Strategic IT Management: Business Plan, Business Model, and Value Proposition

Running Head: STRATEGIC IT MANAGEMENT
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Strategic IT
Management
(Student Name)

STRATEGIC IT MANAGEMENT 1
Table of Contents
Business Plan.............................................................................................................................2
Business Model..........................................................................................................................3
Value Proposition.......................................................................................................................7
Market Analysis.........................................................................................................................8
Compliance and Regulatory Issues......................................................................................11
Investing Money.......................................................................................................................13
Importance of cost benefits analysis:...................................................................................13
Sensitivity Analysis..............................................................................................................14
Financial model....................................................................................................................15
Conclusion................................................................................................................................16
References................................................................................................................................18

STRATEGIC IT MANAGEMENT 2
Business Plan
Business Plan is the first and basic plan towards big and successful business. The plan
includes a wide variety of things starting from framing policies to the successful
implementation of those policies. It includes the wide variety of goods and services which a
business can offer, the place of such offering, the competition in the existing market, demand
such products (Ripsas, Schaper and Tröger, 2018).
The correct business plans help you to organize the business and ultimately lead to saving in
cost and time.
Elements of Business Plan
1. Business Identification – The first and basic element of the business plan is the
identification of the business. The key elements it includes is the identification of
business activity, the name of the business, the place of business, the model on which
the business is based.
2. Competition Study – The second element deals with the identification of competition
which the business deals with. The business should be aware of the existing threat as
well as the new threats.
3. Need and Source of Funds: Every business needs funds to grow. Businesses can
only survive if there’s adequate funding with the company. Funds are generally
needed for working capital requirements, expansion of the business.
Functions of Business Plan
1. The main and core function is to make a strategy for the future to achieve the goals.
2. The correct business plan helps the company attract potential investors.
3. The consumers are attracted by the business only if the structure of the business is
stable.
4. It also helps the business in attracting quality employees (Laud, Betts and Basu,
2015).
Using the Business Plan

STRATEGIC IT MANAGEMENT 3
The business plan is used by the company in its business. The company shall design in such a
way so as they can implement the plan. The plan is used in bits and pieces. Any company
post making a good business plan shall formulate a policy as to how they shall be using the
plan in the future before launching its product in the market. The initial step includes
familiarising with the market. Then the company starts doing the marketing of its product
before the actual launch. In this manner, the plan is used by the company.
Who writes the Business Plan?
Generally, the business plan is made by the entrepreneur who would want to start its
business. All business starts with the thinking of providing a solution to some issue in the
market. Then those points are jotted down by the entrepreneur. This is what is called a
business plan.
Who would read the Business Plan?
The business plan is generally read by the following:
1. Potential Investor: A potential investor is a person who is seeing a potential
opportunity to invest in such a business which would possibly when hits the market
can give them huge returns. These types of investors always look for such an
opportunity to invest in young start-ups.
2. Consumers: Consumers also look for new business companies coming into the
market. The new company always provides deep discounts to the new consumers
which makes them happy.
3. Lenders: Lenders also keep track of such business opportunities. This young
business always looks for potential finance to run their day to day business and
ultimately to expand the reach of business (Gardner, 2015).
The expectation of Business Plan
1. Growth: A potential investor will always like to see how the entrepreneur has
projected the growth of the company. How the entrepreneur sees the economy and
future of the company.

STRATEGIC IT MANAGEMENT 4
2. Dynamics: The second major point is how dynamic the structure of a business is. As
the business keeps on changing in the current dynamic environment. It is important to
see how business can sail across such changing dynamics of the market.
3. How feasible the plan is? – Another point is how feasible the plan is. Can the
company encourage the investor to invest in its business by mere reading of the plan?
One of the international giant Amazons is selected for the analysis of the case study. Amazon
runs its own online stores. It is a US-based multinational e-commerce company. It is one of
the largest online retailers. The company was founded in the year 1994 by Jeff Bezos. It is
known for providing all sorts of grocery, electronics items, clothing, and footwear all under
one shop. The consumer also prefers to buys from such online stores only as they get
everything in one place. The major chunk of their revenue comes from the sales at their
stores. They provide the best quality items at a cheaper rate than the other retailers. As they
are run by the giant, therefore they have stores across the world.
They purchase products from the manufacturers at the wholesale price possible in bulk
quantity which allows them to sell at a cheaper rate than the market. Also, they employed
lakhs of people which creates employment. The investors are generally keen to invest in such
kind of businesses as generally the chances of losses are very minimal (Chofreh et al., 2016).
Amazon has adopted an effective business plan to grow in a competitive market. Amazon has
to assess the current strategies to preserve its presentation leadership situation, for example,
the company develops its consistent as well as consumer service effectiveness through
technologies and improvement of invention. The company has adopted an Operation business
plan to run the business more smoothly. It consists of the elements that are related to the
operation of the company that outlines the responsibility of the employee to a certain extent
(Ferreira, 2016).
Business Model
The business model in general terms means that how the organization creates, delivers and
capture value in the market. The market includes social, economic and cultural market. A
designing business model is a very important factor in running a business successfully.
Therefore the whole process of designing is known as Business Model Innovation and it is an
integral part of Business Strategy (Massa, Tucci and Afuah, 2017).

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A business model is used to represent the company in the market. The business can showcase
its strategies, its policies, its future plan to the customers and investors which include target
customers, business processes, business strategies, trading practices, etc (Bocken et al.,
2016).
It is necessary to make the customer believe that the product of the company is of very good
quality and very durable, it can be explained only with the help of a robust business model.
Though most of the business models are created accidentally as a result of by-product.
In general sense, there are three parts of the business model:
1. The first part relates to the manufacturing and production of the product;
2. The second part deals with the identification of desired consumers for the product and
desired location where the company shall launch its product, from finding the right
consumers and the distribution to them;
3. The third and most important aspect is how the consumers will pay to the company
and how the company will make the money from selling its product and services
(Linder and Williander, 2017).
There are multiple types of business model available in the markets which are mentioned
herein:
A. Manufacturing: Under this type of business model the company manufacture or
produces the good itself. These types of companies procure raw material from
different-different sources and prepare finished goods from it. Generally, they have 2
options of selling their product either directly to the retailer or to a wholesaler at a
specified price which is decided between two parties. Sometimes an intermediary is
also involved between the two to make the process hassle-free.
Example: General Electric
B. Distributor: As discussed above, the intermediary is the distributor. The distributor is
the person/company/organization who buys the products or services from the
manufacturer and further sells it to the retailer (Foss and Saebi, 2017).
Example: Auto Dealers