Business Plan For Entrepreneurship and Innovation Conditions

Question: An Entrepreneur who has had measurable success with at least one venture. à ¢Ã¢â€š ¬Ã‚ ¨The situation involved could be a new business venture, a new product or a new process but it should represent a significantly new direction for the entrepreneur and/or the organisation. à ¢Ã¢â€š ¬Ã‚ ¨Write a short report about what happened and how it confirms or disconfirms the principles in your textbook, emphasising: à ¢Ã¢â€š ¬Ã‚ ¨ The historical background and environmental conditions that led to its emergence, à ¢Ã¢â€š ¬Ã‚ ¨ A description of the approach, attitudes and behaviour towards the innovation à ¢Ã¢â€š ¬Ã‚ ¨ The strategies that were employed and which ones contributed most to the innovations success. à ¢Ã¢â€š ¬Ã‚ ¨Important Instructions à ¢Ã¢â€š ¬Ã‚ ¨ Answer: Introduction Innovation is adopted by the entrepreneurs in order to bring changes into their business operations so that market cap can be increased. The innovation helps the entrepreneur to explore business opportunity in order to benefit the business and earn long term profitability (Barney, 2009). Therefore, the current study will be presenting a report which will be discussing the innovation made by the entrepreneur to gain better consumer base. For this report Spar Company has been chosen which took a decision to start the own brand packaged for organic food in the retail store in order to increase their profit level (Spar-international.com, 2015). Historical Background and Environmental Conditions The retail industry in UK is developing at an increasing pace and Spar Plc also operates in UK so that they can gain benefit from the retail industry of UK. The continuous rise in competition, many retail industries are adopting different kinds of strategies and innovation in their business approach so that they can cater the large customers (Barringer, 2010). The Spar Plc is facing stiff competition from different companies such as Morrison, Sainsbury and Waitrose. As a result, company is not able to win over their competitors in terms of market share. Moreover, the retail industry of Spar Plc is planning to adopt some innovative technique that can help in increasing the market share and gain better income from their retain chain (Clarke, 2010). From the data of April 2014, it can be found that customers in UK spend more than 27 billion for purchasing retail products. Retail Chain Market Share (%) Somerfield 1.02 Ice Land 1.5 LIDL 2 SPAR 5 ALDI 5.09 Waitrose 6.36 Marks and Spencer 7.05 Morrison 12 Sainsbury 13 ASDA 13 TESCO 24 It can be observed from the above table that market share of Spar Plc is very low which instigated the company to add new organic grocery section. Apart from that, as per London Chamber of Commerce report, around 41.3% of the consumers in UK are health freak and search for the products that are organic in nature. On the other hand, the market for organic packed grocery product has increased over the past years and this move has been adopted by other retail chain companies (Reddish, 2011). Therefore, it made the Spar Plc to concentrate on the organic product so that they can engage large customer base and generate better income. As per the recent studies, the retail chain like Tesco was able to increase their sales by 10% from organic products and Sainsbury by 4.5%. Therefore, it can be understood if Spar Plc engage them in organic grocery, they can also be able to increase their sales and sustainable market share (Pakroo, 2012). The growing complexity of health and rise of many healt h issues problem, customers prefer to buy the product that positively impact their health. Therefore, the demand for the organic packaged product have risen which made the company to add new section so that they can survive in the market and provide quality products to their customers all around (Morris et al. 2011). Approach, Attitudes and Behavior towards Innovation The growing need of health sustainability has forced the company, Spar Plc to implement new innovation that is organic packaged food product that can last for an average time. The research and development team of the company has found from their research that making innovation in the package can increase their sales. For instance, the Tesco Organic Barn Flakes package last for approx one and half months but if company launches their own organic package then it can store Barn Flakes for almost 2 months (Wilson and McDonald, 2011). Therefore, it can help the company to compete with their major competitors. On the other hand, launching own organic package brand can help in increasing the brand value and equity that can ensure better sales and profit (Smith, 2011). As per the research, the companys own package brand can be effective in safeguarding the food from external threats. External Environment Situations Protective Packaging Functions Mechanical Shock, compressive loads and vibration Compressive strength, vibration and shock absorption Light Transmission (high or low as needed) Biological Factors Resistance Water Absorption and Resistance (high water vapor obstruction) Temperature Thermal Conductivity (low or high as needed) Gases (O, N, CO2) Low permeability (high gas barricade) The company has decided to start their own packaged brand so that ecologically friendly product can be provided to the customers in more protective nature. The organic package of the Spar Plc Company can be easily recycle and on the other hand, company has decided to employ packaging materials in tertiary and secondary packs as they comprises high ratio of recycled materials. The management decided to concentrate build organic package so that they can be known as responsible corporate house towards the society and natural environment (Schoenecker and Cooper, 2010). On the other hand, company can be able to win over other organic food package brands such as Earth bound farm or Exotic Farm. The package brand of Spar Plc is strong and durable enough to safeguard the goods with a rational safety margin. For example, the Spar package can protect peas for 25 days whereas Earth bound package can only protect the peas for 20 days (Spar-international.com, 2015). The management of the company is positive in their behavior to support launching companys own organic package brand. The company decided that the proposed innovation has to be carried in expected manner and has to be different from other packaged brand available in the market. The company engaged all the senior level managers to put their view point towards launching their organic package brand (Augenti, 2010). As a result, the managers supported the move of the company as it can help in building image of the company in global scenario and more number of customers can become aware about the brand. The growing brand war for attracting customers has made company to change their behavior and approach to launch their own brand. Customers, today wants to store the product for longer time and in order to meet such specific requirement of customers, the company can focus on organic package that can help in drawing consumers (Barrow, 2011). Thus, it can improve the market share and assist in expansion. Strategy and implementation Marketing: The Spar Plc has taken decision to promote the organic package brand in order to make the consumer aware about their strategic step. On the other hand, initially, the marketer of the company studies the need of organic packaging and the company that are providing organic packaging service. This helped in knowing the competitors and the impact of their brand on customers (Rhyne, 2009). Moreover, company adopted follow-up marketing programs that can help in increasing the customers by providing them fresh and quality packaged product. Promotion: In order to promote their brand package, the company decided to show a benefit of their brand package on screen in their retail store so that customers can make distinction between Spar Plc brand and other brands (Ware et al. 2012). On the other hand, the company chose social media to advertise their innovation step so that it can reach out to large number of consumers. Sales and Pricing: The Company in order to increase the customer base and sales decided not to charge high price on packaging in comparison to other competitors. This can help in enhancing the package brand image for packaging organic food (Pakroo, 2012). The decision of not charging extra more above the product price came beneficial for the company as it helped in improving the sales percentage. Competitive edge: The decision to start own brand package was taken to gain competitive advantage. Through their brand package, the Spar Plc can be able to maintain the quality of the organic product for long duration as against their competitors. Moreover, company can turn out to be threat for the other company (Smith, 2011). On the other hand, if price charged for the package is less then it will increase the customer traffic. Sales Strategy: In order to satisfy the need of the customers, the company approached to develop own brand of package for storing and packaging the organic product (Wilson and McDonald, 2011). The company delivered the benefit of their package to consumers so that consumers can shift to their organic food products. Sales Forecast: If the company completely focuses on their brand package then company can be able to increase their sales that can benefit the company to have a long term effect. Month Sales ( approx) 1 25000 2 27000 3 30500 4 33000 5 36500 6 40000 7 41000 8 43500 9 45000 10 47500 11 48500 12 50000 Year Sales ( approx) 1 467500 2 518500 3 586000 4 645000 5 696300 Website marketing strategy: This strategy was developed by the company in order to inform the customers about the recent move of the company. The website will provide information about the organic food product that is packaged by the company itself. On the other hand, the customers can be able to know the how long the organic food can be stored in the companys package. Moreover, the consumers can know the number of items that has label of the company. Therefore, this would help in increasing the customer engagement and improving the brand awareness of the company. Apart from that, in order to design specific website, the company hired web design company so that necessary adjustment can be made regarding the brand package in more efficient and attractable manner. Management In order to manage different activities of the company, the top level manager of company decided to segment managers of different segments so that work can be carried in successful way. The company formed different team for handling the new process approach of the company. One of the team members was made responsible for handling daily operations and staffing. On the other hand, one was allocated the job of bookkeeper and administrator whose role is to keep track of payment of taxes, payroll and bookkeeping. On the other hand, for tracking the growth of brand package, company hired one person so that the company can know whether people are interested towards it or not. Personnel Plan Year 1 Year 2 Year 3 Year 4 Year 5 Owners or Managers 49000 49000 53000 56000 56000 Clerks 24500 24500 24500 26300 26300 Accounting or Books 2800 3700 5000 6200 7100 Product Packaging 6800 8200 10200 11600 13400 Total People 5 7 7 9 9 83100 785400 92700 100100 102800 Financial Plan The company expected that in the initial phase of introduction of own brand package; the company may suffer loss as customer may not be aware of their brand package. After some period of time customer can become aware that can lead to increase in sales and profit of the company will also increase. On the other hand, in order to finance their proposal, company can generate cash from banks as a loan for financing their activities. This would help in meeting the need of the company and receiving enough package material for the packaging purpose. Therefore, if the brand package goes successful then the company may able to increase their market cap and customer can prefer buying product that has been packaged by Spar Plc. This would increase the customer mobility and company can generate income that can cover their cost. Break Even Analysis: The Spar Plc has consider the break-even point on the basis of monthly revenue which comprises rent, cost of goods sold, payroll, operating costs, etc. BREAK EVEN ANALYSIS Monthly Revenue Break-even point 33692 Average Variable Cost 60% Determined Monthly Fixed Cost 13477 Forecasted Profit and Loss Month Profit or Loss () 1 (3100) 2 (1600) 3 990 4 1800 5 2600 6 2850 7 3000 8 3250 9 3400 10 3625 11 3800 12 4300 Projected Cash Flow Month Net Cash Flow () Cash Balance () 1 18000 27000 2 21000 26000 3 20000 28000 4 18000 27000 5 16500 30000 6 15500 32500 7 13000 35000 8 11500 36500 9 13000 35000 10 13500 34000 11 12000 36000 12 10000 39000 Projected Balance Sheet PARTICULARS Year 1 Year 2 Year 3 Year 4 Year 5 Current Assets 65970 92563 108500 153000 195500 Long Term Assets 82565 106322 186510 215960 326520 Current Liabilities 19545 31215 33514 35110 31000 Long Term Liabilities 87725 73662 68520 63250 58950 It can be observed from the above tables that company, Spar Plc can gain large benefit from their own brand of packaging in five years. Moreover, the company can be able to increase their sales that can be helpful in increasing the customer attention and generating new customers. On the other hand, the company can give tough competition to other brand package company. Therefore, it can be effective for winning the customer and market share. Conclusion From the whole study, it can be concluded that company can be able to provide better and quality service to the customers in terms of packaging. The launch of new brand package by the company itself can largely benefit the company in context to sales and income and generating better customer base. On the other hand, the rising need of sustainable packaging has made the Spar Plc to develop new packaging that can keep the organic food for long time and fresh. References Augenti, L. (2010) How to Start a Home-Based Personal Trainer Business, 4th ed. London: Palgrave Macmillan. Barney, J. B. 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