Economic Annals, 58(198).
Liu, Y., 2013. Sustainable competitive advantage in turbulent business
environments. International Journal of Production Research, 51(10), pp.2821-2841.
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Business Economics, 42(4), pp.663-668.
Tom Jose, V., Boban, B. and Sijo, M.T., 2013. Electricity generation from footsteps; a
regenerative energy resource. International Journal of Scientific and Research
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wearesocial.com (2019). Digital 2019: Australia social media usage is growing - We Are Social
Australia. [online] We Are Social Australia. Available at:
https://wearesocial.com/au/blog/2019/02/digital-report-australia [Accessed 18 Sep. 2019].