Term Paper on "New E-Business Venture"

Term Paper 16 pages (4333 words) Sources: 16

[EXCERPT] . . . .

business plan for Ivy Discover Software Limited. The company is a new business organization dedicated to develop and market software product for businesses, households and government use. The company will be operating under software publishing industry. The industry is one of the most innovative industries in the United States because firms within the industry always engage in R&D to produce high quality product. The company will differentiate itself within the industry by offering high quality products at fair price which will be below the industry price. To reach large percentage of potential customers, the company will employ e-business strategy and will develop an attractive website to launch its e-business, and the company market strategy is by developing high innovative and quality products to beat its competitors.

Introduction

Ivy Discover Software Limited is a new business organization dedicated in designing and manufacturing different software for business organizations and households use. Ivy Discover is established to design custom-made software for organizations tailored to their special requirements. The company will utilize a state-of-art technology and pool of skilled workforce to design the high quality and impressive software products for customers. Ivy Discover is an ambitious and achievable company that will attempt to increase the sales by 35% yearly and maintain the market shares of 15% annually. Ivy Discover will implement aggressive marketing strategy to achieve these business objectives. The company key goals will focus on customer satisfaction, market power, and right management. The company will adhere to these key business objectives to achieve

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business success.

Industry Overview

The industry that Ivy Discover Software will be operating is a software publishing industry. In the United States, Software Publishing industry enjoys a strong growth rate since more businesses are using computer technology to improve efficiency. Since 2000, software industry is enjoying continuous market demand. The revenue generated within the industry is approximately $183 billion and the industry is enjoying the annual growth rate of 4.5%. However, within the industry, there is low level of concentration where four largest companies command about 36.4% of the market shares. Typically, the industry is largely dominated by IBM, Microsoft, Oracle, HP, and Symantec (See Table 1).

Firms within the industry design and manufacture system software and application software. The system software accounts for the 31.6% of the revenue generated by the industry, and this equivalent to approximate $54.8 billion in 2008. The system software is further categorized into operating software, network software, database management software and programming language. In 2008, operating systems software provided $19.3 billion revenue for the industry. However, network software publishing generated $15.4 billion revenue for the industry and database management software provided $10.7 billion revenue, for the industry. The industry also generated about $3.2 billion revenue from the programming languages. (See fig 1).(IBISWorld, 2010).

Fig 1: Revenue Contribution of different Segments within the Software Publishing

Industry

Similarly, application software generated approximately $51.0 billion revenue for the industry in 2008, and these contributions accounted for 34% of the industry revenue. (See Fig 1). Application publishing software is further broken down into home-use applications publishing, utilities application publishing software; cross-industry application publishing, software and other applications publishing software. All these products generate significant revenue for the industry. In 2010, the revenue recorded in the global software industry was $235 billion. Typically, the largest software companies in the world account for the $220 million of industry revenue where Microsoft alone recorded $54.3 billion in 2008. (IBISWorld 2012).

1.2: Industry Growth Rate

Between 2006 and 2008, Software publishing industry enjoyed average annual growth rate of 5.3%. However, between 2009 and 2010, the industry suffered the decline in the growth rate because the industry recorded the -3.5% decline in the growth rate. The major factor leading to the decline in the industry growth rate has been attributed to the global economic crisis that affected many companies during the period. Since business organizations form the major bulk of the market for the software products, the economic crisis that affected many business organizations also affected the software industry. Despite the decline in the industry performance between 2009 and 2010, industry recovered in 2011 and 2012. A market research provided by IBISWorld (2012) reveals that the software publishing industry is recording revenue of $183 billion with annual growth rate of 4.7%. Kooten (2009) also argued that the economic crisis that affected many companies did not affect the top 100 software firms in the industry because virtually all of them enjoyed high growth rate between 2008 and 2009. The author argued that 85% of the top 100 companies in the industry enjoyed high growth rate between 2008 and 2009, and only 15% of the top 100-software publishing recorded a decline in the growth rate during the period. Typically, 32 out of the 100 top firms in the industry could boast of the revenue of more than $1 billion.

Table 1: Top 5 Largest Software Company

Rank

Company

Revenues

1

Microsoft

49,090

2

IBM

21,396

3

Oracle

18,582

4

HP

6,183

5

Symantec

5,565

1.3: Market Segments

Software publishing industry is one of the most dynamic innovative sectors in the United States. The increase in the use of different software for business purpose has contributed to the growth of software publishing industry. The market for the software industry consists of business, government, and households. However, business organization forms the bulk of market for the industry with business accounting for the 82% of industry market (See Fig 2). Business applies for application software and operating software to boost productivity as well as catering for the specific industry need. Most businesses also require software for the protection of business data against unauthorized penetrators

Fig 2: Market Segment for the Industry

Large businesses are increasingly using ERP (Enterprise Resource Planning), database management software and CRM (Customer Relationship Management) to achieve varieties of management objectives. Business demand for computer software has added to the growth of business activity in the United States, which in turn affects the business profitability. For example, information and service sector relatively depend on software to function effectively, and the continuous demand for the software from this sector has an impact on the growth of software publishing industry in the United States.

Households demand also contributes to the 10% of the market demand for the computer software. Many households in the United States have realized the importance of software package for computer protection. Typically, bulk of the software being demanded by households in the United States is anti-virus software packages and computer games. Government demand for software is relatively increasing, and government contributes 8% of overall demand for the software. Declining prices of the computer hardware and computer software has contributed to the overall growth of software publishing industry. Many businesses and households who could not afford to pay computer hardware and software 10 years ago are now able to afford the software package for business and personal purpose. More importantly, many businesses have now realized that information technology (it) has become a potent tool to achieve competitive advantages. Businesses have realized that it is critical to integrate it system to remain in business.

2. Company mission, Goals, and Business strategy

This section discusses company mission, business strategy and business goals. The paper discuses business strategy to achieve the company business goals.

2.1: Company Mission

Ivy Discover Software Limited will design, publish, and market software for the business purpose and households use. The company will make its products accessible to millions of business users who have little experience in the use of the software packages. The company will also establish rewarding environment for employees and fair returns for business owners. The company will provide superior customer support to enhance market advantages.

2.2: Business Goals

The company business goals are as follows:

To achieve company market shares within the first year of operation by 10%

To double the company revenue within 2 years

To become one of the top 100 software publishers within 2 years

To become one of the top 50 software publishers within 5 years

To become one of the top 10 software publishers with 10 years.

To increase the return for investors yearly.

To double the returns paid to investors yearly.

2.2: Business strategy

Ivy Discover Software will employ different business strategies to achieve its business goals. The company will focus on million of home offices and small offices, professional offices and schools. The small office and home office is one fastest growing segment in the United States. The growing need of software in this area will favor our business. The company will employ e-business strategy to reach its potential customers, and the company will categorically focus on Business-to-Business (B2B) to achieve its goals. Globally, the online spending has reached more than $103 billion, and B2B has risen to more than $1.3 trillions. The company will also target adults, male and female with wide range of computer skills. The company will target smart, well educated in small business setting to achieve market advantages. The company will also target business schools and… READ MORE

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Quoted Instructions for "New E-Business Venture" Assignment:

“

This is instruction

Business Plan

The individual assignment is a business plan for the development of a new e-business

venture or for the development of e-business in an existing organisation (which

has no e-business) with which you have some familiarity. Please choose an organisation

that is both interesting but reasonably easy for you to research. If in doubt, consult me.

The chosen venture or organisation may be in any sector of e-business (B2C or B2B or

non-profit). The format of a business plan will be discussed in class. The business plan

will be assessed on three main criteria: content (90% of mark), structure (5% of mark)

and presentation (5% of mark).

Content (90%):

*****¢ Your business plan should provide a clear and compelling description of the online

value proposition offered from the customer perspective. You could provide a

description of the customer experience in buying and using the product/service. You

should explain why the customer gains benefit in buying from the firm as opposed to

any of the possible major competitors.

*****¢ Your business plan should clearly describe which type of business model the business

is (or will be) pursuing.

*****¢ You should imagine your business plan would be read by a busy venture capitalist

with many business plans crossing his/her desk and a limited time to assess them.

*****¢ Your business plan should give some careful discussion of any important risks and

potential downsides.

*****¢ Your business plan should show good use of analytical frameworks and tools

presented in the textbook, lectures and other readings.

*****¢ Your business plan should demonstrate excellent business analysis skills, insight and

creativity.

Structure (5%):

Your business plan structure should:

*****¢ Be divided into sections and sub-sections in a logical and consistent fashion

*****¢ Have a good executive summary

*****¢ Make good use of data, concepts and models in appropriate sections

*****¢ Make appropriate use of appendices and reference material

Presentation (5%):

Your business plan presentation should have:

*****¢ An interesting and distinctive visual style

*****¢ A good use of English ***** it should be readable, interesting and well written

*****¢ Good use of presentational devices such as tables, exhibits and figures where

appropriate

*****¢ Proper page numbering and referencing

Suggested Format for the Business Plan:

The format should be a business plan and should cover the eight key e-business strategic

decisions outlined in chapter 5 of the set text. In addition implementation should also be

discussed.

Title Page

Executive Summary:

This is a summary description of the business plan. It should clearly summarise

the benefits to investing in this company. I suggest 500 words as an absolute

maximum (part of your word count)

Contents Page

1. Introduction:

You should give a description of the company and the industry background. This

might include data as to industry size, growth rate, important strategic groups and

market segments

2. Company mission, goals and business strategy:

You should describe a mixture of goals of interest to investors and to customers.

The business strategy should describe at a high level how you are going to go

about achieving those goals.

3. Industry and business environment background: { you can get some details from ppt lecture

This should include description and critical analysis of any relevant SLEPT factors.

It should also include any relevant industry and competitive analysis (e.g. Porter 5

forces model). You should assess any potential threats and opportunities relative

to competitors. You should make good use of any market research, forecasts, facts

and figures here.

4. Your value proposition:

This should describe what it is that customers will buy from you and why they

should buy it. This should provide a description of your pricing model. This

should explain why your value proposition is distinctive compared to those of

competitors you identified in the earlier section.

5. e-business strategy {you can see the details in ppt slide and website that I provided}

This should cover the eight e-business strategic decisions

# Decision 1

# Decision 2

# Decision 3

# Etc.

6. Implementation and Infrastructure

7. References and appendices (if any):

Use appropriate format and judge carefully what should be in an appendix as

compared to being in the body of the business plan text.

*****

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