Business Perspective
Part One
The first franchise offering is the UPS offering. In order to be a business owner, one will need the seed capital to start up the operation. UPS requires that a franchisee to have $167,825 - $535,580 when the franchise is opening in the traditional locations and $139,673 - $254, 562 when the franchise is opening in a non-traditional location as the startup cost (Franchise Direct, n.d.). UPS requires an additional $150,000 as the net worth of the franchisee and $60,000 -$100,000 as the liquidity (Franchise Direct, n.d.). The biggest challenge in starting a business is sourcing the initial capital requirement that is sufficient enough to run the firm until it breaks even (Strauss, 2003). As such, in order to assist individuals to break this barrier, UPS has developed a program through which it funds qualified prospective franchisee. UPS has an in-house fund which it uses to finance qualified franchisees at a cost. Also, the firm uses its reputation to facilitate some of the qualified franchisees if the in-house resources are not available. Therefore, UPS provides a facility that enables people to be business owners without having to raise the amount by themselves regardless of their geographical position.
The second franchise is Subways. Subway franchise startup fee stands at $116,600 – $263, 150 for a business in traditional location and $86,100 – $203,850 in nontraditional places (Franchise Direct, n.d.). Subway has set the net worth requirement of the franchisee as $80,000- $310,000 while the liquid asset requirement has been set at $300,000-$900,000 (Franchise Direct, n.d.). Subway does not offer a financing plan that comprehensively covers the startup costs. Nonetheless, the firm has a program that finances loans the potential franchisee $10,000 if the franchisee is paying for the full price of the franchise. In addition, the firm has a leasing program where the firm evaluates the potential clients and provided the qualified franchisee with a lease on its equipment. The leasing program is only available to potential franchisees that are within the United States. In addition, a subway only offers a true lease but not a financing lease.
Examining further costs that are incurred in operations, operating a UPS franchise seems to be less expensive compared to a Subway franchise. Notable incidence includes advertising costs, royalty costs, the fee charged on unpaid balances when the payment is more than one week old, technology development, insurance and audit. Although there are various components in UPS contacts that are more expensive than Subways, the net effect shows that UPS franchisees are better to operate.
Considering both the costs incurred as the startup costs and the additional costs incurred as the firm operates as a franchise, I would prefer to operate a UPS. Although there may be an advantage in the startup cost due to the lower startup cost in Subway, in the long run, the lower cost from UPS operational cost will outweigh the benefit in the lower starting costs.
Considering the quality of the products that are sold by the two outlets, they maintain a high-quality level. The firms guarantee on quality by ensuring that the employees working in this firms are adequately trained. In addition, the UPS franchise agreement requires the franchise to be under the control of Primary Operator who has undergone Franchisee Training Program (Franchise Direct, n.d.). However, subways require the person in charge of outlet to have undergone their Person in Charge program. However, their roles are similar since they are tasked with the responsibility of ensuring that the restaurants comply with methods, standards, specifications and policies of the franchisor hence preserving the required level of quality. As such, I would consume from either of them.
Part Two
Planning
In this case, the managers are tasked with understanding the spectrum of industries that will most likely need predictive modeling. Ordinarily, all the industries will need data analytics. However, the riskiest will require superior data modeling and advanced analytics in order to manage their risks hence will have a higher demand for such products. Therefore, the firm shall prioritize on developing products that are geared towards these industries with the level of priority declining as risks lower among different industries (Strauss, 2003). The manager prioritizes on industries to target due to a limitation in human capital. The manager has to optimize on the available expertise in order to attain the set goals.
Organizing
Organizing refers to assigning people tasks thus creating the mechanism to work. The firm focus is developing analytic algorithms that are capable of developing predictive analytics using big data. The tasks are undertaken collaboratively between mathematic experts and computer science experts such that the developed algorithms carry out the comprehensive predictive analytics to address the unique needs of various clients. The computer experts will translate the mathematics into a computer language thus enabling the system to function as designed.
Influencing
Most startups are commonly led by the individuals that came up with the unique mathematical algorithms that have the capability to carry out this analytics. Therefore, these individuals lead from the front by showing a good example and exercising expert power (Ries, 2011). Through their determination to success, they positively impact on the employees.
Staffing
The function deals with selectin the most suitable individuals to work in the firm (Katz & Green, 2007). At the beginning, the founders are the only staff in this kind of business. However, as the firm expands, the managers, who are also mostly the founders, recruit from the circle of trusted individuals before they professionalize the organization by recruiting professionals.
Controlling
Controlling refers to gathering performance and therefore comparing the performance to pre-established norms thus determines the next course of action. Therefore, the managers examine the number of business that has adopted their analytic technology and the spread of the industries that they serve. Also, managers compare the revenues that they are generating from each industry thus evaluate whether they should change their business focus (Ries, 2011).
References
Franchise Direct. (n.d.). The UPS Store Franchise Cost & Fee, The UPS Store FDD & Franchise Information | FranchiseDirect.com. Retrieved April 07, 2016, from http://www.franchisedirect.com/mailingshippingfranchises/the-ups-store-franchise-05563/ufoc/
Franchise Direct. (n.d.). Subway Franchise Cost & Fee, Subway FDD & Franchise Information | FranchiseDirect.com. Retrieved April 07, 2016, from http://www.franchisedirect.com/directory/subway/ufoc/915/
Katz, J. A., & Green, R. P. (2007). Entrepreneurial small business. Boston: McGraw-Hill/Irwin.
Ries, E. (2011). The lean startup: How constant innovation creates radically successful businesses. London: Portfolio Penguin.
Strauss, S. D. (2003). The business start-up kit. Chicago: Dearborn Trade.
