Executive Summary
With increased technology, individuals and businesses are increasingly using laptops for various personal and business functions. Laptops are electronic gadgets with a microprocessor that depends on power supply to function. Solar energy is freely available and can be tapped for charging laptops. However, this technology has not yet been embraced in Australia and at large the world. There are numerous advantages that can be derived from using solar charged laptops.
They are both monetary and efficiency based policies. After coming up with the first products, they will be show cased and samples given to corporate bodies for a trial. Entry strategy in the market will be approached from an executive and corporate point of view. As an entry strategy, the company will use customer-company relation whereby instead of a marketing strategy that targets a large population, it will start from small group, individual corporate bodies, and individuals.
A customer focused approach will be adopted to ensure that the needs of customers are always understood and met. Strengths of the company which include an increased population of enlightened people will be maximized as measures are put in place to mitigate and cope with dangers posed by its weak points. Environmental strengths will also help a great deal.
New Venture Development
Introduction
There is need for a reliable source of energy to power laptops. Laptops are rechargeable gadgets which if photo electronic batteries with charging chips are used, then solar energy can be used to charge them. This report discusses an innovation of solar charged laptops. It will also give an analysis of the strengths and weaknesses that the business is likely to get.
Direct Solar Charged Laptops
Technology is on the increase. Many people today are using laptops in their day to day activities. Laptops are electronic gadget, which must depend with a reliable source of electricity to be recharged. In Australia, there is power distribution in at least 80% of the population; however the power supply is not 100% reliable. On the other hand, there is need to use the garget in areas where electricity has not reached.
At times the need to work in far territories arises; most of these areas are without electricity for instance Africa and Caribbean countries where power supply is limited. Solar energy that is freely available in nature can be tapped and used as a source of power for laptops.
Solar Energy
This energy is gotten direct from the sun by use of solar panels; however a chip should be used when in laptops. This type of energy has been used for many years although some scientists have recently started to research on how it can be put into more use. These scientists discovered that, Solar panels can be used to convert the rays from the sun into electricity.
This can be done in two ways: – one is called solar thermal applications where the sun is used to heat liquid or air. The second is called the photoelectric applications whereby photovoltaic cells are used to generate electricity directly from the solar energy (U.S Energy information Administration (EIA), n.d).
Solar energy is one of the cleanest sources of energy and has no harmful byproducts or threats. The major drawback of this type of energy is that it is very expensive to put up the solar panels and also to maintain them. To add to that the energy that is generated by these solar panels is not sufficient for large scale use.
What the product needs to incorporate is a self charging system, which is a matter of using chips that will assist in charging the laptops battery. When the battery is full, then it automatically switches itself.
The Opportunity
Technology is on the rise, there is a shift from the old office business where employees were required to report in offices to do their jobs, today home based working has taken preference. People are using desk tops, teleconferencing technology, and laptops for this noble task of serving their employer when at home.
Computers consume large amounts of power and with recession on course, any measure that aims at reducing home, office, and business expenditure is highly welcomed. When solar laptops are developed, there will be numerous benefits to the user as well as to the company they include;
Solar power is relatively cheap than electricity; this will reduce power bill budget and ensure productivity. If they are adopted by a company, they will reduce a proportion of electricity bill in trading profit and loss account. This will lead to an increased profits and money for expansion will be availed. Large amounts of revenue from business results in an increased government revenue through taxes. This will lead to developmental projects being implemented for the betterment of the country.
Australia has an all-round–the-year sunlight which can be easily tapped by the laptops charging system and used efficiently. One will not need to stay in direct sunlight to charge the laptop but all will be needed is some sunlight penetrating where the laptop is.
Execution Feasibility
Management Team – Company SWOT / TOWS analysis
Strengths
The strength of this company will undoubtedly be engineered by its internal managerial mechanisms. In order to have a competitive edge in selling its product and services, it will be advisable for the company to take advantage of its ability to compete favorably with equal players in the market. A strategic marketing plan is the only way out.
Through this arrangement, the company will be able to adopt different modalities and outreach programs of reaching out to its consumers. In a market mostly controlled by the efficiency and the affordability of the products as well as quality, it will be an open strength for the company to explore more on innovations. In retrospect, strategic marketing plan should be in a position to explicitly document the various channels that can be used by the company to allocate more resources towards improving quality (Livingston, 2008).
Weaknesses
These refer to stumbling blocks that may deter the company from progressing towards a particular direction. One of the weaknesses is attitude that customers have upon new things introduced in the market. Laptops are expensive commodities which no one would be willing to have a try and test method. When discussing the concept of strategic market planning, we discover that resources are vital for an organization to effect significant changes.
Another area of inevitable weakness is an expansion plan, which entails diversifying the level of the company activities. This may take different forms. A critical look at geographical expansion depicts a glaring possibility of other stringent market uncertainties. Right at the onset, strategic planning will demand strategic resources, both human and financial, to make any significant move.
Besides, implementation of the proposed market research will require mutual consent from all the affected divisions in the company. This will not only consume time as decisions are being made, but a lot of uncertainties abound especially on the verdict of the company.
Opportunities and Threats
Opportunities for the company are dependent on both the internal and external assessment criteria of the company’s profile of operation. Similar to the weaknesses discussed above, the company can still optimize on the various opportunities available to bring about sustainable growth through effective competition.
Some of the underlying opportunities for this company in regard to the macro environment are the diversification of its activities. The company may opt to not only run on large scale, but also produce variety of products. This concept of variety may be approached from different angles like micro lending’s via collaboration with local banks.
In striking for the right opportunities, the company will have to analyze its main market rival. The strategies being employed by the competitor should be critically assessed and evaluated for necessary counter action. In addition, the general plan of the competitor in a bid to control the market is a vital toolkit which this company can use to estimate the competitive edge of the market.
Sustainable Competitive Advantage
To have a sustainable competitive advantage, there is need to improve the products with time. The company will have a research and development team which will be mandated to survey the market and advice the management on measures to take to ensure that it remains competitive. Another way is the use of appropriate advertising and marketing strategies.
Promotions are done in the effort to either introduce a new product or increase the market segment. To engage in a promotion, the first thing to understand is the availability of the target customers. Where are they likely to be found? Are they free in the mornings, is it in the afternoon? After realizing their availability and the fact that they can give you time to sell your products, and then know the age of the market.
If the promotion is for the introduction of a new product, then a lot should be invested in assuring the client of better quality than that offered by the competitor. The existence of opinion leaders should be evaluated. The customers are likely to follow the opinion leaders in making their decisions. The existence of groups in the society and their matching lifestyles can also be of great use.
The way the consumers react is that they will follow the others. Investment should be made in this. If the promotion is for an already existing product in the market, the approach should be from the angle that we are thanking our customers. If the customer feels appreciated and recognized he will develop loyalty and influence others to follow his way.
Environmental Analysis – What Trends Have Created This Opportunity?
Australian and the world population are on the rise where the numbers of youths who are enlightened is increasingly high. On the other side, office spaces are becoming limited and an existence of briefcase companies on the rise. These people however need to communicate with each other and do business. One of the ways of doing this is the use of laptops.
On its side laptops will need to be charged, the technology of solar changing can be the solution to this. It is cheap to use and efficient clean technology. According to United Nations, (1998) the world is continuously facing an increased population. The numbers of youth and young families, who are continuously adopting modern lifestyle, are on the rise. As a result there is increased demand for laptops.
Australian population is also on the rise, according to Australian bureau of Statistics, (2010) it stands at 22,431,468. The population is mostly concentrated among the young; these are people who are below the age of fifty years. The following population structure portrays this fact;
Changing world trends- today the world is changing into a global village where more and more companies are trading with each other internationally. Signatures are now made electronically, though advertisement as well as marketing. This calls for managers and executives to be armed with a laptop at any one particular time so as they can conduct their businesses well. The need for laptops thus increases with time.
The world today is “crying” following the effects that global warming has on the economies. So far nothing has been implemented to tap the benefits that can accrue from global warming, use of sunlight for charging is one of the ways that can be derived from global warming. This however does not mean that global warming should be encouraged.
Market Analysis and Feasibility
Identification of Customer
A customer is the backbone of a company; the main decision that a marketing manager should make is on a company’s market segment. A market segment is a homogenous subset of the main market, which share similar characteristics, which make it demand similar goods. A segment is also stimulated by similar innovations. After developing a marketing segment the next step is to develop mechanisms that will enable him sell in the target market.
One of the ways to enter in the target market is marketing mix. In our case the target customers will be executives, managers, and business people for a start but the segment will be extended to general population.
To reach the market the marketing team will employ a customer relation trading where they are likely to approach potential customers and introduce their products. The company appreciates that the success of the products is based on the quality given by the products, thus the aim will be to make the product of as high quality as possible.
Value Proposition and Compelling Need to Buy
The positioning statement with be, “Solar laptops, for all your daily needs”.
Pricing Strategy
The price of a commodity is an element of total cost plus a profit margin. When a target market has been established, there is need to determine the price that the target customer will afford comfortably. A marketer should be aware of the consumer trends and their potential.
The social class that the product is targeted will influence the price of the products. The price parameter can be approached from the actual product price or the possibility that the product can be divided into smaller parts, not necessarily cheap, but the need for this is to enhance affordability. From a broader point of view the market can be divided into three sections; the high class, the middle class, and the lower class. The product target customer will be executives and corporate bodies.
Competitive Analysis – market forces (Porter 5 Forces) and competitor comparison
Porter’s Five Forces Strategy Analysis
In 1980, Porter developed a structure for analyzing the nature and extent of competition within an industry. His argument was that, in every industry, there are at least five competitive forces which establish the nature of competition within that industry. These five forces are discussed below:
Buyer’s Bargaining Power
Buyers have the ability to determine which products will move first and which will not. It is through buyers that a company realizes its competitive advantage in the market. For a long time, buyers in Australia are using HP and Dell products. This is because of efficiency of these products. Customers are pushing the need for quality efficient goods.
Supplies’ Bargaining Power
The company needs to employ goods strategies to ensure that customers are aware of the existence of the products; it is by doing this that it can influence and enter the competitive laptop business. When quality products are well known by the customers, they are likely to be more accepted. Sales team should ensure that it makes the best targets and market segmentation.
Competitive Rivalry in the industry
Within an industry, there are businesses which compete with one another for the available market share. These businesses either specialize in the production of similar products or differentiated products. In laptops, there are a number of international companies who specialize in their production; they include Dell, HP, and Toshiba among others. One of the ways of ensuring that the company enters the market is to offer something different from what these competitors are offering this will be solar charged laptops.
Threat of New Entrants
The threat of new entrants to an industry such as the electronic depends on the number of entry barriers available. The higher the entry barriers, the fewer the number of competitors will be in the industry. These barriers include: capital costs of entry, legal constraints; access to distributing channels among others.
Threat of Substitutes
A substitute product is a product that meets the same needs as those met by a product produced by the industry. The extent of the threat from a particular substitute will depend upon two factors; namely, willingness of buyers to switch to substitute products and the degree to which the value and performance of the substitute can compete with the industry’s product (Duening, Hisrich & Lechter, 2009).
Technical Feasibility
Product or Service Design, Production and Distribution
The laptop will not take a particular special shape than others although it is expected to have a chip on the front after opening it that will be the charging system.
Distribution Channels and Logistics
When a company is developing a product, there is a need that the product is supposed to fulfill. The trend that the customers follow at one given point is a change to the product that gives them a higher utility. When the product is developed, the team should always invest in offering something extra to the consumer.
In computers development there is need to give specifications that it has over and above the ones existing in the market. If the target customers are aware of the component, the campaigns should target the customers with a lot of emphasis with the components used. On the other hand, if the customers are not much interested in the components, the focus should be the outcome that the product will give.
The marketing campaigns should explain to the customer what benefit he will derive from using the new developed laptops than the others. What does the target customers expect, what are they likely to be moved by? What is the age of the target customer?
Effort should be made to ensure that the product is portrayed to give the impression of superiority. The language on the product packaging should be targeted at the desired group age. If the prices have reduced and are lower than the market prices, it is important to include them on the package.
In all the marketing of the products whether they are target to the high class, middle class, low class, the old and the youth, the marketer should assure the customers of the availability of the products at all times. Understanding the target market segment cannot be overlooked (Antil, 2008).
Operations plan
Execution Feasibility
Sustainable Competitive Advantage
To have a long lasting competitive advantage, the company will continuously improve the quality of its products. There will be research and development team which will be mandated with the task of advising the company on the developments that require making. All policies developed will be aimed at satisfying the customer and will be responsive to customers need.
Financial Feasibility
Projected Income, Start-Up and Operational Costs
The income of the company is expected to come from the sale of laptops, there will be also repairs section that will offer after sales service and also will offer repairs to external customers with both solar laptops and electric charged laptops;
Starting Capital, is the amount required to put up the facility in operation. When making the initial budget, there is need to consider costs that are incurred before the company breaks even;
The following is the projected incomes and operational cost for the initial year;
Operational cost include costs that are incurred in normal operation of the business, they include depreciation, electricity, medical expenses, and transport. This amount includes all expenses except salaries and distribution expenses.
Capital budgeting is ensuring that the finances available for various long term developments are utilized in the most efficient way. In our case we have a budget of $ 300million that should be used to establish a medical facility. This money can be divided into two
- Capital good purchase.
- Operational expenses.
Break-even, Cash Projections and Return on Investment
Break even, is the point where a business expenses and income gotten from a business is equal; at this point revenue derived from a business is equal to costs incurred in production
At Breakeven point then
Cost = revenue
That is Revenue – Cost =zero
Profits are only realized when revenue exceeds cost.
It is expected that from the second year, the company will surpass its costs. This is the time that profits will be realized. Cash projections for the next five years is as follows.
The projected cash flow is expected to increase with increase in sales as well as efficiency. There will be increased campaigns to ensure that there is awareness and derive a competitive advantage.
Resource Plan and Time Schedules
The finances to start the business will come from a loan facility that will be procured from standard chartered bank. In the loan policy there is a six months grace period and the loan term is three years.
Time Schedules
Starting up a new business is taking a risk; however if the decision is well thought there are numerous benefits that come up with investing in business. Before one set to start there are short and long terms parameters that he should consider to ensure that there will be continuity in the business.
The future is unpredictable and so even the smallest details about something should be interpolated before starting up. From the above study; it has come clear to me that entrepreneurship is all about how well one can understand the future and plan on it. It involves a process of analyzing risks associated in a certain area and working in full recognition of their presence. All mitigation factors should be put in place before the business is started (Ebbena & Johnson, 2006).
Activities will fall in a chronological way where there will be what to be done first and what follows. The first thing is to seek for location of the factory; we aim to have a different place for the factory and for displaying things. On the other hand, our sales team will be busy distributing the goods to various markets all over the world.
When all infrastructures are set, then the next step is to start operating. Operating will start when all staffs are set aboard. It will be appreciated that a company with properly shaped psychological contracts embraces a system that allows employees to air their views to the higher leadership.
A company requires both physical and human resources for its operations. Human resources are the greatest asset that an organization can have; without it no business transaction can take place. It ensures that the business is run in the right way, and thus determines the current as well as the future state of the business.
Great leaders or managers are those that can combine available strengths and weaknesses for the good of the organization. How well the human resources are sourced, developed, and retained in the organization is the work of management (Avery, 2004).
Key Risks and Mitigation Strategies
This is the uncertainty on to whether the kind of business that the company has engaged in will be of success. This is in both existing business (when they want to extend their business to other areas) and a start up business. When investing in some kind of a business there is the initial and subsequent running expenses.
In a business environment the proceeds from the business should cover all this and there remain a portion that is the profit of the investor. This is not always the case and one may invest and then only losses are accruing from the investment; the risk that the firm will have to undertake is that of possibility that the business leads into a loss. On the other side, this is a normal situation that must be faced in business. The most important thing is to do a good study of the market situation before you invest.
Risk Mitigation Strategies
Risk Transfer
This is the transfer of risk to an insurance body. The contract provides that in consideration of a certain periodically paid premium then the insurance will mitigate the client. It works in a way that the businessman remains at the original position before the loss occurred. The amount of premium paid is proportional to the possibility of a loss and the value of the loss.
However, it is important to realize that the risk holder is the insured but the insurance company only comes in as a litigator of the loss. There are those properties that by law are required to be insured. This includes motor vehicles. There is a risk that can be associated with this method of mitigating loss; this is when the insuring company cannot be relied upon.
There are some insurance companies that assume risks that they cannot handle. To avoid this, a company should ensure that it engages into an insurance contract with a company with good financial strength. Another way that this can be done is by insuring the same risk with more than one insurance company (Borodzicz, 2005).
Exit Strategy (if appropriate)
It is not always the case that a business set up will be successful, there are times that it may fail; when starting a business this should be taken into consideration. Business dynamics cannot be predicted with a 100% certainty. If the trend fails to favor a business, then the business is more likely not to meet its obligation. It may be a failure in the market, change of fashion, calamities or negative goodwill created; they may hinder continuity of a business (Shane, 2003). To cater for this eventuality there is need to have an exit plan. Mitigating any loss that is likely to result from loss of business is one of the common ways to have an exit strategy that will not hurt the entrepreneur.
Concluding Recommendation
Laptops are gadgets whose use is on the rise in the recent changing world of technology. They use electric power to operate; solar energy is freely available energy source which can be tapped to charge laptops. This is a new invention that has not been implemented in the world.
A customer is the backbone of a company; the main decision that a marketing manager should make is on a company’s market segment. One of the ways to enter in the target market is marketing mix. The 4Ps represent Price, product/service, promotion, and place. The aim of the marketing mix is that for effective marketing then products should be available to the target customer at the right price and the right place.
Reference List
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