Business Plan Models for Sustainable Innovation

Question: Describe about the Business Plan for Models for Sustainable Innovation. Answer: Vision and Mission Statement The first one refers to a dream or a goal that the company aspires to achieve. On the other hand, the mission statement describes the indented strategy and business philosophy for making the companys vision to be real (Dermol, 2012. P.329.) Elcoms statement is leaders in enterprise web content management which distinguishes us from all other firms and conveys all efforts applied by the business to achieve its goals and it provides a strategic direction for the enterprise. Moreover, it enables employees to know and focus on the primary objectives of the organization. Company Overview Elcom began in 1996 where it dealt with the Australian Taxation offices e-tax online platform before it changed to start providing web content management and intranet software. Product or Service Plan The company provides web services which include the provision of administrative tools which allow users to create and manage efficiently contents in the worldwide website. It provides intranet services as well which is a small area private network mostly installed in an organization for the staff to use. These services are influenced by some factors which are listed below Factors affecting Elcoms services External Factors Ramakrishnan, Jones, and Sidorova (2012. P. 490) refers them as elements which originate from the external business environment but have an effect towards the companys production activities and in most times they are beyond the business control. They include changes in technology, economy, demography, political, and legal activities. Technological changes: Improvement in technology improves production of services. For example, the release Version 9.5 of elcomCMS by the company in 2014, has led to accuracy, reliability, easy accessibility and simplicity use of its software (Boons, and Ldeke-Freund, 2013. P.12.) Economic changes: They result to fluctuation of prices in the economy due to changes in interest rates, appreciation, and devaluation of currency. The increase in prices lowers the revenue generated by Elcom because the consumers tend to purchase fewer services to save their incomes to buy other products. Demography changes: Refer to factors which illustrate the changing structure of human populations in a given area. The people in Sydney is said to be more multicultural due to immigrants who raise the demand for Elcoms services. Although the firm may lack employees due to a rapidly aging population who have lower production capabilities (Betts, 2014. P. 16) Political-legal activities: The Australian Consumer Law (ACL) provides rules, policies and regulations regarding contract terms, and rights of the consumer guarantees. Furthermore, there are penalties, registration and the licensing fee which may limit operations of the Elcom Company. Changes in Australias political leadership may form a government which might change the existing policies such as the introduction of product liability regulation law. Internal Factors They result from the immediate business environment. The major factor affecting Elcom Technology Company includes stiff competition from Webcoda, Piran Digital and Web design City Companies in Sydney Gubbi et al. (2013. P. 1652). Other factors may include changes in the management, employment of qualified staff and physical assets, machines and equipment available for the company to work efficiently. Management Plan Elcom Company has a sound master plan comprising qualified management staff. Moreover, it has elconCMS experts who provide upgrading and installation support (Leitch, and Warren, 2015. P. 90.) The company has adequate monitoring preventing controllable disasters, backups, security and compliances such as the PCI and HIPAA. The above activities ensure a perpetual succession of the company because the management is well equipped and structured to prevent the collapse of the business. Marketing Plan The Elcom managers are working hard by the use of marketing technology integration to put up advertisement campaigns especially on the internet for marketing purposes. They use video advertising, multi, and cross-channel marketing as well as paying researchers to collect data for the organization. The CRM software enables this company to manage customer data, merge business, administration and marketing processes which make it easy to navigate inherent challenges associated with web management. However, there are external factors which create a barrier towards marketing activities of the organization. External Factors Affecting Marketing Physical factors: The people living outside cities may not be in a position to know the services offered by the company probably due to slow internet speed. For instance, areas like Monaro region of the New South Wales. This increases costs for Elcom Company to advertise through other media apart from video streaming on the internet. It may be forced to use billboards, TV broadcasting and posters which raise the cost of promotion. Economic factors: Marketing may be influenced by changes in different rates, interest rates and income of the consumers. Economic factors are not fixed in Australia. This makes it difficult to predict and adjust to the fluctuating economy. For example, forecasting consumer spending pattern may turn out to give wrong results. Similarly, the government, through its central bank may participate in influencing the economy, for example, through altering exchange rate and currency valuation to give the required GDP and GNP. Socio-cultural factors: People have different beliefs, tastes, preferences and interests. Due to the existence of other competing services such as the Web Coverage Services (WCS) and Web Map Services (WMS), some people may prefer them unlike those offered by the Elcom Company. This may be due to social standards and class, time, and available resources. These factors may lead to increased cost of marketing to convince the public to purchase the companys services. Technological factors: Are the most favorable for Elcom Company because it is a technology service provider. It uses elcomCMS to perform different tasks on the internet, for example, to provide advertising video streaming on web pages. This forms a suitable medium for conveying information to the users. It generates a very effective method due to flexibility and expertise of the web designers. Financial Plan Elcom has an excellent source of capital arising from the subscribers of the company software such as the elcomCMS for web management. It also gets finance through the installation of intranet to different organizations. However, the biggest issue facing the company is high expenditure on some aspects. For example, advertising, acquisition of assets and general expenses. Current External Trends Affecting Elcoms Financial Plan Ever-changing technology: Since Elcom is a technology service providing company, it has to incur costs in trying to acquire machines and related equipment to keep up with the latest technology. It has to purchase new computers, network routers and update its software to the current versions. Although the process will provide better results, the cost of upgrading is relatively higher. Globalization: Due to the emergence of companies going international, Elcom Technology Company has diversified to the USA where it has a subsidiary branch in San Francisco. This process is likely to generate revenue for the company. However, there may be stiff competition from Tenddo Inc. and Yeti LLC which provides the same services as Elcom (Lee, Hancock, and Hu, 2014.P.90.) The competition may cause fewer customers for the company making it generate possible losses. It, therefore, has to spend much capital on advertising and making the business popular with the Americans to gain clients. If the subsidiary company makes losses, the expenses are incurred to the headquarter company. Unstable Economy: The fluctuation of inflation and interest rates is causing a challenge for the Elcom Company. This occurs because the company does not only deal with Australians, but it also sells its services to the outside world. This means it is transacting trade between different economies with different rates. It may end up spending more due to various legal formalities signed, and during the conversion of currency especially when the foreign country is experiencing inflation. If the economy were stable, the company would not spend such costs saving on its funds. E-commerce: Einav et al. (2014. P.492) defines it as carrying out transactions electronically using the internet. This technology assists Elcom to save time, expand its sale of goods instantly after making a deal with the clients and efficient procurement. However, it causes the company to spend many funds on ensuring that it has employed vendors to bid for the business. Secondly, it has to make sure that there are no fraud or security issues which may lead to loss of their software. E-commerce provides the buyer with numerous sellers. Therefore, the company has to give an attractive deal, for example, giving a discount or lowering prices to capture the attention of the buyers. Such activities decrease the overall revenue of the company causing a financial challenge. International cybercrime: This act is commonly known as hacking. An individual illegally performs an internet-mediated activity in worldwide electronic networks for his or her personal gain. Since Elcom deals with web content management as well as the sale of intranet software, an IT individual may carry out cyber-crime activity and get the companys software free. The hacker may then sell the programs cheaply distorting the market for Elcom Company. The Company, therefore, spends additional capital to prevent leaking and illegal acquisition of their programs to unauthorized persons. More funds are devoted to upgrading to the latest Internet security because as the technology level rises, the higher the chances of cybercrime. Conclusion A business plan is quite essential for an organization because it provides forecasts on sales, marketing, products and financial matters. This paper concludes by offering some of the merits and demerits that the business plan can have for the company. Pros: Attracting Investors: A well-structured business plan will present a good impression on investors who may turn out to be interested in the organization. They will see how much the company has done and what it aspires to do. They will, therefore, participate in providing finance and other inputs for the enterprise to achieve its set objectives which will yield them dividends from their investments. Clarification: It clarifies the mission and vision statement making the employees and the management to work towards achieving it. The managers set objectives and put all necessary measures to see them completed. Otherwise were it not for a business plan, workers would just work to earn wages and salaries without caring for the welfare of the organization. Supporting growth and Development: It aims at providing newer opportunities for the team which makes it grow and develop. The process ensures continuity of the organization which motivates the employees about future job security, and the management is happy about the successful achievement of their plans. Management of Cash Flows: The program shows various ways through which the organization obtains cash from its operating activities and its investments. It also shows how the funds are used, for example, to finance numerous areas to set up more investments. The Medium of Communication: It passes information to various stakeholders describing what the management is intending to do within a given period in future. It serves as a better medium since it keeps a record, and is sent to the concerned group of individuals only. If the plans were announced verbally, it would be too public, and the stakeholders may not capture all information published on the business plan. Strategy for an Exit: At times, an organization reaches the final point in the corporate production stage which is harvest or exit. The business, therefore, will need to prepare a business plan to show its preferred method of exit, for example, going public (Initial public offering), being acquired by the competitors, merging, management buy-outs, family successions, and complete winding up. Cons: Time-consuming: Developing a business plan takes too long since the management has to prepare numerous meetings to discuss the issue. Discouragements: In case the company is drafting a business plan for exiting from the industry, the employees morale will be lowered, and its performance may begin to decline. Uncertainty: Making the plan does not mean the organization will achieve what it plans. It does not give any assure the firm for the success. However, this mainly happens when the management has prepared weak plans which may fail to work or result in insignificant contribution. Recommendation An organization is advised to prepare well-structured business plans for handling strategic plans. They should be well discussed and implemented before they are put into action. Similarly, Elcon Technology should ensure the adoption of all the strategies discussed throughout the business plan. References Betts, K., 2014. The ageing of the Australian population: triumph or disaster? Boons, F. and Ldeke-Freund, F., 2013. Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner Production, 45, pp.9-19. Dermol, V., 2012. Relationship between mission statement and company performance. Annals of the Alexandru Ioan Cuza University-Economics, 59(1), pp.321-336. Einav, L., Levin, J., Popov, I. and Sundaresan, N., 2014. Growth, adoption, and use of mobile E-commerce. The American economic review, 104(5), pp.489-494. Gubbi, J., Buyya, R., Marusic, S. and Palaniswami, M., 2013. Internet of Things (IoT): A vision, architectural elements, and future directions. Future Generation Computer Systems, 29(7), pp.1645-1660. Lee, J.H., Hancock, M.G. and Hu, M.C., 2014. Towards an effective framework for building smart cities: Lessons from Seoul and San Francisco. Technological Forecasting and Social Change, 89, pp.80-99. Leitch, S. and Warren, M., 2015. Applying classification controls to Internet content in Australia. Journal of Information, Communication and Ethics in Society, 13(2), pp.82-97. Ramakrishnan, T., Jones, M.C. and Sidorova, A., 2012. Factors influencing business intelligence (BI) data collection strategies: An empirical investigation. Decision Support Systems, 52(2), pp.486-496. Simn-Moya, V. and Revuelto-Taboada, L., 2016. Revising the predictive capability of business plan quality for new firm survival using qualitative comparative analysis. Journal of Business Research, 69(4), pp.1351-1356.