Business proposal checklist
Amy.
Amy, in her business proposal, describes a company called Will Bury that has patented a technology that would convert the printed word to a digital file for consumption by readers or listeners. Therefore, from her explanation Amy was able to identify the market structure for her proposed business proposal. She was also able to make assumptions about the market structure and elasticity as Amy details the companies already in existence within the same e-books market. She also explains how the business is established, and the competition it faces since alternatives are provided by its competitors and would have a negative impact on the business.
Amy also mentions how the business intends to increase revenue, and this is through increasing the number of titles available and also increasing the rate at which titles are digitized. The chosen methods to determine the profit-maximizing quantity was by identifying the marginal costs and ensuring that it equals marginal revenue. Thus, she was able to detail this by the use of concepts.
The Suggested mix of pricing and non-pricing would be based on the quantity of books he sells, both the copyrighted ones and the free ones. Thus, Amy proposes that the copyrighted books be sold at higher prices, and pricing is also depended on the staff that helps in digitizing the books. He selected barrier to entry is also mentioned and is characterized by the many companies that are established and already dealing with e-books thus the company was to use advertising in order to differentiate their products within the market. The proposal also explains the methods chosen to decrease costs of the product, and this was through creating a patented method of digitizing the books that was cheaper since Will Bury would not have to purchase digital rights from publisher.
Marie, in the business proposal, identified the market structure as an e-book based market whereby the company deals with Will Bury deals with digitizing books. There were also assumptions made about the market structure and elasticity, and this was by use of elasticity demand formula and calculations that the business would apply in order to have gains at the end. Thus, Marie was able to explain that the revenue would be increased by the company if they reduced their prices for the e-books that are free and increasing prices of e-books that are copyrighted. The chosen methods to determine the profit-maximizing quantity would be by adding more employees to help with digitizing the books and also the advantage that he has been working individually for the past six months, he will be able to make profits. Bury would also collect data to find the marginal cost, and marginal revenue thus it would be able to provide the profit maximization. The suggested mix of pricing and non-pricing is that Bury sets his prices to be similar to those offered by his competitors and also make an easy and friendly site for his customers. Therefore, more customers would be able to visit Bury’s online site since it is easy to use.
Competition was the main negative force on the business, but since he intends to patent his technology the business would be a strong force in the e-book market, especially when it comes to acting as a barrier to new competition. Furthermore, Bury can be able to charge large companies for the use of his technologies thus it would be a profitable venture. To increase product differentiation, Bury will use logos and also advertise his technology as different and easy to use. The only shortcoming of this proposal was that Marie did not identify in detail how the business will reduce the costs of the product based on the fact that it would be expensive when producing it.
