The term innovation can be defined as the process, procedure, services and products which are creative and new to the world, and are targeted to accomplish different requirements and needs of individuals. In the context of business world, the significance of innovation enhances up to a significant level as it leads to provide a differentiated identity to the organization among its competitors.
About the Digital innovation:
The digital innovation on which, the business idea and plan will be generated is an E-database and Online selling and purchasing platform for buyers and sellers of second hand and used commodities. This innovation will be an online service for the customers, with the help of which, they can easily sell their unused commodities, such as mobile phones, television, other electronic equipments, automobile and other household equipments. Moreover, this database also helps the buyers to purchase second hand and used equipments at reasonable prices. In this way, the proposed innovative service will be helpful in providing a specific platform for the meeting of sellers and buyers of used commodities (Woessner, 2011).
For availing the benefits of this innovative digital service, the customer is required to get registered on the e-database. After this, he can either post the advertisement of his used products for reselling or sell this product to the company directly at negotiated prices. In the same manner, buyer, who is interested to purchase the commodity, can either contact to seller or he can also purchase this commodity from the company. In this way, this innovative service will be helpful for the sellers and buyers in saving their time and efforts of selling and purchasing used products at reasonable rates.
Existing consumer problems solved by the digital innovation:
The presented digital innovation can be proved quite helpful and effective for consumers as it will solve their problems for disposing the old household, electronic, and automobile equipments at their desired prices. In this context, people generally cannot be able to find the buyers of their used products due to which they cannot be able to have adequate value of their used products. In the same manner, such kind of issues is also faced by buyers also, who are willing to purchase the product but cannot afford the new products. They require used and second hand products at reasonable prices and good condition. In this context, there is a no any specific platform on which, seller and buyers of second hand products can be met and accomplish their needs. Along with this, the digital innovation presented will also be helpful for sellers to have a number of different customers for the products, which directly helps them to get the best prices of his products.
Along with this from the perspective of the buyers also, the prime problem faced is related to the quality and conditions of the used commodity, which is going to be purchased. The digital and innovative database will be helpful for buyers to explore a wide range of options in second hand commodities too, which helps them to compare and negotiate on the basis of quality and condition of the commodity. Along with this, the proposed E-database also will be acts as a unified buyers and sellers of used products and commodities. In other words, sellers can also sell their used products directly to the E-database and buyers can also purchase commodities directly from the e-database. In this way, it can be considered that the presented digital innovative services can be proved quite effective and fruitful for the both sellers and buyers of second hand commodities to save time and efforts in find the right value of the second hand and used products.
For the presented e-database services, limited competition is available. There are only limited numbers of website which are providing such kind of services to customers. Although, there are a number of different websites available, such as Amazon and Alibaba.com which provide digital platform for the meeting of sellers and buyers, but they provide services for new products only (Plunkett Research Ltd, 2008). The proposed e-database will be different from such services as consumers can sell or purchase their second hand and used commodities through such services. In addition to this, along with providing a platform for sellers and buyers meeting, the e-database will also act as the seller and buyers of used commodities, which will also save the efforts of sellers and buyers in finding the best valued products.
Customer and market information:
The prime customers of the proposed E-database services will be common and middle class household and business people, who are planning to sell their old and used commodities. For the purpose of compelling people for availing services of E-database, the middle income group people will be focused who cannot afford highly expensive commodities. For attracting more customers and retaining them, the low degree cost and prices of the used products will be proved an effective aspect and requirement. The easy availability of the products, low cost purchasing, and easy handling of the process will be some of the crucial aspects and positive factors associated with the innovation which will attract more customers for the innovation.
Problems and Drawbacks of the innovation:
Although, there are a number of different positive aspects of the proposed innovative Service plans, yet still there are several critical aspects which can provide some critical Drawbacks and issues. For instance, first and foremost issue related to innovation is the acceptability of the innovation in the market. The business idea generated is one of the most innovative and new concepts the success of which in the market place is quite uncertain. Along with this, for the purpose of commercialize this business idea, it is essential to procure some intensive amount of funds and technological resources, which is not an easy task for the new company to arrange such intensive amount of sources. In addition to this, in order to undertake this business idea in the most effective manner, there is a need of having skilled and experienced man power in starting. Recruitment of skilled employees and gaining the trust of customers can be seen as one of the core problems of the innovation. For the purpose of maintaining such highly automatic and vast database, there is a need of highly expensive and responsive server, which can be considered as one of the most critical aspects and drawback of the innovative ideas.
The future of your innovation:
The innovation proposed will have a bright future as this idea will be proved helpful in exploring opportunities prevailing in the industry. The innovation planned will be proved quite helpful in resolving various issues faced by people regarding disposal of their old commodities. In regard to this, it is expected that people will adopt this service easily as this service will be fruitful for them to retrieve pure and maximized value of their used products. In addition to this in future also, the company will also expand itself in selling and purchasing of old commodities so that overall profits can be maximized up to a significant level (Plunkett Research Ltd, 2008). Initially, the company will have only online presence, but in future the company will have a retail outlet in the city, where customers can visit and sell, as well as, purchase required equipment.
Measurement of the success of the initiatives:
The success of the planned initiative will be evaluated through benchmarking method. In this method, the success and failure of an initiative will be measured with the help of specific measurement criteria. For instance in order to evaluate the success of the initiative, number of total registration has been taken into account as the evaluation criteria. A specific number of registrations will be taken as benchmarked figure for evaluating the success. The actual numbers of registrations in the database during specific months will be recorded (Stair and Reynolds, 2013). The evaluation of the success and failure will be done with the help of comparative analysis of the actual and benchmarked number of total registration within E-database in a specific time period.
There are several companies in the international market that are seeking to implement and electronic platform through which they can provide the services of buying and selling of the new commodities or products (Andersen, et al 2003). In the same series, Digi.com will also a new company that is seeking to have implementation of the new electronic platform for providing buying and selling facilities to local as well as global customers through which it can facilitate them to sell their products to the company and the company itself will sell the products to the buyers on the price determined by the sellers for selling. All the operational functions will be dealt by the company itself. The further description related to the company are provided in the following discussion.
The company will deal in online and mobile selling industry through the developments of its portals. There are several new companies that are dealing in this industry which provides customers wider range of facilities for buying and selling different kinds of old commodities (Plunkett Research Ltd, 2008). Though there is not much and tough competition in this industry as this is a new emerged industry where there are not larger numbers of players which can pose a keen competition for its business. This industry has been becoming a centre of attraction for the global customers as it is providing new kinds of services for the consumers which they could not avail before emergence of this industry.
Key Products/Services of Company:
The company will deal in wider range of products and services to have a strong and good business position in the international market. The company will provide both buying and selling services to the consumers. The services of the company will be quite differentiated from the existing companies which are providing online buying and selling of old commodities. This is because Digi.com will itself buy the products from the sellers and sell those products to the interested buyers. These services will provide unique and differentiated base to the consumers as it is will reduce to efforts of the consumers to have contact with different buyers and thus the services will be proved quite time saving for them.
In addition to this, the services of the company will also be cost saving as the buyers will need not to contact with larger number of sellers, but they directly contact to the company and the company will provide them wider range of products in its list (Woessner, 2011). The process of negotiations will also be handled by the company in its services. The company in its services will deal with wider range of products including household commodities and other commercial products. The main product line of the company will include home furniture, electronic products, automobiles (cars, scooters and bikes), mobiles, mobile phones, etc and even real estate products. The provision of these kinds of wider products and service base will help the company to company to capture a good market share even at its introductory phase.
Corporate vision and mission:
Each new company while initiating its business first determine its corporate mission and vision in order to have a good directive path for meeting its business goals and objectives (Mooij, 2009). In the same series, Digi.com will also have its specific corporate vision and mission. The corporate mission of the company will be, “Serving the global customers beyond their expectations through easier and convenient transaction modes.” This mission statement of the company will be quite eye catching for the new consumers of the company and it will provide the company a motivating way to provide newer means of services for the consumers. The vision of the company will be, “To attain a differentiated and unique market position in its industry to win competitive advantage in the long run through serving customers at the best possible level.” With the help of this vision, the company will meet its business objectives to provide improved services than competitors in order to win competitive position in its own industry.
Business strategy is a means through which is developed by a company in order to meet its desired end goals. At the initial phase of the business, the company will adopt competitive strategy. Competitive strategy will serve the company to accomplish business services in better way than rivals. Under this strategy, the company will not copy the ideas of other rivals but will implement its new innovative services in order to give competition to the rivals in an effective way (McGrath, 2013). Under this business strategy, the company will follow two main ways. First, the company will provide its services at lower prices than consumers in order to gain a leading position in its related industry. Through this initiative the company will be able to win economies of scale in the longer run. Further, the company will have differentiation strategy under which it will provide different and improved services than competitors in order to increase market share. In this way, follow up of this business strategy will enable the company to establish business in a successful way.
The corporate structure of the company will be in the form of a functional corporate structure. This model is the most suitable for the company as it is fit for single service organisations. This form is followed in the form of a standard business structure under which business activities are organised under different departments (Ireland, Hoskisson and Hitt, 2008). For new initiated business organisations, this structure is the most favourable and supportive to run the business activities in longer run.
Major business processes:
The major business process that will be followed by the company will be to develop an online portal for consumers. This online portal will facilitate consumers to buy and sell their products directly to the company. In the business process followed by the company, it will itself interact with the buyers and sellers. The consumers will need not to have contact with each others. This business process will be a time and cost saving approach. The company will directly purchase the products from the sellers and keep them in its stock and record the entries (Brocke and Rosemann, 2014). It will display the products on its online portal with all specifications and features and price. The consumers who will be interested to buy any particular product from the list of the company will contact to the company on its website. The company will operate its business process directly without any need of interaction between buyer and seller. The business process of the company will be followed by online interactive portal.
Relationship with External Entities
This new company will have relationship with several external entities. The first external entity with which the company will have relationship is the investor. The company will seek to have significant support of investment by this entity in order to flourish and accomplish the business in a successful way (Doh and Stumpf, 2005). In addition to this, the company will also have relationship with the government in order to meet all the governmental regulations to conduct the business as a legal entity.
There might be some risk for the new company at the business initiation phase. The major risks that the company can face are threat of competition, capital insufficiency, and supportive market base. At the initial phase, the company can face the issue of competition from rivals and even the consumers not being familiar with these services can not support these new services (Reuvid, 2012). To mitigate these issues, first the company should conduct a good market research and even follow effective advertising and promotion strategies in order to make the customers familiar with its services. To meet the capital insufficiency the company will need to specify the investors about the need of capital for running the business.
As the company needs to operate through electronic medium, it will need to have a well supportive information system base. The information system base will assist the company to serve the customers in the best possible way. The information system facilities will also be required for the company to have good degree of integration with the suppliers. As the main functional area of business of the company is to have interaction with the sellers and buyers, it will need to maintain good operational efficiency so that customers can have faster and effective integration with the company.
The company with the help of information system can acquire the data related to customers and can process it and provide the relevant information to the employees of the company so that they can serve the customers in desired way and maintain good relationship with them. In order to deal with the information system, the company will provide required training to the employees so that they can be diligent to upload the information about customers (Yip and Bink, 2007). In addition to this, it will also enable the customers to access the information related to the company. The company can also follow Enterprise Resource Planning (ERP) system to have integrated information.
Information Systems Requirements:
In the information systems requirements of the company, it will need to have a transaction processing system (TPS) which will need to have human resources in an organised way and will need to have business procedures and databases to record the information related to business transactions and perform the business activities in effective way (Stair and Reynolds, 2013). The use of enterprise system in the information base of the company, it will be able to have integration among different business activities such as having integration with the suppliers, control of inventory, taking supplies from the sellers and contacting with customers. With the maintenance of a database, the company can maintain its operations with high efficiency.
In order to have good customer relationship management, the company should adopt automated customer relationship management tool in which prime emphasis is given over interaction with customers with the implication of wider information technology aspects such as internet, computer integration, interactive service provisions, keeping track of customer purchase patterns and advancements in information and communication technology base (Information Resources Management Association, 2010).
Required IT infrastructure:
In order to have a well developed and supportive information system base, the company will required to set up a good IT infrastructure that can make the implementation of the new information system viable and workable operationally. At initial level, there should be a modern telecommunication infrastructure that is sophisticated enough. The telecommunication infrastructure should be realistic to make the connectivity of the all the stakeholders of the business interacted. The number of internet service providers should also be enough and level of broadband usage should also be extensive (Bidgoli, 2004). Broadband infrastructure facilities improve the connectivity of the company with the sellers, as well as, buyers. In addition to this, the physical infrastructure of the company should also be strong enough to accomplish the e-commerce activities in a regularised and efficient way.
The company will also require setting up a good hardware base to make the basic business transactions simple for the consumers (Loughlin, 2010). There should be a good compliance between hardware and software base of the IT infrastructure in order to develop a well organised and integrated information system which helps the company to save its operational cost and meeting the changing needs of the customers in the best possible manner. The infrastructural developments should be quite transparent and efficient in terms of system efficiency and accuracy and reliability functions.
For the new company, overall projected profit and loss account for upcoming 3 years can be presented as below:
For the viability of a business proposal, it is quite essential for the company to generate intensive amount of profits and revenues with the help of which, it can be proved quite helpful in providing adequate amount of returns to its investors. For this purpose, estimated income statement for next three years can be projected as above.
Initially, Apart from the existing available capital funding, for the project, there is a need of about $ 100000 which will be arranged through external investors like Angele Investors. It is anticipated that the project will generate returns of about 20% in the first year, 25% in second years and about 30% returns annually from the third year. In this way, on the basis of such financial assumptions it can be considered that making investments in the new company with the innovative idea of e-database will be a fruitful and effective decision of the investors in the long run. In starting, due to the high initial expenses and high fixed cost in setting up a new business venture, the returns will not be so high, but in the long run, this venture will be proved as highly advantageous business investments for investors.
Conclusion and Key Findings:
The presented business plan has reflected some of the crucial planning and business activities, which can be considered quite effective and crucial for setting up a new business venture with innovative business ideas. For the new business organization, it is essential to have an innovative and digital business idea, which is in accordance of the current business trends. For this purpose, e-database can be proved an effective business idea. The presented business idea is directed to provide a digital platform on which sellers and buyers of second hand commodity and used equipments can be met and perform their business transactions.
This business idea can be proved quite effective and competitive in existing business environment as this business idea is new and innovative for people. With the help of this business idea, problem of the disposal of used commodities faced by common people can be resolved in the most effective manner. However, proper and effective commercialisation of the business idea can also be considered quite essential for the purpose of making the idea more effective and successful. In this regard, the business plan aims to undertake effective and in depth planning for different activities related to the commencement of new business venture in the competitive market place. In this regard, addressing effective and stiff competition prevailing in the market place can be reflected as the first stage of new business planning. For the planned business venture, overall competitive scenario prevailing in the market is not quite high as this service is a new and innovative service in the market.
After assessing the competitive scenario prevailing in the marketplace, there is a need of assessing requirements of technical and financial resources. Owing to this reason, technical specification for the project and financial requirement of the project has been considered as some of the important aspects of the presented business plan. On the basis of future business predictions, it can be considered that the planned business venture can be proved quite effective and fruitful for the investors. Owing to this reason, making investments in the proposed business venture can be proved advantageous for Angele Investors.
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