Innovative Business Ideas: An Evaluation Report for MGMT20143

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Central Queensland University, Australia
Term –
MGMT20143 Assessment 3
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Executive summary
Innovativeness and creativity is the key trend of the market and it is impacting the productivity
of the organizations in a significant manner. The respective assignment is based on a similar
concept. Three innovative ideas are proposed with the concerned assignment. Aside to this all of
these ideas are evaluated in order to identify the most significant idea for the future business.
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Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Evaluation of the idea......................................................................................................................5
Idea Selection...................................................................................................................................7
Improvements..................................................................................................................................8
Revised Business Model..................................................................................................................9
Cash flow projections....................................................................................................................10
References......................................................................................................................................12
Abstract..........................................................................................................................................14
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Introduction
The respective report is based on the selection and elaboration of the best business idea. The
deliverables of the report are based on the content of assignment 2. With the help of this
assignment, the ideas as proposed in the 2 assignment are compared and evaluated. With the
assistance of this assignment, three ideas are evaluated and the superior of them is selected for
conducting the future business. Along with this, a number of improvements are also proposed in
this assignment that will help in enhancing the scope of the idea. The assignment will likewise
incorporate the financial data related to the specified idea such as cash flow statement, breakeven
point and so forth.
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Evaluation of the idea
In this segment both the proposed ideas will be evaluated in order to scrutinize the best proposal.
An evaluation framework is a strategy in which the ideas studied based on different concepts and
framework. Two ideas that will be evaluated using the evaluation framework are as follows:
 W-Safe
W-Safe is a device that is the result of advanced technology. With the help of this
technology, the safety of women's can be assured. This is basically an application that can
help in facilitating safety to the women's. This application is incorporated with GPS,
audio and SMS facility and other factors that can help the women's in uncertain
situations.
 Efficient pizza, emails, letters delivery using drone technology
This is another business idea that is based on advanced technology. With the help of this
idea, the drone technology will be utilised for conducting the functions related to the
delivery of pizza, letters and emails. This idea will help in resolving the delivery related
queries of the customers and will help in providing them with the feasible services.
 Eatlery
The respective idea is designed in collaboration with an Indian industry named as S. G.
Marketing. The primary objective of the respective idea is to reduce the amount of plastic
cutlery from the market and to replace the same with cutlery made of bio-degradable
material (Anuar Sharuddin, et. al., 2017).
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All of these ideas are evaluated with the help of the table provided below:
Key factors Idea 1
W-Safe
Idea 2
Efficient pizza, emails,
letters delivery using
drone technology
Idea 3
Eatlery
Market segment The respective
business will not be
able to cover a high
area of the market
as the application
will require heavy
advertisement
The respective idea will
cover a minimal market
area as the respective idea
holds a good market
value.
This idea will cover
the maximum share of
the market as the base
of this idea will help in
attracting the concern
of youngsters
Value to
stakeholders/investors
This idea will not be
profitable enough to
the stakeholders
will not be satisfied
The idea will help to
provide good value to the
investors as the profit
margins will be high
The stakeholders will
be satisfied as the idea
holds great ethical
values and is profitable
as well.
Management of
resources
Managing the
resources can be a
costly and time-
consuming affair
Time management can be
an issue in this proposal
Management of
resources will be
possible as the idea is
feasible and
sustainable. Aside to
this, it holds a great
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ethical value.
Idea Selection
Among all of the proposed idea, a significant idea will be selected. The selected idea must be
holding great economical and sustainable value. With the assistance of the evaluation
framework, it is identified that Eatlery is the most significant idea of them all. The factors that
help in justifying the superiority of Eatlery in comparison to other proposals are as follows:
 The respective idea holds a great ethical value towards the society and the environment
 With the help of respective idea the organization will be able to enhance the scope of
environmental safety while at the same time will be capable of making profit
 This idea will help in attracting the youngsters and the awaken population
 The respective idea will help in shaping the future of the cutlery business (Anuar
Sharuddin, et. al., 2017).
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Improvements
The idea which is selected by the evaluation framework holds a significant value towards the
environment. With the assistance of the respective idea, the entrepreneur will be able to enhance
the scale of profitability. The idea will not only help in improving the brand image of the firm
but will likewise assist in holding a great value for the stakeholders. With respect to all these
aspects, it can be commented that this is the most effective idea in comparison to the other two
(Brooks, Wang & Jambeck, 2018).
Aside to this result, it is identified that the concerned idea is surrounded by a number of failures.
The marketing strategy as adopted to implement this idea is not advanced and will not prove
profitable for the organization. Along with this, the respective idea will require a great amount of
investment for its effective launch in the market. Looking forward to this scenario following
changes can be suggested for the implementation of the idea:
 The entrepreneur must try to make advertise its idea with the help of digital marketing
 The firm can try to collect the funds from the NGO working for the protection of the
environment. This will help in dealing with future interest rates (Brooks, Wang &
Jambeck, 2018).
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Revised Business Model
Key partners Key activities Value
proposition
Customer
relationship
Customer
segments
Key resources Channels
Cost structure Revenue streams
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 Investors
 Entrepreneur
 Manufacturer
s
 Advertising
agents
 Manufacturing
 Advertising
 Sales
 Enhancing the
share of the
market by
attracting
youngsters
The
respective
idea will help
in enhancing
the scope of
environment
protection
while at the
same time
helps in the
generation of
profits
 Enables
the safety
of the
environme
nt and
health
 Online
availabilit
y
 Online
food
services
 Restaur
ants
 Malls
and
grocery
stores
 Retailers
 Online
stores
 Manufactu
rers
 Outsourcin
g of sales
 Raw material
from farmers
 Advertisers
 Outsourcers
 Sales
executives
 Raw material
 Marketing
 Outsourcing
 Packaging
 Online stores
 Another hidden cost
 Marketing
 Outsourcing
 Online stores
 New food packaging and
delivering companies

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Cash flow projections
Units Sold 900
Particulars Amount ($)
Selling Price per unit 150
Variable Cost per unit 80
Contribution per unit 70
Number of units 1000
Total Contribution 70000
Fixed Overhead 60000
Current year Profit 10000
Break-even Point (in units) 857
Break-even Point (in amount) 128571
Return on Investment 7%
Break-even point shows the amount or units of goods at which the company earns no profits and
no loss. It is the point where costs are equal to the revenue of the products sold. Here, Break-
even point is 857 units which mean the company will not incur any losses nor will it earn any
profits if the sales are 857 units. It also expresses that if the sales units are less than BEP units
company will incur losses and if the units of sales are more than BEP units it will tend to earn
profits in the business (Brooks, Wang & Jambeck, 2018). Break-even point in amounts is 128571
dollars which is the selling price per unit multiplied by BEP units. Return on investment is 7%
which defines that the rate of the company's profit on its total investment is 7%.
Particulars 2017 2018
Best Case Worst
case
Best
Case
Worst
case
Cash Flow from Operating
Activities:
Cash Flow from
Operating Activities:
Sales revenue in cash 70,000
38,000 74,000 39,000
Cash paid to suppliers 20,000
21,000 28,000 33,000
Operational expenses 6,000
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9,000 8,000 4,000
Income tax expenses 7,000
4,000 8,000 5,000
Cash Flow generated from
Operating Activities
37,000
4,000 30,000 (3,000)
Cash Flow from Investing
Activities:
Purchase of Equipment 15,000
11,000 24,000 19,000
Sale proceeds from equipment 9,000
4,000 15,000 7,000
Cash Flow generated from
Investing Activities
(6,000)
(7,000) (9,000) (12,000
)
Cash Flow from Financing
Activities:
Issues of Debentures 18,000
15,000 24,000 18,000
Issue of Shares 4,000
7,000 7,000 9,000
Interest Payment 9,000
7,500 12,000 9,000
Cash Flow generated from
Financing Activities
13,000
14,500 19,000 18,000
Net Cash flow for the year 44,000
11,500 40,000 3,000
Opening Cash and Cash
Equivalents
-
- - -
Closing Cash and Cash
Equivalents
44,000
11,500 40,000 3,000
The above table is highlighting the cash flow analysis of Eatlery. As per this statement, it can be
highlighted that the company will have a good financial position in the market and will likewise
be able to enhance its level of financial resources in an effective manner (Sort & Nielsen, 2018).
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