E-business is the most appropriate strategy for Pete Moss. The strategy will enable the entrepreneur to increase profits and improve customer service. It is highly recommended for the man due to the nature of the business he runs.
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Based on the nature of the business, it is evident that Pete does not offer physical products, which may require the presence of a physical business premises. Tax preparation is a service that can be done online without difficulties. In this case, Pete should consider moving his business to the online world where customer interaction will be enhanced.
Recommendation of E-business as a strategy is also based on Pete’s lifestyle. As indicated in the case, Pete has a busy social life and therefore can only work five days a week. The entrepreneur also spends his weekends skiing. The other reason is that the customer traffic for the business is very unpredictable since most of the clients visit the office on a random pattern.
Therefore, the company has to incur idle time since the employees are forced to wait for the customers in the office. The other issue that causes idleness among the employees is that all the clients come to the office with the processed data.
Pete’s decision to charge fixed prices to the clients also qualifies the business to operate online. The fixed pricing method is very effective in E-business where customers are guided by the pricing strategy and the quality of services offered by the business. It will also be very effective in the management of online business.
So, the customers will enjoy the reduced expenses in upfront costs that are associated with processing the tax returns. The approach will enable Pete to achieve repeat purchases from brand loyal clients and attract new customers in the market.
To expand the business at a very low cost, Pete should consider E-business as the most appropriate strategy. This business type will allow him to increase the number of client visits from 3 per week as indicated in the case to 5 per week. For instance, reasoning from the information provided by the marketing research firm, Pete will achieve an average client visit rate of 3.75 per week. This implies that to achieve an average of 3.75 visits, the highest figure can be five while the lowest figure can be three.
The figures are very reliable because the research company used the Poisson distribution method to determine the frequency of customer visits. From these results, it is evident that Pete has a great opportunity to increase the traffic. E-business will guarantee the operation of 7 days per week compared to 5 days per week.
Increased customer visits will translate to high traffic and profits to the organization. For example, initially Pete had 3 arrivals weekly where each client paid a fixed fee of $ 550, which leads to $ 1650 of revenues. With the implementation of E-business, the rate of arrivals will be 3.75 per week while the customers will pay the same amount of $ 550 per one individual.
This leads to $ 2062.5 in revenues. From the calculations, it is therefore evident that Pete will not only increase the number of customer visits, but also enlarges the revenue earnings from the business. Pete will enjoy the growth in revenue of $ 412.5, which translates to 25% increase in revenue.
In addition, Pete will reduce the cost of operation since he may not require the assistance of senior and junior accountants. The business will also cut expenses associated with the cost of labor, the cost of rent, power, and overhead expenses incurred in the operation of the business. The approach will enable the organization to enhance efficiency as well as allow Pete to pursue other needs in life.
One should consider that tax return process requires online operations for the success of the business. The process involves data entry and management appropriate for online transactions. From the case, all the processes can be done online with no need in a physical office.
For instance, initial meeting with a client, which takes approximately 3 hours, can be done online when the client has presented the data. To achieve this, Pete should organize the website to enhance customer interaction. This can include the automatic response system that does not require the presence of Pete for routine operations.
The data review, which is the next process in the system, can also be done automatically by developing effective software. The software will replace the need of a junior accountant. The review process should also be automated to make it possible for Pete to multitask on the related activities of the business.
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The next process is the input of data into the computer. This stage may require Pete to hire one junior accountant. However, the workload will be greatly reduced and the accountant can be encouraged to do the job on a part-time basis. Pete will only be required to review the initial output. The presence of the review software will also allow Pete to reduce his own workload and pay attention to other customers visiting the business.
Moreover, the automated system can check the missing forms. To facilitate this process, Pete should ensure that all the tax codes are filled in every form. Using appropriate formulas, the system should also enable Pete to review the relevant tax codes in a given order.
Meeting the client after the data review is the key stage in the business that will require the presence of the entrepreneur. Thus, Pete should meet the customer and perform the final analysis to ensure that data is free from errors. This is one of the activities in the business that will necessitate the online presence of the man.
Such tools like Skype and other video enabled communication devices may be used to enhance customer experience. These tools can let Pete attend to different meetings connected to the customers’ needs and handle all the queries raised by them. The process is also important for Pete to predict consumer behavior and identify new business opportunities that can be applied for further improvement of the performance in the organization.
E-business will benefit both the customers and the entrepreneur. Pete will not only reduce the number of accountants to one, but also improve on the quality of the services offered. The process description of the business activities reveals that Pete may only require the assistance of one accountant.
Moreover, the accountant will only work on a part-time basis, which will enable Pete to reduce the labor costs while at the same time improve labor productivity. However, the involvement of the junior accountant in the business can be eliminated if Pete decides to adopt an effective automated system with reliable software. The software will perform all activities such as data entry and checking the missing forms in the system.
Pete should also consider E-business in order to balance his personal life with the needs of the business. For example, the adoption of E-business will only require Pete to perform one important activity in the process description. The rest of the activities in the process can be performed by the software. On the other hand, Pete only meets the clients during the final review process. This strategy will let the entrepreneur meet other needs in life.
The initial capital required for the strategy will be $ 2000, which will be spent in building the website for the business. A comparison of the initial capital and the expected revenues indicates that the strategy is not only profitable, but also very sustainable. For instance, from the revenue calculations, Pete will earn $ 2062.5 per week. This means that the entrepreneur can recover the initial capital within one week.
E-business fosters convenience to the entrepreneur and to the customers of the business. In this case, the customers will perform their transactions from their premises. This will make it possible for the clients to reduce the cost of travelling and the time consumed.
The approach will also allow the organization to reduce the expense resulting from order processing cost and response to customer requirements. The clients of the business will get enough time to evaluate the services provided by the organization and make informed decisions. The customers will also shorten the time spent in processing the transactions.
The proper error detection is another key advantage that will enable the business to improve the quality of services and enhance customer satisfaction. For example, in this case, proper coding of the tax forms will facilitate the operations of the system. E-business will also result in improving on the presentation of the services offered to the customers.
Thus, a well designed website with high quality graphics will convey a positive image to the consumers and also develops the brand preference. The approach will make Pete attract more customers to the site and reduce the cost of advertisement.
The access to information is a vital element in online marketing because it betters customer awareness on different brands in the market. The strategy will therefore enable the customers to access adequate data on the services offered by the business.
Online business tools such as search engines and product catalogs will provide reliable information to the clients. In addition, E-business will get a valuable opportunity for the organization to expand in other markets. Pete’s business will attract different consumers from different regions with various needs.
Expansion into new markets makes it possible for the organization to increase its revenues and profits. Based on the advantages of E-business, Pete should therefore consider this approach as the best advice. The strategy will not only enable the entrepreneur to improve the performance of the business, but also achieve a desired balance between the social needs of life and the business requirements. To this end, Pete will run a successful business and achieve all the requirements on the social aspect of life.