Management Practices and Challenges in a New Business: A Case Study of Blue Velvet

This report discusses the management practices, challenges, and potential risks faced by a new business, Blue Velvet, which offers natural flavored and low sugar smoothies, juices, and milkshakes. It covers the introduction to the business, its size and product features, capital sources, challenges and difficulties, potential risks, management practices, and recommendations. The report also emphasizes the importance of staying updated with technology, complying with laws and regulations, and maintaining sustainability.

Report
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Table of Content
Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Introduction to business, size of business and product features..................................................3
Capital sources for business and the way they are acquired........................................................3
Challenges and difficulties which might be expected.................................................................4
Potential risks included in the process of business......................................................................6
Management practices executed to eliminate issues that might face by business in future........6
Recommendation.........................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
Management practices are defined as the innovations and working methods which managers
use to make the company more efficient. Is order to run business operations effectively in the
market, there are many aspects that need to be considered by the management of company so as
to ensure its success in market. This report is based on Blue Velvet which is a newly established
organisation of Australia which offers natural flavoured and low sugar smoothies, juices and
milk shakes to customers. This report covers introduction to business, its size and product
features along with sources of capital that business can use. It also covers the challenges and
difficulties and the potential risk that business may face. Apart from this, the management
practices implemented to eliminate issues and the recommendations are provided for the
company in this report.
MAIN BODY
Introduction to business, size of business and product features
This report is based on Blue Velvet company which deal with different varieties of
smoothies, milk shakes and juices as the major emphasise is to satisfy the needs and wants of
customers. By looking an awareness of customers towards their health conscious, the manager
makes an effective plan to introduce natural flavoured products, and use of low sugar with
natural ingredients which depict purity and build the trust of buyers in a proper manner (Ibrahim
and et.al., 2019). The senior authority makes an effective planning of using fruit pulp and use of
natural flavours so as to win the hearts of customers. For this, the manager tends to formulate an
appropriate strategy by deciding the proper course of action so that they could gain a competitive
edge within the confines of food and beverage industry.
Additionally, the manager of Blue Velvet aims to ensure quality specification while
rendering fast and effective services among their customers so that they could be retained for a
longer time period. The senior authority of concerned firm could provide offerings at a
reasonable price so as to gain giant access of clients and would conduct experiment in food
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which boost the greater sales and maximise the revenue. This provide a way and advantage to the
firm to achieve a strong rivalry edge and thus improves the overall business performance as well
as productivity. It is necessary that while starting the business venture, financial planning is vital
and optimizing them judiciously would enhance a bright future aspect of a company in case of
food and beverage sector (Carfora and Scandurra, 2019).
Capital sources for business and the way they are acquired
The manager of Blue Velvet has several alternatives to obtain the funds such as bank loan,
venture capital, crowdfunding and so on. These are elaborated below:
Bank loan: This is most appropriate source of funds in which the manager would take loan
from the bank by paying particular rate of interest for a particular period of time till it is repaid.
Merits Demerits
It is most convenient source and safe and
secure mode of obtaining funds.
It is a cumbersome procedure which require a
lot of formalities and time consuming
procedure.
Venture capital: In this, the manager would discuss the idea of business to venture
capitalist and if it is satisfied with the idea then it provides them with funds according to
requirements. This is most emerging and popular source of obtaining finance.
Merits Demerits
The venture capitalist would provide expertise
ideas and other relevant information related to
business which provide growth prospects in
future.
Lack of secrecy is maintained as the
information is shared to them.
Crowdfunding: This mode of finance involves the method of raising funds from different
group of individuals as it maintains a networking of people through the use of social media
platforms (Chodkowska-Miszczuk and et.al., 2016).
Merits Demerits
As there is need to provide security and it is
considered as debt free method to obtain funds.
It is difficult procedure which require a lot of
planning and efforts. Also, there is huge
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possibility of fraud in case of crowdfunding.
Challenges and difficulties which might be expected
In today's competitive business environment, there are several challenges or difficulties
that might be expected for business. These challenges or difficulties may hamper the operations
and activities of business in future. So, a new business like Blue Velvet required to properly
analyses the macro environment of Australian market as this will help in assessing all the
possible challenges that firm might face while performing its business operations. The macro
environment of beverage industry of Australian market can be analyzed through using PESTLE
analysis tool. It consists of 6 factors including political, environmental, social, legal,
technological and economic factors. Description of these factors and the challenges pose by them
to business are discussed below:
Political factor: it involves regulations, taxation, political stability of country, product
labelling etc. Australia is a politically stable country which provides an opportunity to Blue
Velvet to run its business operations smoothly. However, any alterations in established laws and
policies may create challenge for the organisation as it will impact on business in an adverse
way. It will also require company change its practices as per the laws which ultimately influence
the activities of business. Apart from this, the regulations related to food and beverages and the
quality standards also impact on the business activities. Changes in law directly influence the
revenue and profits of company and creates a challenge for it.
Economic factor: it involves interest rates, tax rates, import and export, inflation rate,
deflation etc. This factor also has direct impact operations of Blue Velvet. Due to recent global
financial crisis, the profits of almost all the organizations reduced significantly. This may create
a challenge in front of company in attaining high sales. Apart from this, the increasing cost of
raw materials also impacts on the business. In order to overcome these difficulties, organisation
needs to execute appropriate strategies for cost cutting and emphasize more on adopting such
ways that leads a business towards growth.
Social factor: this factor is associated with the needs and preferences of consumers. Now a
day, people switch from flavored drinks to natural and healthy drinks. Blue Velvet emphasize on
providing natural flavored products with low sugar which will provide an opportunity to the
company in Australian market. This helps in attracting more number of customers and generating
higher revenues. However, it is very necessary for the company to constantly analyze the needs
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and preferences of consumers and offer them products accordingly. Non response to the needs of
consumers may create difficulties for the company in performing operations in Australian
market. So, the management of Blue Velvet needs to ensure that the preferences of consumers
are online regularly and offer them with products that satisfy their needs.
Technological factor: it is very significant factor for the business as the production and
packaging of product heavily depend on technology. Advancement in technology may create
challenges for company in future. In order to stay profitable in the market, it is very necessary
for the Blue Velvet to invest in technology on continuous basis. However, use of effective
technology will provide an opportunity to the company to bring constant innovation in its
products and services and attain high revenues in the market by attracting more number of
customers.
Environmental factor: due to increasing environmental concerns, people are more
concerned towards it. Following all the environmental laws and regulations helps Blue Velvet in
developing good brand image in the market. This will also help the business entity in running its
operations effectively in the Australian market and generating high profits. However, if company
will not follow the environmental laws, then it will create difficulties for the company as it
requires to face criticism from the society due to noncompliance with environmental laws. So,
following all the environmental laws is very necessary for the organisation and it must
emphasize on running its business operations sustainably in the Australian market.
Legal factor: compliance with laws and regulations made by government is very necessary
to operate the business operations smoothly in the market. From environmental laws and product
quality to labor laws, it is very necessary for Blue Velvet to compliance with all the laws as non-
compliance may cost high penalties on company and restrict it to run its operations successfully
in the market. It creates a lot of difficulties to the business and may hamper its market image in
future that ultimately influence the profitability and revenues of company.
Potential risks included in the process of business
There are some potential risks which are involved in business venture needs to be
considered by management to ensure effective running of business operations. Financial risk is
one of the major potential risk that business may face. It involves debt load of company. The
fluctuations in interest rate can also create a risk for Blue Velvet. The another potential risk that
business may face includes economic risk. The business environment is dynamic and as the
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market fluctuate, the economy is also fluctuating. Positive changes lead to increase the purchase
environment and is good for economy. However, negative changes or events impacts adversely
on sales of company and creates a risk for it. Apart from this, technology risk is the another risk
that business face. Constant advancement in technology create a risk for business environment as
if it is not updated with the technologies, then it may impact adversely on the business operations
of Blue Velvet which ultimately harms its productivity.
Management practices executed to eliminate issues that might face by business in future
In order to eliminate the issue that business might face in future, there are some
management practices which are executed by Blue Velvet. The company keep updated itself with
new technologies which help it in providing customers with high quality juices and shakes. Apart
from this, our company also watch the trends and changes to potentially determine and plan for
downturn in economy. In order to counteract the economic risk and maintain steady cash flow,
the company save money as much as possible. In addition to this, for meeting the financial risk,
the company made adjustment in its business plan which help it in avoid the harming cash flow.
All these management practices help the organisation in eliminating the issues which it might
have in future.
Recommendation
As per the above discussion, it is recommended to the company that it must keep updated
with new technologies and make use of it in business so as to bring innovative products and
services in the market and attract large group of customers. Apart from this, Blue Velvet should
ensure that it must compliance with all the laws and regulations of Australia as this will help
company in running its business operations effectively in the market and generate huge profits.
Moreover, the company must adopt such practices and policies which do not harm the
environment in any way. This help company in maintaining its sustainability for long-term in the
market.
CONCLUSION
As per the above mentioned report, it has been concluded that new business needs to
consider many aspects when running a business in the market. The sources like bank loan, crowd
funding and venture capital can be utilised by business to acquire funds. There are some factors
like political, social and environmental, technology etc. that creates various challenges and
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opportunities for the company. There is some potential risk like financial risk, economic risk,
technological risks etc. which might face by company. For minimising these risks, several
practices can be implemented by management which help in eliminating those risk in future.
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REFERENCES
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