Commercial Feasibility of Computer Repair - Case Study Example

COMMERCIAL FEASIBILITY ANALYSIS Name Course Instructor University Date Commercial Feasibility Analysis Coming up with a promising business idea that might transform into a profit-oriented business opportunity is remarkably prosperous. A viable business opportunity offers to a job-creator various kinds of future prospective from amongst which one chooses their best strategies. In this case, an innovator brings forth an idea of repairing computers plus software upgrade and maintenance, which flourishingly takes a new shape; a viable business opportunity. However, in order for any business opportunity such as this to translate into a profit-making business, then it has to undergo some critical analysis basing on the opportunity’s step-by-step processes. This paper analyzes how ‘Computer Repair and Software Maintenance and Upgrade’ as a business opportunity undergoes continuous assessment test to determine its commercial feasibility in relation to its market. Concerning this new business opportunity (Computer Repair and Software Maintenance and Upgrade), it is apparent that determination of its feasibility and viability − in the market place − provides the main yardstick upon which one bases their assumptions, and reasonable conclusions. Categorically, the paper outlines how one establishes market viability, riskiness associated with the computers handling and software diagnosing, and however, business models in promoting the new business opportunity, for example skills and experiences correlating with the very hardware and its software. Most preferably, it is an Australian –based company, which is located beside the Falls Church, Virginia in USA. The company specializes in services related to Information Technology (IT) in respect to the services it renders to its new and potential customers. Market Viability Determination of the market chosen is an essential and critical issue because potential customers identify themselves with the services offered, thus the firm achieves customers’ loyalty, which eventually transform into a constant profitability and solvency levels that may increase in the long-run. Basing on this specific analysis of the market, the following subsections constitute viability of the service market: Potential Demand Regarding to repairing of computers and maintaining software, its market seems to grow at a higher rate since the emergence of a digital World. As a result of increased usage of computers by almost 85 percent of all natives of the World, more than half of computers in possession break down, problems relating to whether hardware or software. Thus, there is a potential demand for repairs or software maintenance. These two vital problems establish our market stability, sustainability and ability in classifying our business opportunity as feasibly viable. Market Approval Our firm’s survival and approval by customers entail not only having in stock wide variety of Operating Systems, such as Windows 7, 8 or XP, but also in possession of hardware spare parts that are compatible and flexible to the customers’ needs and recognition. For instance, customers’ approval goes hand-in-hand with the best work done by computer repairers in terms of having new software (Windows 8), which modernizes the needs, wants of loyal customers as the newest and best Operating System possible in the market. Competitive Strength Offering of a fair and negotiable price for computer hardware and services is a comparative competitive advantage that ensures more potential customers’ loyalty. Basing on this as a strategy, our business offers a fair price in respect to the services provided, and some times, to the extent a customer is able to provide. Resulting to an increased profit is our policy that promotes prioritization of customers’ needs in ensures they derive maximum satisfaction from the services. Risks Availability As new small firms venture into markets, there is a tendency that they face some uncertainties, which may hinder its growth in the future. In respect to our business that provides services, certain risks threaten the perpetual life of a prospective business. However, these risks may either occasion a loss or profit to the growing firm depending on the nature of these risks as follows: Boundary Risks Attributing to the internal environment of a firm is the technological risks associated with maintenance and upgrading of software basing on the new technical expertise. Some customers’ needs entail more of software complexities in which our expertise team tends to use a ‘trial and error’ means of diagnosing software to determine a problem. This is a risky situation for our business to venture in because it widens a clientele base, and brings more gains if the expertise’s trial and error works out. Besides, our business may make some losses if there is a system break down of the entire computer function and they require a new computer instead. This kind of boundary risk makes a firm bound in terms owing to clients’ amount of cash or a new computer. As a result of these processes encompassing analysis of boundary risks, our firm identifies these risks more or less the same as weaknesses that may bring down the firms profitability index if no risk-diluting effects come in. Despite the fact that our firm may have less storage capacity, many more computers pile up in the storage places resulting to a storage jam, which entails losses. This kind of loss arises the moment some customers fail to collect back their hardware, thus deny the business its profits that it need to earn. To add, many new customers cannot entrust our support team with impaired laptops for fear of being unreliable with machines handling. A customer fears that their laptops may break down completely, disappear in respect to misplacement or mishandled by the support team, thus denying the company some benefits it could have derived from these customers. In order to avoid this mistrust, which occasion losses, the company offers door-to-door services to new customers to win their trust in future. Establishment Risks Computer Service Corporation (CSC) is a new, small company that faces some establishment risks that entail planning risk, marketing risk and liquidity risk. For instance, the company faces a risk of having low amount of liquidity if it invests more cash and cash equivalents in purchasing stock, such as monitors, system units, hard disks, and processors. In this case, fewer amounts of cash are available to cater for any emergence that may require costs such as precautionary (Dawas, S. 2013). However, this Australia- based company requires a good planning in terms of delivering to its customers services and repaired computers that constitute usage of less funds; avoiding any levels of bankruptcy. Besides, the risks surrounding the delivery, planning and marketing of computer services make losses provided there is no good management of risks by the company’s managers. Business Model In ensuring, our company provides best services to its potential customers, then the expertise team need to have the necessary and relevant skills and experiences in handling these computers hardware. In our case, our expertise team have a minimum of 4 years experience of programming, diagnosing and proving solutions to software malfunctioning. To add, they have encrypted not less than ten computer programs, which correlate with maintenance of Windows 7. Thus, the company has a capacity to diagnose any problem entailing malfunctioning of Windows 7 or 8. The managerial team is composed of six IT specialists, who have diverse knowledge in any dimension that encompasses software engineering, hardware repairing and management of funds. The management of funds entails keeping proper and correct records of financial statements, which corresponds to the financial transactions taking place in the business. Careful undertaking of these transactions promises the company of higher liquidity and profitability; our company is able to survive and sustains itself during periods of financial stress. In spite of the loyalty of potential customers the company achieves, promotions of our services and products are significant in promoting more sales. The company has a vibrant marketing team consisting of eight intellectuals, who are aware of marketing strategies, such as advertising vis-à-vis the use of celebrity and face-to-face promotions. This team achieves a lot in persuading new customers by offering free after-sales services, for example, free delivery of computers to customers’ disposal. The strategy is at its best because it amasses more sales revenues each time the team launches the advertisement. Preliminary Forecast of the Company in Three Years Year One Year Two Year Three Sales £ 100, 000 £ 120, 000 £ 140, 000 Profitability Index 2.3 2.5 2.7 Cost Structure Hardware £ 15, 000 Software £ 8, 000 Advertisements £ 4, 000 Expertise fee £ 40, 000 Hardware cost £ 15, 600 Software £ 8, 100 Advertisements £ 4, 100 Expertise fee £ 40, 000 Hardware cost £ 15, 800 Software £ 8, 250 Advertisements £ 4, 250 Expertise fee £ 40, 000 Financial Structure Equities £ 180, 000 Debts £ 50, 000 Equities £ 190, 000 Debts £ 45, 000 Equities £ 200, 000 Debts £ 30, 000 Cash Flow Cash and Cash Equivalents £ 5, 000 Cash and Cash Equivalents £ 5, 200 Cash and Cash Equivalents £ 6, 000 Conclusion Our company (CSC) attributes to the needs of almost all customers in Australia because it caters for the needs of both employers and employees. Regarding to the services it provides, the clientele base seem to delight in the work done because they derive maximum level of satisfaction. Basing on our company’s performance, its profile seems prolific in attracting customers to choose our company as their most preferred company. Ranging from our expertise team to managerial team, the company attains high recognition in terms of having employees, who have an outstanding discipline in responding to customers’ queries with much more sublimity. They handle every customer with selfless interest no matter what status a customer has in the society. Thus, it makes attains a higher profitability index at the end of each financial year. However, the business outsources some managers, who are able to curb the effects of risks by accepting some risk, avoiding loss causing risks, transferring to other alternatives, and above all, assuming some minimal risks, whose effects negligibly the liquidity and profitability indexes. Conclusively, Computer Service Company (CSC) public image in the market increases yearly as customers occasionally look forward towards its best services, thus ranking it among the finest companies, which specialize in computers repairing, software upgrade and maintenance. Reference Dawas, S., 2013. Trustworthy Tech Support Companies Offer 100% Guaranteed Computer Repair Services [Online] (updated 15 July. 2013) Available at: [Accessed 22 Aug. 2013]. Read More