The Process of Industry Evaluation - Assignment Example

Business Plan questions Name Institution Part A Ethics in Business Business ethics can be termed as the proper business policies and norms that regard to issues such as corporate social responsibility, bribery and corruption, corporate governance and discrimination. Ethics in business form a basis for business operation and acceptance. Ethics in business ensure that an organisation forms a high level of trust with its customers and stakeholders. Implementation of business ethics entails the communication of policies and guidelines to ensure all stakeholders understand their ethical roles. Ethics in business may entail a code of conduct that lays out a company’s expectations for appropriate workplace behavior. Effective implementation of such code would indicate a fundamental step in institution of an inclusive and ethical culture in the workplace. Business ethics protect the workplace environment and inform the stakeholders of the company’s expectations thus contributing to its success. Companies require acceptable and clear moral and ethical foundation in order to succeed. Therefore, it is desirable to create a recipe for ethical behaviour among the employees based on commitment to moral norms and values. Ethics is directed to employees as a guide to choosing what is right and what is wrong in a particular situation. For instance, in many companies, it is considered unethical to receive bribe from customers or stakeholders. Anybody doing this is considered to break the ethical code. Why New Ventures Fail There are a number of reasons why new venture fail. One reason why new companies fail is due to lack of market knowledge. The first year of business operation with limited understanding of the market results to failure. When an entrepreneur does not understand the specific market factors such as target customers, competitors, market price, and customer preference, the likelihood of failing is high. Many people start new venture with limited market knowledge that has contributed to large number of failed start-ups. Another reason why new ventures fail is failure to develop effective business plan and model. It is important for an entrepreneur to be sure that there is adequate market for his offerings. A business plan should include all components required for business success. It should be based on market research and analysis. The lack of operational business plan results in business’ failure. Lack of enough financial resources also contributes to business failure. Before starting a new venture, an entrepreneur should ensure he or she has enough capital required for running the business. Another reason why new ventures fail is lack of experience. New start-ups are faced with many challenges. To solve them, an entrepreneur is required to find a solution for these problems. However, this is impossible without technical skills and expertise in the knowledge area. Economic factors also contribute to business failure. The Process of Industry Evaluation Industry evaluation involves the study of a particular market in which a firm wants to offer its products and services to. The process of industry evaluation involves an extensive analysis of competition, legal factors, customer satisfaction and preferences and socioeconomic variables. Luckily, there are a number of sources where companies can get market information. The process of industry evaluation involves analysis of secondary research. Secondary research can be retrieved from companies like Forrester Research and Nielsen. Data is collected from secondary sources that involve key industry’s information like key competitor’s and market favorability etc. The process of industry evaluation may involve using primary research methods. Companies can use survey method to determine the condition of a market. Industry survey is able to educate an entrepreneur about the availability of a market gap and customers’ response to new products. The process of industry evaluation can also include customer profiles. This information is attained from demographic information including age, income and gender. For instance, when an entrepreneur wants to enter a new market, it is advisable to conduct market evaluation. There are several questions that this entrepreneur needs to ask; what is the size of the market? How many competitors are available? Is there potential for the market to respond well the new products? The Legal Forms of Organisation Structure Different organisations have established organisational structures that suit their expectations. An example of organisation structure is functional organisational structure. Firms with this type of structure are organised into functional divisions such as finance, informational technology, production and human resource etc. Each division works separately and has a functional manager who allocates the work and monitors progress. This structure is faced with the challenge of communication and collaboration. Another organisation structure is Matrix organisational structure which emphasizes on shared control. It is considered the hybrid of functional and divisional structures. The project manager share tasks with different functional managers such as assigning priorities. However, the functional leaders have the final say when it comes to project decisions. It is nevertheless faced with the challenge of power struggle is an organisation can have dual management under this structure. Divisional organisational structure allows an organisation to be split into self-reliant units on the basis of location. This structure is mostly used by large companies that have worldwide operation. For instance, Coca-Cola Company is divided divisionally into units found in different countries that handle their operations separately. Part B Why EMIS Failed One reason for the failure of EMIS was its inability to finance its sales. The company focussed on the manufacture of software that required installation on electronic equipment that needed to be purchased. This increased their expenditure and made it had for the company to sell its products. Equipment financing and storage took toil on EMIS. The company could not finance its research and development and workforce due to lack of financial abilities. There were a number of solutions suggested to solve this issue. For instance, there was a suggested for the company to form strategic alliance with a large retailer which was interested in taking on the work of selling EMIS equipment. This suggested solution would have been effective in eliminating financial challenges. The second solution suggested to solve the financial challenges was for different countries and EMIS to institute a distribution company to deal with the issue of product distribution. This suggested would have allowed the company retain its power in the research and development but also control the sales of its products. Catalan business group also offered to invest in EMIS to assist minimize financial challenges. However, the company did not implement any suggested solutions for their financial challenge. The refusal of these solutions can be attributed to poor management. Partners of the companies refused to transfer shares and the owner did not want to give away control of the company. While this is logical, it is unreasonable to refuse the opportunities that can change the company given the adversity of the financial challenge. The decision made by partners to reject foreign contribution was unreasonable since the only option that remained for EMIS was to sell its assets. The management was divided and could not take the company forward. In addition, another reason for EMIS failure is economic problems. The economic situation was not favourable to its operation which led to the company temporarily halts its research activities. The economic situation made it hard for EMIS to recover from financial challenges. What would you recommend now? Strategic alliance could have been an excellent strategy to solve financial challenges. Strategic alliances are very important in organisations as they provide a valuable and effective means of carrying out business co-operatively without autonomy. A strategic alliance will ensure that the two companies pursue their set objectives but still remaining independent organisations. In forming a strategic alliance, there is no need to have a contract or agreements bounded by law. It is usually easier to get in or out as a result of lack of combined legal structure. As a result of being quicker and easy to set-up, it is possible to get results quicker. Therefore, EMIS should think of forming this alliance to eliminate its issues as soon as possible. Forming an alliance with a major retailer will relieve the company of distributing and selling its products. The money spent within the sales department would be used in other important activities. The reason for the financial problem of EMIS was its inability to manage cash flow. Companies that keep a close eye on its financial activities are able to overcome financial challenges. Therefore, to prevent future financial crisis, the company should never be short on cash. While this might seem impossible, keeping an eye on sales can ensure fast detection of cash flow problems. As evident from the case study, the EMIS was faced with management problem. The management was divided and incapable of driving success. Therefore, the company should come up with ways to improve its management. For instance, EMIS should offer regular training to its managers to improve their leadership skills. They should be offered guidance on the company’s policies and procedures. The company should review its organisation structure and make changes where necessary in order to improve cooperation between senior managers. EMIS should also be open to the possibility of foreign investors. For the company to survive its problem, it will need to accept assistance from external body by being ready to transfer shares. Read More