Case Study on "New Venture Opportunity Recognition"

Case Study 4 pages (1272 words) Sources: 3

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New Venture Opportunity Recognition

New venture opportunities can always be risky because we cannot predict the future. However, we can always plan for new ventures as best we can in order to determine which ones are worthy of moving forward with and which ventures should not be pursued. Of the ten new ventures presented, two stand out as opportunities worth pursuing. Although neither may not appear to be one hundred percent ready to take off, with further development they are worth the recognition and investment.

The two ventures chosen are Plunar, Inc. And USuggest, LLC. Plunar will be discussed first. This venture was chosen because it is proprietary. Cloud computing is still a fairly new concept and now is the prime time for companies to claim their share of this new and growing technology. The company is focusing on this collaboration software to suit a project management environment, but states that it is adaptable to any industry.

The addressable market for this type of business venture, according to Plunar, is $1.5 billion. The company expects the market to grow to $470 million of this within five years. The initial startup investment is $500,000. Plunar's five-year financials predict that the company will grow from $96 million during the first year, to almost $55 million by the fifth year of operations. Although their marketing plan states that they will seek another round of financing for beta-testing, this venture appears to be a good one financially. The business venture does not expect to show a profit until the third year of business and which is typical.

The potential market for Plunar is extremely large. Project ma

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nagement is the intended target that the software will be tailored to, but as mentioned before the software is adaptable. This adaptability could lead to even larger profits after the five-year mark if the company decides to begin to focus on different industries. Since the company appears to invest heavily in R&D, the chances of steady growth look promising. New and existing companies must remember that R&D is an integral part of doing business and they must keep their research focused on their target market (Rooij, 2008).

The recommendation for Plunar, Inc. would be to maybe target more than one industry at the onset. Since the software is industry adaptable, focusing on more than one specific industry could increase the chances of higher profitability in a decreased amount of time. Investors seek to recoup their initial capital in the shortest amount of time and targeting more than one industry may be a way to do this. Also, Plunar and other cloud computing companies should be aware that this type of technology does not always save the customer money and there may be customer concerns that this type of technology might put their sensitive data at risk (Wenzel, 2011). These are two areas that Plunar needs to take into consideration.

USuggest, LLC was chosen because of its social networking capabilities. Not only is it a site for people to connect, sales and profits can be made from these connections. Once eBay hit the online shopping market, it seems as though similar sites paled in comparison. USuggest, LLC is different because it will be similar to Facebook and eBay all rolled into one. Also, online shopping is something that will probably never grow old, but better.

USuggest is proprietary in that it is combining social network and shopping into one site. It should permit a long head start against competitors, because there actually are no known competitors. There are several popular social networking websites and an abundance of shopping websites, but there is nothing out there similar to what USuggest is developing. The assumption is that people will consider friend's suggestions on what to buy because they trust their opinion. According to the company's financial statement,… READ MORE

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Quoted Instructions for "New Venture Opportunity Recognition" Assignment:

“

New Venture Opportunity Selection ***** Ten Ventures

You are the Head of a New Venture Corporate Development group within your enterprise. You are in charged with the mission of discovering and exploring new opportunities that will increase the financial return of your enterprise. Assume that all the proposals you are going to evaluate represent external deals that will enrich the ecosystem of your core business in a significant way ***** but are not direct extensions of your business. Your job is to:

1. Review the 10 business opportunities presented (attached) and select the top two you consider worthy of further development. For this analysis use the Feasibility Criteria Approach to gain insight of the viability of the venture.

2. Based on your an*****s, select the two ventures that are valuable for further development and what three recommendations would you make to the venture*****s management team to make their ventures more viable and doable?

Assignment:

1. Choose a winner and a runner-up

2. Explain how you made your choice

*****

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1. New Venture Opportunity Recognition. A1-TermPaper.com. https://www.a1-termpaper.com/topics/essay/new-venture-opportunity-recognition/57902. Published 2012. Accessed September 28, 2024.