Business Plan
Introduction
In the modern business environment any business whether a start-up or an existing business develops a plan to enhance the achievement of a competitive advantage and success in the market. As such, there are several factors that determine the success of a new or existing business, which can easily be referred to as the determinants of business success. It is essential to note that such determinants originate from within an organization and from external environment, which work together in determining the level of business success and competitiveness in an industry. The factors that are are not within the control of an organization are referred to as external factors (Shaikh 4). Notably, these have the most influence on bushiness success and organizational managers can only mitigate the risks posed by the same to business success.
On the other hand, the factors within an organization can be controlled to favour the success of an organization. However, both external and internal factors are important in the achievement of a business success and competitiveness. For this reason, it is imperative that business promoters determine the particular internal and external factors that are likely to affect their business or lead it to more success. When entreprenuers develop business plans for either an existing or a start up business, they have to consider the internal and external environment before starting and during the day to day operations of a business.
Description of Business External Environment
An organization’s external environment compromises of all the factors outside a company that influences its ability to function or realize its primary and secondary objectives such profit making. The external business environment is particularly crucial in organizational management since the ability of a company to overcome challenges in such an environment dictates its success. Some of the main factors in this environment are the company’s customers, the government, competition, economy, demographics, socio-cultural factors as well as the public opinion about the company and its products.
Most of these factors are exceedingly difficult to manipulate for a business to make them favorable for its success, although some are manageable. For example, marketing and public relations activities aim at shaping the public opinion about a company’s product so that more people subscribe to such an organization’s product. At the same time, through corporate governance, companies have been able to establish an enabling external environment as far as individual factors like government and communities surrounding a company are concerned (Tansey 53). Some factors in the external environment such as industry competition and the conditions prevailing in an economy should be understood with clarity before enforcing a business idea because a business cannot do anything about them.
For instance, in various industries start-ups are restricted from growing to their full potential due to the presence of large companies and in some cases multinationals whose economies of scales enable them to offer products at lower prices. Harsh economic conditions, on the other hand, affect the availability of capital for start-ups and reduced purcahsing power to guarantee the availability of customers for a business. As such, it is imperative to consider the external environment as a whole to ensure the success of a business idea. The success of a business is dependent on the effectiveness of its analysis of the factors and how they affect the business in different ways.
Impact of Demographics & Generational Change
The term demographic is used to refer to traits in a population that business management use in designing their products or in the determination of the consumption behavior of the overall population. A population can be divided into various sections by its age composition, different income groups, and the difference in geographical location. As such, these demographic variables have a significant influence on a business policy-making and performance in general (Lee 72). For example, the difference in income groups in a population forces companies to design products that appeal to all income groups. At the same time, it affects a company’s pricing policies.
For example, low income groups favor price discounts. On the issue of age age, a company has to identify the dominant age in a population to offer a certain product. Notably, with the growth of the number of youth in the population, it is imperative that the company design products that appeal to the young people. Some products that can be considered in this case include technology goods like cell phones, video games and other forms of youth entertainment. The business should scan the population to determine the best age to target. This will be motivated by the dominance of an age group in the given population. It is essential to note that there is a close relationship between the age variable in demographics and generational change. Most societies around the world have experienced a sharp rise in the youth population, wich has bypassed the older population (Lee 9). The generational change has had a good effect on business development and strategy formulation. For example, a company has to design its product in such a way that it remains favorable with the rise in the youth population.
Impact of Technology & Globalization
Technology and globalization are some of the trends in the business environment that have revolutionized the way people handle various business activities. While technology refers to the technical know-how of conducting various economic activities, globalization is the liberalization of trade to enable companies operate on a global scale. Notably, these are the components of the external environment of a company and can be manipulated to its advantage. Specifically, technology affects a company by whether it is able to cope with changes in technology applied in its industry or afford it all the same. For example, it is imperative that the company can use computers to keep records as well as internet-based methods of communication. As a result, this enhances its efficiency and overall competitiveness in the industry (Cahoy 54). Modern technology in business management helps reduce business cost, which contributes significantly to business success. As such, it is imperative that a startup employs advanced technology in managing various activities.
Globalization impacts different organizations operating in different industries differently. To begin with, it offers new market opportunities that new businesses can exploit and this has been made easier and efficient with the advent of internet marketing. In the case, that business has no sufficient capital, and there is lack of the same locally, globalization has enabled startups to seek capital investment abroad. As such, this provides enough capital for business development and growth, which helps small businesses overcome the capital constraints that usually limit their growth. Globalization expands the target market for a company and with the increase in speed of generational change, globalization can ensure the survival of the company if it decides to offer products for the older population (Tansey 46). However, it is vital to note that globalization comes with competition from international firms and this can be detrimental to the growth of a small business.
Impact of Changing Trends
Particularly, the main trends that pertain to our business are the rise in youth population and increase in the liberalization of trade. The company’s product (Cell Phone) has recorded high sales volumes over the last few years due to the rise in the youth population who favor the use of mobile phone technology. With this trend promising to rise, the business expects to take advantage of the same in developing new and innovative mobile technologies to meet the needs of the young population. Liberalization of trade has however provided countering challenges to the growth of the business and the sales volume to be specific (Calopa, Horvat and Lalic 32). Further, it is essential to note that liberalization has come with increased proliferation of cheap mobile phone and cell phone accessories specifically from the Chinese industries.
The company will mitigate this problem by focusing on the production and design of quality products that match the specific needs of its consumers. Political changes are also a trend that is expected to impact on the bushiness. Specifically, with the change in government regime, it is expected there will be policy changes concerning importation and exportation of products (Calopa, Horvat and Lalic 29). As such, this might favor the company if there are restrictive policies on the importation of cheap mobile phones from Chinese industries.
Most companies have taken up various technological tools to facilitate marketing, which is one of the primary business functions. Our company will use social media platforms such as Facebook, Twitter among others to promote its products and in launching new products. As such, this will pose a unique advantage to the company’s marketing activities since the target market is the youth who are the primary users of social media platforms. In internal and external business communications, the company will use Internet-based platforms such as emails, teleconferencing, and internal communication lines, which will help the company cut its cost of operations.
For instance, teleconferencing reduces travelling costs. However, it has been determined that certain trends and transformations in technology could pose a risk to the marketing function. For example, there could be changes in the number of social media users in the future of a decline in the users of Facebook and Twitter, which are the main platforms the company intends to use to market its products (Calopa, Horvat and Lalic 31). With this expectation, the company will continuously scan the external environment to determine the most favorable method of product promotion among the youth.
Ethical Issues in Business Planning
In the process of business planning, there were various ethical issues worth highlighting. To begin with was the issue of negligence with regards to the responsibility of the company to the society. This was ignored to save funds which as it standards are still a constraint for the business. Another ethical issue that arose was discrimination in employment in that most of the company’s management, and staffs are from one ethnic background. It would be imperative if the company can solve these issues as it grows to gain more support from important stakeholders and the public. Further, the company has to consider compliance with various regualations that affect a buisiness. In numerous cases, business fail to comply with the regulations or attempt to circumvent the regulations such as concealing income to reduce the tax burden (Cahoy 26). In some other cases, businesses fail to obtain the required permits, which afterwards affect the operations and sustainability of the business. As such, the bsuiness will ensure compliance with the required laws and regulations.
Works Cited
Cahoy, D.R. The Changing Face of US Patent Law and Its Impact on Business Strategy. New York: Edward Elgar Publishing, 2013. Print .
Calopa, Marina Klacmer , Jelena Horvat and Maja Lalic. "ANALYSIS OF FINANCING SOURCES FOR START-UP COMPANIES." Management (2014): 19-44. Web.
Lee, In. Trends in E-Business, E-Services, and E-Commerce: Impact of Technology on Goods, Services, and Business Transactions: Impact of Technology on Goods, Services, and Business Transactions. London: IGI Global, 2013.
Shaikh, Saleem . Business Environment, 2/E. New Delhi: Pearson Education India, 2010. Print.
Tansey, Stephen D. Business, Information Technology and Society. London: Psychology Press, 2003. Print .
