Entrepreneurship: Feasibility of a New Hotel Joint Venture Report

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This report presents a detailed analysis of a new hotel venture in Australia, focusing on the application of entrepreneurial principles. It begins with an executive summary and introduction, followed by a comprehensive business model canvas that dissects customer segments, value propositions, customer relationships, key activities, key partners, key resources, cost structures, communication channels, and revenue streams. The report then delves into a feasibility analysis, examining market, technical, human, and financial aspects. The core concept revolves around a hotel offering entertainment (theatre) and a playgroup for children, targeting a premium customer segment. The business model canvas is used to outline the key components of the business, including customer segmentation (travelers and Australian residents), value proposition (entertainment and child care), and revenue streams (room bookings, theatre, and playgroup). The feasibility analysis assesses the viability of the venture, considering market conditions, technical requirements, human resource needs, and financial projections. The report concludes with a summary of findings and a list of references.
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Entrepreneurship 1
Entrepreneurship
A new joint venture
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Entrepreneurship 2
Executive summary
Entrepreneurship is considered as the engine that is able to grow the economy favorable.
It is easy to get idea for opening new business but it is hard to execute the plan with analyzing
the ach factors of the market for the purpose of growing in the market. The report has been
focused on new idea in existing industry of Australia. Idea has been taken in the hotel industry
which has been evaluated as the boon industry in the Australia. The nine building block of
business model aided to know more requirements about establishing new idea in existing
industry. Feasibility analysis has been done so that the strength and weakness of the company
can come to know in the view of entrepreneurship.
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Entrepreneurship 3
Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Business model canvas....................................................................................................................5
Customer segments......................................................................................................................5
Value proposition.........................................................................................................................6
Customer relationship..................................................................................................................6
Key activities................................................................................................................................7
Key partners.................................................................................................................................7
Key resources...............................................................................................................................7
Cost structures..............................................................................................................................8
Communication channel..............................................................................................................9
Revenue streams........................................................................................................................10
Minimum Viable Product (MVP) (if applicable).......................................................................10
Feasibility analysis.........................................................................................................................11
Market feasibility.......................................................................................................................11
Technical feasibility...................................................................................................................12
Human feasibility.......................................................................................................................12
Financial feasibility....................................................................................................................13
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Entrepreneurship 4
Conclusion.....................................................................................................................................14
References......................................................................................................................................15
Appendix 1.....................................................................................................................................17
Appendix 2.....................................................................................................................................19
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Entrepreneurship 5
Introduction
There are so many aspects and factors which should be analyzed while developing the
new venture. It is important to analyze various components of business before going with new
idea of new venture. Business model canvas facilitates to understand the each elements of new
business idea in an appropriate manner. The report will focus on the new idea that is opening
new hotel in the Australia. It is the industry which is very competitive and huge advantages
which provides enlarge opportunities to entrepreneur. The hotel which will be discussed in below
that serves the people with great quality of accommodation as well as food services. Australia is
an attractive place for tourists and the idea of opening new hotel near tourist place will be
advantageous for entrepreneur. It is the hotel which would be full of entertainment because it
would give theatre and playgroup in the hotel. It is the hotel that serves the market with
entertainment along with accommodation. This business will operate the targeting market of the
Interested people who fond of travelling. Along with that it will have playgroup because it has
been analyzed that parents with child cannot have enjoy that much due to proper care of child.
Due to having playgroup in hotel, it would be helpful for the parents to go outside for certain
period and apart from that the different activities in playgroup will be facilitated to learn new
things of new culture to child. It is the business that can only the target of premium customer
because the staying cost in the hotel will be very high in comparison of normal hotels.
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Entrepreneurship 6
Business model canvas
Business model canvas is considered as the instrument which will be obliging for the
organization to initiate new idea and concepts supporting financial viability of an organization.
With the help of business model canvas, an organization is capable to generate revenues and
turnover from the operation of the company. It helps to attain the rationale of the business and
assist to distinguish the source of company for increasing the revenue (Bohm, 2015). It aids to
get know about the value of the business and its strategies to deliver effective services and values
in sophisticated manner. It is made with nine building blocks such as value proposition, key
activities, key partners, revenue streams. client segmentation, cost structure, key sources,
communication channel and client relationship.
Figure 1: Business model canvas
Source: (Itami, & Nishino, 2010).
Segments of customer
It is the first element of the business model that involves all entire member of the
organization for which business building the value. It is vital for the new hotel with special
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Entrepreneurship 7
quality to construct the customer segment because an organization is liable to serve the services
one or several customer segment. As discussed that the business is providing the theatre services
for entertainment and playgroup for learning new things to the child who arrive from different
culture. The hotel can also target the customers who have been living in Australia for long time.
Value proposition
A value proposition is the statement of business and marketing that a business utilizes to
define that why a customer should purchase a product or use a services. As far as this restaurant
is conferred it provides the facility of theatre and playgroup for child within the hotel. Serving
the good facility in a sophisticated manner attracts the travel lover to stay in this hotel for
experiencing new things and learn their child about their culture and trends. It has been evaluated
that the segment of people who are fond of travelling and experience of new things, thus it would
be the enormous idea to provide the people with the theatre and playgroup in the hotel (Nieves
and Segarra-Ciprés, 2015). Australia is rich in tourist place so there are number of tourist as well
as citizens of Australia who visit different place so it would not be difficult for the business to
make so many efforts in convincing people to have experience of new things.
Customer relationship
Customer relationship can be driven by focusing on various motivations techniques such
as customer retention, customer acquisition and up selling. The new venture would be dealing
with online as well as offline ways. Customers are the key of success so it is essential for the new
business venture to keep focusing on the satisfaction level of the customers so that they back
again for experiencing services of hotel and recommend to others for staying (Lager, 2010). The
hotel can provide the additional activities to maintain the long term relationship with customers.
These activities can include the specific movie, drama and small functions for entertainment.
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Key activities
Key activities are vital for the company because it includes the various activities which
are integral for the business to execute the new business idea. There are various sorts of key
behavior such as production, problem solving and platform. The key activities of new venture are
serving higher quality in service so that customer get attract and recommend others. Provide the
facility to customer for prior booking from home (Fraj, Matute, and Melero, 2015). It promotes
the services to customer by up selling and other marketing activities such as discount on prior
booking, special place of sitting in theatre and various activities in playgroup for their children.
Key partners
The key partners can be considered as the partners that are being included in the business
or are associates with the business for the purpose of supporting the activities of business. It has
been analyzed that there are number of activities which would be helpful for the hotel industry,
there are many helpful elements such as logistics, suppliers, maintenance team, experts of
activities and teachers. The major key partner of the new venture would be legal partners,
investors, financial partners and logistic partners. Partnership is able to decrease the risk in the
environment of uncertainty (Orfila-Sintes and Mattsson, 2009).
Major resources
A key resource as the element of building block can be defined as the vital assets needed
to make a business model work. it is available where when an organization can develop the value
proposition and turnover. Key resources can be physical resources, human resources and
financial resources. A physical resource are considered as the tangible resources and involves
equipment, building, manufacturing plants, building and inventory that enable the business to
function. The interior of the hotel would be attractive and define the specific features of hotel
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Entrepreneurship 9
while entering in the hotel (Nicolau and Santa-María, 2013). The appearance of the hotel should
be done in perfect theme so that the images take place in the mind of customer. Human resources
are the essential resource of the hotel. Human resources are in the form of receptionists, waiters,
management and IT department for handling the online website of hotel for prior booking and
updating customer about the features of the hotel. It is essential to penetrate in the market to
attract the customer, it is necessary for the company to be a financial strong and maintain the
effective image in the view of outsiders (Mackey and Sisodia, 2014). By being a financial strong
hotel can provide the attractive and luxurious services to its customers.
Cost structures
The structure of cost includes entire costs incurred to make a business model works. The
cost of hotel can be calculated in simplest manner after determining the key activities, key
partnership and key resources. The cost structure of hotel is defined below.
Cost of the startup
Expenses Amount
Hotel infrastructure cost
Servicing cost
Legal charges and expenses
Portal expense and IT cost
Marketing and hiring cost
Total Start-up Expenses
$80000
$40000
$8000
$20000
$30000
$178000
Start-up Assets
Cash in hand
Long-term and short terms assets
$80000
$100,000
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Current assets
$30000
Total Start-up Requirements $210000
The cost structure of the hotel defines that there are various activities that need cost to be
spent by the entrepreneur of the enterprise. It has been evaluated that sales at 210000 AUD is
required to start up the new business. Along with that it is also required to manage the all
activities of the hotel effectively so that all resources can be used appropriately.
Communication channel
Communication channel is most important for the new venture to get promoted in an
appropriate manner so that targeted market can get aware about new hotel while visiting in
Australia. Social media is the most popular tool which would be helpful for the new venture to
promote its new idea in the hotel. Along with that there are so many channel exist which is able
to promote the hotel in sophisticated manner (Morecroft, 2015). Organization can use online site
to make easy booking for visitors and allow them as well to book after reaching at hotel. It is
proficient element of business model canvas to deliver a value proposition to the customer.
Revenue streams
It is the most important element of the building block signifying the cash of a company
generates from each segment. In the context of new idea for hotel, the structure of revenue of the
hotel is very easy. Customers are allowed to pay bill from electronic medium as well as cash.
The organization can also earn revenues in the form of online booking of rooms, theatre and
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playgroup. An organization can also apply some strategies to earn revenues by offering packages
to its regular customer and some advantages to its first time customer (Lober, 2015). Revenue
stream may have the several pricing mechanism such as volume dependent, bargaining or yield
management.
Minimum Viable Product (MVP) (if applicable)
A minimum viable product is considered as the development technique in which latest
technique or idea is generated with appropriate features. It has the flexible working nature and it
offers some major discrete advantages such as minimum cost of production because it provides
the genuine information about the exact needs of the customer. It has been analyzed that the
major services is provided to customer is special entertainment by theatre and playgroup service
for learning new things about new culture to the children of tourists.
Feasibility analysis
Feasibility analysis of the business demonstrates that how much the business is feasible
to enter the new market in term of several elements such as financial, human resource and
marketing. It facilitates business to determine various aspects in term of analyzing the strength
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Entrepreneurship 12
and weaknesses of the new idea in the existing business. There are some types of feasibility is
mentioned below in the term of new idea in the hotel.
Figure 2: Feasibility analysis
Source: (Cho, Kim, Choi and Jeong, 2016,).
Market feasibility
Market feasibility helps to determine various aspects before entering into new market in
depth so that entrepreneur get to know about the condition to enter in the new market and how is
the market of the business (Jo, Lee, Suh, Kim and Park, 2015). It has been analyzed that the
industry of hotel in Australia is growing and become a booming industry. It has been evaluated
in the report of Newsroom that in the beginning months of 2016, it has been seen that about $1.7
billion of hotel transaction takes place in Australia. Market feasibility is the process to facilitate
the effective source for evaluating the several integral aspects for start up new venture with new
features. It has been determined by analyzing the market of hotel that there is no strict restriction
in hotel industry and it would be easy for the entrepreneur to start up new venture in this industry
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