Businesses strategies

Management plans



Management plans, unlike tactics, rely on strategic business objectives. Running a sole-owned company means-testing grand tactics such as product creation to liquidate the launch of a new sole-owned business to compete with a well-established business enterprise such as Starbucks, and the following strategies are very important.



Business expansion



Due to the low risk involved, the appropriate approach to be put in place to deal with Starbuck would be business expansion. The approach focuses on growing the market share rather than engaging in research and design in order to better the new product and thus concentrates more on improving existing commercial drinks. To expand into a new market it may be necessary to penetrate other markets such as foreign countries using the current advanced technology to support the business market growth considering the revolutionary in the business environment.



Electronic commerce (E-commerce)



Mulock (2012) defines electronic commerce (E-commerce) as the use of information to enhance communication transaction with all of the organization stakeholders majorly to gain market share, increase business profitability, improve customer service, and fast delivery of business products. With most potential customers connected on the internet, the use of social media will highly contribute to the new business market growth. The business will aim to extensively invest in social media to reach the mass distributed potential consumers and other business partners such as suppliers. The plan to use social- commerce in Facebook, YouTube, and Instagram will allow the business to run real-time updates on Facebook on current news, business events, and business product information (Bajec, & Jakomin, 2010).



Build or Buy



Starting a new business could be the perfect solution rather than buying the Starbuck an established organization. Skripak (2017) developed a decision framework that helps simplify buy or build environment based on business strategy and economic factors. The current competitive is changing rapidly. Business strategy is of importance to the company in determining whether to buy or build in anticipating the future changes.



Economic factors



For a period of a long time, the basic goal of buying was to reduce the cost of expenditure which is not true currently. The impact of buying is costly on considering capital expenditure, return on invested capital and return on assets; In such a case, buying is very costly than starting a new business. According to Mulock( 2012) most entrepreneurs prefer buying an established business organization in order to avoid expenses of a starting a new business. Basically, relying on the starting a new business costs estimates ignoring the variable costs associated with buying but not total cost involved has made start up from scratch cheaper. The variable costs i.e. administrative costs, expanding inventories costs and the impact on lean flows are additional costs that contribute to high total cost associated with buying an established business such as Starbuck.



Business Strategy



The decision to buy or make must be guided by the common rule that determines the strategic success of the core product of the company even after buying. Buying an established business like the Starbuck may change the perception of its loyal customers, the customers will tend to develop a negative attitude towards the new management which may adversely impact the business sales revenue. For example, when North America production bought a German company Lowenbraw based in US which was at the moment was performing so well. Customers shifted to other alternative goods because the Lowernbraw loyal customers no longer consider the new management product as genuine.



New business form of ownership



The major issue in considering the appropriate form of ownership when setting up a new business ownership lies on the understanding the feature of each form of ownership The impacts of such business and also the entrepreneur personal circumstances During the evaluation process in identifying the right business ownership, the following issues need to be considered.



Tax consideration



The ever-changing business environment normally affects the business income from time to time. An entrepreneur should, therefore, calculate the average tax changes in the different period have effects on the firm's bottom line (Mulock, 2012).



Liability exposure



When starting a new business, an entrepreneur balances the legal and financial liabilities and decides the level to which they are willing to assume personal responsibility for the company's obligation. Most entrepreneurs with low tolerance for the risk of loss may choose a form of ownership that provides greater protection for personal assets. Some forms of business ownership are better compared to others as far as sourcing of finance when raising the start-up capital. After start-up, expansion of the business will call for extra capital so the type of ownership must be considered because some business ownership it's easier to outsource outside financing (Bajec, & Jakomin, 2010).



Managerial ability



Skills and knowledge are one of the major factors to consider when starting a new business. Entrepreneurs have to assess their ability to successfully manage the business. In case of the absence of such skills, entrepreneurs need to select a form of ownership that enables them to hire specialists with the needed skills and experience into the company (Skripak, 2017).



Cost of formation



The complexity of starting a new business varies from one form to another. Entrepreneurs must carefully consider the legal procedure needed for each form and the benefits and costs of a particular form.



This business thus needs partnership form of business ownership to run smoothly and compete with existing businesses such as Starbucks. A general partnership is a business jointly owned and run by a minimum of two and a maximum of 20 partners. Forming a partnership is not easy as it is in the case of sole proprietorship but still, it is easy and cheap. The cost of forming a partnership depends on the size and activities of the firm. This kind of business ownership is flexible. During its formation, partners are allowed to form a simple partnership without the need to hire professionals in running business activities. The main challenging factor in running a partnership business is the unlimited liability among its partners. Each partner is personally liable for their actions and the other partner's actions as well. Consequently, it is also accepted by the law for the partners to constitute a limited partnership. The partnership has several merits and demerits over sole proprietorship. This kind of business ownership brings in diverse talents from different partners which promote sharing of ideas and responsibilities in the business. On capital contribution, the partners are allowed to secure bank loans using their personal assets to contribute to the business capital. Continuity of a partnership is more guaranteed than in the case of the sole proprietorship; the partners can mutually agree to continue with the business even after the death of two or more partners (Bajec, & Jakomin, 2010).



Business plan outline



Executive Summary



1.4.1 Business description



The business name is E-CAFE. It deals with the sale of beverage products. The business is located in Seattle, Washington DC; this is a strategic location in relation to targeted customers who comprise of the general public. E-CAFE is a medium-sized wholesale and retail business, and it is in the trade industry which deals with the sale and providence of beverages and foodstuffs to the people. It is to commence June 2017 under the stewardship of the partners. The planned business will be a startup and partnership-owned.



Marketing plan



1.4.2 Marketing plan



Marketing will be done to ensure that the business products are known. The customers are categorized as individuals, business owners, institutions for educations. The business will, therefore, offer products with the prices and quality in accordance with their purchasing power. The estimated market share in the US is 30%. The business will use the competitor's weaknesses as strengths in order to increase the market share.



Organization and management plan



1.4.3 Organization and management plan



The business will recruit qualified personnel with relevant skills and experience that include: the Manager, Accountant, and Secretary, salesmen, attendants, and other subordinates. Competent directors are the partners of the business who lead the team and make all decisions concerning the business. Vacancies will be advertised locally through radio station, magazines, and advertisement through brochures and posters. The business will offer off the Job training i.e. workshops and a trade fair to advance the skills of the management team. The business will incur a total cost of $900 per month to remunerate its staff. Medical allowances as well as housing will also be catered for. The respective licenses and permits will be acquired from local authorities at a cost of $50 per annum.



Production and operation plan



1.4.4 Production and operation plan



The business premises will be located in Seattle, Washington DC which includes the salesroom, offices, and the storeroom. A total of 15 workers are required. The business will obtain the materials and equipment to be used before the start-up of the business and after. Production strategy to be used will be competent since the workers are all skilled. Records will be kept and assets maintained as well as customer complaints addressed wisely. In the production procedures, the following stages are included: the registration form is placed on the accountant's desk by the salesmen, and an order is placed by the accountant with several suppliers. Catalogue receipts from the suppliers, an order is then sent to the supplier with correct terms, prices, and products, delivery of goods to the business, inspection is done by the storeman, recording is done and goods stored thereafter. Goods are displayed in the salesroom for sale.



The financial plan



1.4.5 The financial plan



The Business will require $7000 to start up. This amount is inclusive of pre-operational costs, working capital which will be used to cater for daily operations of the investment. We expect an average income of $200 Monthly. We further project a breakeven level of $2000 which is considerably impressive. This is Impressive evidence of progress and the bank can be approached for further loans in case of financial need arises.



References



Bajec, P., & Jakomin, I. (2010). A Make-or-buy Decision Process for Outsourcing. PROMET - Traffic&Transportation, 22(4), 298-400.



Mulock, B. (2012). Small Business Administration (1st ed.). [Washington, D.C.]: Congressional Research Service, Library of Congress.



Skripak, S. (2017). Forms of Business ownership (1st ed., pp. 87-129). Virginia: Pamplin College of Business and Virginia Tech Libraries July 2016.

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