EAE 7501 A Entrepreneurship & Innovation
Business concept
Business entrepreneurship refers to setting a new business process and an indication of business enhancement. The start-up approach has been taken regarding the establishment of a bakery in the regional market. The overview of the business idea is establishing a cake and bakery shop and achieving customer satisfaction.
Lean canvas model
The new venture lean canvas model is as follows:
| Problem | Solution | Unique value proposition | Unfair advantage | Customer segments
|
| Supply chain management and communication issues, the threat of new entrants, threats of the competitor bakery shop
|
Communication with stakeholders, following customer feedback, installing digital technology | Healthy cake providing to the customers with zero fat creams and fruit cakes | Zero fat cream and fresh fruit cake is a unique venture that cannot be easily bought or copied | Mainly the young generations, the individuals who are preferred to eat cakes but avoid for healthy measure |
| Key metrics | Channels | |||
| Targeting global market niche, a detailed market research, collecting customer demand | Social media advertisement, brochure for new offers | |||
| Cost structure | Revenue streams | |||
| Financial – 5 million dollars
HRM- 50 skilled employees Social media advertising, legal permission and outlets
|
Gross margin of achieving 7 million dollars within 2 years | |||
Table 1: Lean business canvas for new venture
Go- no go decision
| Go | No go |
| Detailed market research | Investment without consulting with stakeholders |
| Maintain customer demand | Avoiding business risk |
| Social media advertisement | Exceeding the budget |
Table 2: Go- no go decision
Critical evaluation and development of investigation to support the business construction
Market research and development will support the venture. The lean start-up approach is a useful model for starting a new business. It helps in the business enhancement and helps the business entrepreneurs to make the business mission successful (Zulkarnain et al. 2018). Detailed market research and evaluation will help to understand the stakeholder demand and help them to achieve customer satisfaction as well
. Customers and employees are the major internal stakeholders of the company. While making a plan they will be communicated for the evaluation of the lean start-up model. For researching the potential opportunity, in the market customer feedback research will be appropriate. A competitor analysis is also required to understand the market challenges and also work as a market.
In terms of upgrading the market opportunity, communication theory should be applied. It will help the marketers and the business entrepreneurs to establish the new business venture and contribute to the business success. The application of communication theory helps to establish a relationship with the customers and the stakeholders. Communication is a form of rapport establishment, which helps to connect with the stakeholders. The communication strategy can solve the business risk that appears as a market challenge for a new venture.
Figure 1: Business communication theory
(Source: Page et al. 2017)
As per figure 1, with the implementation of appropriate channels the business entrepreneurs and managers, connect to the stakeholders. For this model, the senders are the designer and manager of the bakery project and the receivers are the stakeholders.
The application of the stakeholder model will also help the business venture to communicate with the stakeholders. The stakeholder involves customers, employees, suppliers and competitors of the market (Prodanova et al. 2019). Market research and evaluation is necessary for communicating with the stakeholders. As per the model, customer and employee feedback should have been taken for the business development and improvement in the regional market.
Re-evaluation of the lean canvas model
Background
The company aims to satisfy customers with a unique business venture, which is providing zero fat cream cakes and fresh fruit cakes. Differentiation is one of the marketing strategies that will help the managers to configure the business in the regional market and the global market as well. It aims to deliver customised cakes for customer satisfaction and it is targeting the hath-conscious young generation as its target customers.
Problem or business risk
The risk involves a threat of new entrants in the bakery business. Competitor analysis helps the business managers to mitigate the challenges and identify the risk. The competitors of the new venture include Nestle, Kraft Heinz, Bimbo Foods bakeries, and PepsiCo.
The marketing strategy and the advertising structure followed by the company can be used for new ventures (Achtenhagen et al. 2017). Communication issues are a major issue which hampers the relationship with customers and employees. On the other hand, due to the outbreak of Covid-19 and cross-border issues supply chain challenges may occur to the business.
Solution
In terms of solving the threat of new entrants and competitors, the new venture should include unique features. The management should include a special offer in festive eves to attract the customers. Digital technologies should be used to collect customer data and feedback. It will help to mitigate the communication challenge. The company can make their own website where the cutlers can place their orders and give feedback for the improvement of products and services (Ombi et al. 2018). The establishment of strong logistics and transportation will solve the problem regarding supply chain management.
Unique value proposition
In terms of getting a unique value the new venture is arranging healthy cakes with zero fat creams. It will attract new customers and contribute to customer satisfaction. Fresh fruit cakes will be available in the bakery shop which will help to research the target customers. A unique value proposition is required for the business development for the brand recognition of the company (Ortiz and Huber, 2017). Brand recognition will help in business success and help them to achieve their business goals. Offering a competitive price for the cakes is important to reach the target customers and to enhance the business.
Unfair advantages
Zero fat cream is a unique feature of the business, which is difficult to buy or copy. sIt will contribute to their competitive advantage. The new business venture will recruit skilled chefs to make creams with zero fat. The customised cakes with the favourite fruits of the customers will be designed. Customer satisfaction is important food the brand name of the company (Liu et al. 2017). Customer satisfaction will help the company to extend its business on the global platform.
Customer segments
Target customers are the major segment for the new start-up ventures. It is important to define the geographic demography of the target population (Dunne et al. 2021). Identification of the target customers will make the business venture successful and help them to reach the business goals
. The target customers for this new venture are young generations who are in love with cakes. The generations are becoming health conscious and the ventures are targeting their business suitability. Customised fruitcakes can be a part of their healthy diet and thus the company meet the customer demand.
Key metrics
The key metrics involve reaching the target customer with a new value proposition. The business venture involves designing fruitcakes with the favourite fruits of the customers. It requires customer feedback. The customers can place their orders on their website listing their favourite fruits, which will attract customers to the new business venture. Key metrics involve providing products and services at a competitive price and application of special offers on the festival eve.
Channels
Social media advertising would be the appropriate channel to reach the target market. The business brochure will be provided to the customers for making them informed about the social offers. The customer feedback will be collected from social media and the website of the venture.
Figure 2: The potential of social media advertising
(Source: statista.com, 2022)
As per figure 2, social media is an appropriate channel for making the business venture successful. Identification of the appropriate channel is important as it helps to rhea the target customers and makes the business venture successful (Meza et al. 2017). It is a step forward for the business improvement and sustainability of the business.
Cost structure
Expected turnover- $8000
Costs- $5000
Tax rate- 8%
Estimated profit margin- 23%
Number of outlets- 2
The cost structure of the company and the gross profit margin will help the company to achieve the estimated revenue stream. The cost includes recruiting skilled employees for which the cost will be $2000. Designing the outlets and buying the kitchen equipment will cost $2000 which includes advancements and modulation in the bakery shop. For advertisement purposes, the company will invest $500 and for installing the digital application, they will invest $500.
Revenue stream
The gross profit and the annual turnover of the company is identified as the revenue stream. In terms of preventing business loss and contributing to the business revenue model, the company should make a budget and risk management of the new venture (Sun et al. 2018). It will help them to plan accordingly and provide a detailed structure to establish the plan.
Critical reflection on learning
Critical reflection helps to sum up the learning of course materials and the ideas that have been implemented on the project. I have learned about the importance of business ventures and how to start a new venture. Lean business canvas is important to make the process successful and it contributes to the business enhancement (Durst and Zieba, 2020).
I have learned the application of business ventures and lean business models. It is important to make a planned structure of the model, which contributes to set the business vision. I have applied it to make the business ventures structured and guide my business perspectives. The lean canvas involves the key metrics of the business, which depends on the type and mission of the business.
For the bakery business, I have given importance to the customer chosen for the business expansion. It is related to meeting customer demand in the international market and helps in the business expansion.
In my new business venture, I have given importance to the young generation as my target market. They are important for making the business successful. As per the market research, the customer tends to follow a healthy diet. Hence, by providing zero fat cream I can satisfy the customers and it will lead me to my business sustainability.
Business sustainability is important for business enhancement and to get brand recognition in the regional market (Mahajan and Bose, 2018). It helps to expand the business in the global market as well. I have understood the importance of stakeholders while starting a new venture. Identification of the stakeholder is a key step to make the business venture successful.
For my new business start-up, I have given importance to the customers, employees and competitors. They will guide business improvement and me for my further professional. The major strategy of the business development involves communication with the stakeholders. I will communicate with them by arranging the company website and via social media platforms.
Social media advertisement is an integral part of business development. It helps to reach the target customers and helps to achieve customer satisfaction. I will follow the customer feedback to make customised cakes and it will attract more customers.
I have included an estimated cost structure of the business venture, which will lead me to generate revenue. A major challenge I can face is related to high competition in the business market. In terms of getting a competitive advantage, I have designed the lean model of canvas, which will guide me as a structured business plan. A new business idea helps to achieve a competitive advantage when it can fulfil the customer demand (Oudah et al. 2018). Competitive advantage is required to earn more revenue and leads to productivity and profitability of the business.
I have made a go and no go decision, which will guide me in my business development principles. I have written the step for succeeding in my business ventures and which will contribute to my business sustainability. The business mission is to provide unique and satisfactory services to the customers (Lee and Hu, 2018).
I will consider the feedback from the employees for business development. It will help to retain them for the company. The overall planning of the business venture will helps m to collect the revenue from the gross profit of the business.
References
Achtenhagen, L., Ekberg, S. and Melander, A., 2017. Fostering growth through business development: Core activities and challenges for micro-firm entrepreneurs. Journal of Management & Organization, 23(2), pp.167-185.
Dunne, T.C., Toyoshima, K. and Byrd, M., 2021. Small Business Development Centers and Rural Entrepreneurial Development Strategies: Are We Doing Enough for Rural America?. Journal of Small Business Strategy, 31(4), pp.57-63.
Durst, S. and Zieba, M., 2020. Knowledge risks inherent in business sustainability. Journal of cleaner production, 251, p.119670.
Lee, Y.M. and Hu, J.L., 2018. Integrated approaches for business sustainability: The perspective of corporate social responsibility. Sustainability, 10(7), p.2318.
Liu, S., Cheng, I. and Cheung, L., 2017. The roles of formal and informal institutions in small tourism business development in rural areas of South China. Sustainability, 9(7), p.1194.
Mahajan, R. and Bose, M., 2018. Business sustainability: Exploring the meaning and significance. IMI Konnect, 7(2), pp.8-13.
Meza-Ruiz, I.D., Rocha-Lona, L., del Rocío Soto-Flores, M., Garza-Reyes, J.A., Kumar, V. and Lopez-Torres, G.C., 2017. Measuring business sustainability maturity-levels and best practices. Procedia Manufacturing, 11, pp.751-759.
Ombi, N., Ambad, S.N.A. and Bujang, I., 2018. The effect of business development services on small medium enterprises (SMEs) performance. International Journal of Academic Research in Business and Social Sciences, 8(3), pp.117-130.
Ortiz, D. and Huber-Heim, K., 2017. From information to empowerment: Teaching sustainable business development by enabling an experiential and participatory problem-solving process in the classroom. The international journal of management education, 15(2), pp.318-331.
Oudah, M., Jabeen, F. and Dixon, C., 2018. Determinants linked to family business sustainability in the UAE: An AHP approach. Sustainability, 10(1), p.246.
Page, S.J., Hartwell, H., Johns, N., Fyall, A., Ladkin, A. and Hemingway, A., 2017. Case study: Wellness, tourism and small business development in a UK coastal resort: Public engagement in practice. Tourism Management, 60, pp.466-477.
Prodanova, N.A., Savina, N.V., Kevorkova, Z., Korshunova, L.N. and Bochkareva, N., 2019. Organizational and methodological support of corporate self-assessment procedure as a basis for sustainable business development. Entrepreneurship and Sustainability Issues, 7(2), p.1136.
Sun, J., Wu, S. and Yang, K., 2018. An ecosystemic framework for business sustainability. Business Horizons, 61(1), pp.59-72.
Zulkarnain, A., Wahyuningtias, D. and Putranto, T.S., 2018, March. Analysis of IFE, EFE and QSPM matrix on business development strategy. In IOP Conference Series: Earth and Environmental Science (Vol. 126, No. 1, p. 012062). IOP Publishing.
Website
statista.com, 2022. About us: The Potential of Social Media Advertising Available at: https://www.statista.com/chart/12684/potential-of-social-media-advertising/ [Accessed on: 2nd May, 2022]
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