Planning a New Business Venture Assignment Solution
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Added on 2021-07-13
Planning a New Business Venture Assignment Solution
Added on 2021-07-13
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Task 1Analyze how market conditions can affect the market potential for a new business When a new company is trying to establish itself in the market, it may encounter several difficult hurdlesthat it must overcome. As a result, analyzing these barriers before beginning operations is a critical step that every new company endeavour should do to increase its chances of success. Therefore, a PEST study is one of the first procedures that a company would evaluate the external environment of market circumstances that may affect the business. PEST is an acronym for Political, Economic, Social, and Technical aspects, which we shall explore more below. (Frue, 2020)Political factors: These factors revolve around how and to what extent the government intervenes in the economy or a specific industry. Essentially, all of the government's influences on a business will classify under this heading. Government policy, political stability or instability, corruption, foreign trade policy, tax policy, labour law, environmental law, and trade restrictions are examples. Furthermore, the government can significantly influence a country's education system, infrastructure, and health regulations. All of these factors take to account when determining the attractiveness of a potential market. (Frue, 2020)Economic factors relate to how the government balances taxes, interest, and inflation rates and lowers the unemployment rate. As a result, any changes in these variables will affect a company. For example, ifa bank raises taxes or interest rates, the firm's debt will rise; this also implies less disposable money in the public, causing business sales to fall. Investors will deter from investing during a period of high interest, which a new company endeavour must consider since an investor may be necessary for them to get started. (Frue, 2020)Social factors include market size, population, age, market demand, and desire to purchase, all of which will impact a new company's endeavour. First, a company must analyze how crowded the market is. If it is saturated, it must offer fresh ideas that will enable it to stand out among the other established organizations. When it comes to businesses entering a developing market, it is best to design a product or service that appears to be in demand to enable a new company to sell to a wide range of individuals. (Frue, 2020)Technical factors: Because of recent technological advances, companies have been able to advertise to amuch more significant percentage of prospective consumers, enabling them to create a brand image via
logos, websites, and customer evaluations. Technology has also made it much simpler for companies to analyze competition by comparing marketing tactics, pricing, and goods with the press of a button. A new company should undoubtedly think about utilizing technology to aid them before starting operations, such as stock control technology, e-commerce, and data collection analysis, which will help the firm manage itself and stay ahead of its competitors. (Frue, 2020)Explain how to identify a market need and target markets for a new business venture New business ventures must analyze which markets are saturated and unsaturated to determine what products and services they can offer the public to differentiate themselves from the competition. One method for doing so is to use PEST, which analyses the environmental factors that could impact the business positively and negatively. GAP analysis may also evaluate how the actual business performancecompares to the anticipated business performance. A company can utilize this study on competition to identify the gaps in the market and use this to their advantage to fulfil market requirements. When a company determines the market needs, it must begin the research and development of a new product. This development must analyze what the public wants the product to look like and its use. The company will consider the product dimensions, the product's longevity, the purpose, and the target market. During the product development process, a company may do product research to know better how to customize the product for the public regarding price, market (national or worldwide), and how it should deliver to consumers. In general, the goods produced by a new company aims at the domestic market. However, if the business can grow and create product demand, it may enter the international market. Another issue a company must ask is whether the product should be new and unique to the market or expand on and improve current goods. Designing and selling a brand-new product is riskier than the latter, but the potential for success and expansion is limitless if the product is a hit since competition willnot be there for some time. Targeting the right market must also be assessed by the business; for example, properly targeting a new games console at older adults would not equate to many sales. The company must also analyze how they will target their product; for example, targeting a games console to teens and young adults would be the best. To market this product, the use of social media could be beneficial. Age, gender, occupation, beliefs, and interests are few socioeconomic factors that businesses must consider before marketing their product. Finally, targeting the product geographically must be determined to have the most significant possibility of success. GAP analysis is another technique used by
companies to identify performance gaps between the optimum allocation and integration of inputs (resources) and the present allocation level. This study will then highlight the areas in which the company can improve. Undertaking this type of analysis, on the other hand, necessitates documenting and improving the gap between business requirements and current capabilities so that the business can improve on the areas that are achievable in the short run and other opportunities that may be achievable in the long run. An example of this GAP analysis is a company that aims to provide the highest levels of customer satisfaction in its industry compared to other competitors. Still, through the GAP analysis, we find that customer service agents report high customer frustration levels during their calls. Using GAP analysis, you can create a customer journey map and determine what causes customer frustration by gathering quantitative data. This will determine the business's gap in satisfying the customer, whether it is the product itself or the customer service the business provides customers whenthey make inquiries. With the GAP analysis, the company may adopt various methods to combat these negative discoveries, providing the company with a greater chance of reaching its goals and objectives. Therefore, the market circumstances for the company will improve. (Lucidchart, 2019)Assess potential barriers, limitations and risks for this business venture.Various factors are to consider when starting a company endeavour, such as the Premium Contractors organization. Firstly, Premium Contractors is in a partnership. Both partners may fund starting expenses and participate in decision-making, thereby better controlling the company and achieving business goals. Consequently, the risk factor for both people reduces by half, and if the company fails, neither person has to bear the entire failure cost on their own. However, there is an unlimited liability with a partnership, which implies any debts and obligations incurred by the firm must pay using the partners' assets. A higher chance of insolvency for investors puts the new company’s endeavour in great danger. A partnership may also result in slower decision-making because partners may disagree on different topics. When partners fight, the working environment becomes worse and prospects of success collapse. Since the company is commercial, risks may mitigate by using its personnel and owner's skills. Nevertheless, as a new endeavour, the company will have trouble attracting talented and experienced workers due to the lack of competitive compensation and employee perks. Premium Contractor's rivals are well established and already have a brand image that employees want to be part of. Due to the company model not having shareholder financing, there will be fewer options for expansion for the
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