Executive Summary
Starting up a new business requires a detailed understanding of the market and the forces that will affect a firm’s operations. Kio Technical Support is a new firm that is planning to start operating in the city of London. This firm will have offices in Serbia where most of its employees shall be based. The firm will specifically help its clients in website development, website hosting, cybersecurity, CCTV installation and maintenance. These are products that are already available in the market.
However, the market research that was conducted showed that the existing firms offering these products have failed to meet the expectations of a number of their clients. Customer complaints are common, which is a strong indication that there is a gap that is yet to be filled in this market. Kio Technical Support seeks to fill this gap using high-quality products and services. The market is very competitive, and Kio Technical Support will need effective strategies to gain a competitive edge over its market rivals. As shown in the discussion, the firm will use both outward-in and inward-out approaches to develop effective strategies in the market.
When using the outward-in approach, this firm will try to understand customer needs and come up with ways of meeting them in the best way possible. It will also try to identify external environmental forces such as activities of market rivals, government policies, and other external forces and develop ways of operating successfully under these forces. Using the inward-out approach, this firm will take into consideration its resources and capabilities when defining the market segment that it will target. This company will choose the segment whose needs it can meet in the best way possible using its available resources and capabilities.
Introduction
Background
London is one of the leading business hubs not only in Europe but also at the global arena. A study by Jankowicz (2004) places the city of London as one of the top global business centres that are headquartered to some of the leading multinational corporations in the world. Starting a business in this city requires an understanding of the local market forces, coming up with what the market needs, and being able to meet these needs in a superior way to gain a competitive advantage over market rivals.
The government of the United Kingdom has created an environment that supports business growth, whether a firm is local or foreign. After conducting market research, it is apparent that organisations which operate in this city need technical support in various ways.
In a modern society where technology defines the success of firms in the competitive business environment, firms are keen on embracing emerging technologies to improve their efficiency. Services such as website creation, web hosting, and e-mail care packages, cybersecurity, and CCTV services are becoming basic needs for firms in this city. Kio Technical Support is a new start-up business that seeks to tap the market gap in the city of London.
Scenario Chosen
The scenario that has been chosen is a new business start-up as an entrepreneur. According to Saunders, Lewis, and Thornhill (2010), when starting a new business, it is important to come up with a comprehensive plan that will help in effectively managing the market forces. In most of the cases, new businesses fail within the first six months because of the poor plan put in place by the entrepreneur (Pakroo 2014). In this business plan, the entrepreneur will conduct further market research to help understand forces to expect in the market and how to effectively deal with them to enhance the sustainability of the business.
Business Opportunity
The rationale for the business idea
The city of London is rapidly growing as a business hub and the market for technological support and equipment is expanding. Firms are doing everything within their power to embrace emerging technology as one of the ways of ensuring that they remain competitive in the market.
The rationale for starting this new business has been supported by this growing need for technological support and equipment among firms in the local market. The initial market research reveals that there are firms which are already providing these products within the market. However, they do not fully meet the expectations of the clients, a fact that leaves a gap that can be filled by this firm.
Target Market, Customer and Accessibility
A study by Gruber (2014) strongly suggests that defining the target market is very critical in coming up with promotional campaigns and programmes meant to increase brand and product awareness in the market. Kio Technical Support will primarily target established firms operating in the City of London and its environs. Small firms that are also making successful inroads in the local or regional market will also be targeted. The customers will vary in terms of the industry in which they operate and their sizes. These firms are accessible as long as this firm has products which meet their needs in the best way possible.
Aims and objectives of the work
This paper aims to come up with an effective plan that can be used to implement the project of starting a new company in London. The plan should outline opportunities and threats that the firm will encounter and how to overcome them. The plan should also outline the business model that will be used in the study.
Structure of the work
This report has five chapters. The first chapter provides the background and rationale for the study. Chapter two is a detailed description of the business model that will be applied when implementing the business model. The third chapter focuses on the feasibility of the project. It looks at the ability of the business to give returns as expected. The fourth chapter focuses on the business model, while the last chapter looks at the business plan.
Business Concept
Business Opportunity
To identify business opportunities in the market, Feld and Ramsinghani (2013) state that one has to conduct comprehensive market research to identify the gaps. The researcher has come up with this business idea aftermarket research which has revealed that technological support products in the market are not effectively met in the market.
The market in London already has some players offering the products that this firm intends to offer, but clients’ complaints as shown in a report by Guillebeau (2012) is a clear indication that the market has a gap that needs to be addressed. The relevance of technology is growing, and this means an increase in products that the new firm will be offering in the market. As long as this firm is capable of offering high-quality products efficiently, then it will have the capacity to expand its market share as soon as it launches its operations in London.
Business Concept
Business idea
The business idea of this new start-up company is to offer IT-related products to firms in London. The market research shows that firms are currently very concerned about the issue of cybersecurity. A report by Bryman and Bell (2011) showed that firms are losing a lot of money to cybercriminals who are using various schemes to steal from companies or demand ransoms after accessing sensitive details of their target. Financial institutions are the major victims of this crime.
London is the financial hub of the entire European market. Kio Technical Support will offer these new firms opportunity to protect their data from such criminal-minded individuals through improved cybersecurity system. The market for cybersecurity system is rapidly growing, and this business idea is likely to succeed is it is implemented in the right manner. This firm will conduct promotional campaigns in this market. The clients will contact the management of this firm for any of the technical support products that it offers.
Mission
The mission of Kio Technical Support is to continuously offer high-quality technical support products to its clients in the European market.
Vision
The vision of this firm is to become the leading technical support solution firm in the European market.
Products
The products that will be offered by this firm include creating web sites, hosting web sites, email care packages, and IT security. The new firm will also offer CCTV equipment, installation, and maintenance in various premises of the clients within the City of London.
Positioning
According to Senor and Singer (2009), positioning is very important for a firm that is planning to introduce its products into the market for the first time. How a brand is positioned will determine how customers view it in the market. This firm will be positioned as a high-quality low-cost company that offers products in a very reliable manner. The marketing strategy that will be employed will try to position this firm as a dynamic brand that understands the emerging changes and knows how to manage them to yield the expected results.
The anticipated scale of growth
The market in London has a massive opportunity for growth. However, Lyons (2016) warns that growth can only be achieved if a firm does the right thing in the right manner to meet the expectations of the customers in a superior way. The competition will be stiff as time goes by. The market already has players offering the same products, and it is expected that new firms will emerge to fight for the same market share. With a proper plan and superior product and product delivery, it is expected that there will be growth in the market. The graph below shows the expected growth in revenues expected in the first five years of operation.
As shown in the graph above, it is anticipated that there will be consistent growth in the revenues of this firm in the first five years of its operations in London. The first two years will involve structuring and restructuring based on market forces. As such, growth is expected to be relatively slow. The third, fourth, and fifth years of operations are expected to register relatively rapid growth in revenues because the firm will be expected to have a detailed understanding of the market.
Feasibility
Research Methodology
Problem formulation
Change is a force that no firm can afford to ignore. According to Feld (2012), the market forces keep on changing due to several factors, and companies have to adjust their systems and structures in line with these changes. Eastman Kodak, a film company that once controlled over 80% of the global market share in this industry, tried to avoid change and the result was devastating. The firm was overtaken by other change-sensitive firms such as Fujifilm and currently, it is struggling to operate profitably in the market it once dominated.
This firm has always been a good example to many firms that may be slow when it comes to embracing change. According to a study by Gavron (2012), large firms are currently very sensitive when it comes to embracing change. Every time they realise that there is a shift, they try to adjust their systems and structures in line with the anticipated change. In London, there are numerous firms in various industries which are struggling to manage change driven by emerging technologies.
This process is not easy because it forces these firms to have divided attention when it comes to delivering value to their customers. It has been a challenge to these firms trying to monitor the emerging technologies and their impact while at the same time trying to produce products of high quality. According to Schmidt (2014), many firms currently consider hiring other firms to help them monitor and manage emerging technologies and the changes that come with them.
The problem that most of these firms face in the market is that they are yet to find firms which can deliver the value that they desire. Some firms such as Amazon.com have registered complaints about the attacks on the accounts of their clients whenever they make their online purchases (Hoffman & Casnocha 2012). This is happening despite these companies having very cybersecurity solution providers. It is an indication that the problem is yet to be effectively addressed. Kio Technical Support intends to find a lasting solution to these problems using the latest technologies. It is expected that the approach that this firm will talk will help firms in London effectively address their current problems.
Current market research objectives
The objective of this study is to have a detailed understanding of the target market in London. This is a new firm that is getting into a new market. Lau (2005) warns that a new firm should take time to conduct thorough research that will enable it to understand the market forces of the market before launching its operations. Through such processes, the firm can know what to expect in the market, and how to deal with the forces in the environment. Through this market research, this new firm will know what to do and what to avoid while in the market. It is a part of a wider strategy to help this firm achieve market success.
Market research design
When conducting market research, a firm can take different approaches based on the resources available, the aim of the research, and other related factors. Research can take a descriptive, explorative, qualitative, quantitative, or casual approach. In this study, the researcher will use a multifaceted approach. The first approach will be the exploratory strategy where the firm will focus on the identification of the gap in the market. The study will explore what is already available in the market and areas where adjustments are needed. Of interest will be to identify products or services which the current firms do not offer satisfactorily.
The process will help in coming up with an appropriate market segment that this firm will target. As Hill (2002) advises, a firm needs to identify a segment of the market to target instead of targeting the entire market, especially if it is a new firm that is just getting into the market. The process of segmenting the market and subsequently identifying the appropriate segment requires an exploratory research design.
The researcher will be able to understand demographical issues such as age, gender, education, income, and occupation of the individual people that will be involved when it comes to negotiating contracts. Geographic, behavioural, and psychographic factors will also be effectively captured through explorative research. Some aspects of quantitative research will also be involved. It will be necessary to quantify some aspects of the market to help in determining the costs that should be planned for and other related factors.
Information and sources required
The time available for this study did not make it possible to collect primary data. As such, the information that will be used will come from secondary sources of data. The sources will include books, journal articles, business reports, newspapers, magazines, and other reliable sources. It means that libraries, websites, and the internet will be instrumental in collecting the data.
Data analysis method
As mentioned above, the research design chosen will be explorative and quantitative methods. It means that analysis will be conducted using a descriptive approach where certain environmental factors in the market will be described in details. The use of statistical methods will also be important to come up with graphs and charts that can help explain different market forces and their anticipated impact on this firm. Inferences can then be made from the outcome of such statistical analysis. The financial feasibility will also be conducted using statistical figures.
Formulating the findings
This research is expected to help come up with specific findings that will help in the process of decision making for the planned business. The findings must clearly explain the target market, the products that should be offered, and the level of competition. There should be an analysis of the expected market rivals and how this firm can come up with a competitive advantage.
Through the analysis of the data, the findings should state the external environmental factors such as government policies that this firm should have proper knowledge of before starting its operations in the market. When formulating the findings, the researcher will ensure that there is a detailed description of what this firm should avoid and what it should emphasize on as it starts its operations in the highly competitive business environment.
Market Research and Product Offering
Explorative research
In this explorative study, the researcher aims to identify the gap that exists in the current market and to come up with ways of finding a market in that gap. To do this, the study will investigate various sources of information about the market in London. According to Meager, Bates, and Cowling (2003), London is one of the most researched markets in the world because of its strategic importance to global companies. It is home to some of the leading multinational companies. As such, finding the required data from various sources will not be a big challenge. The figure below shows the cybersecurity skills that a given study found to be difficult to recruit in the United Kingdom.
From the above information, it is apparent that skills in implementing secure systems, information assurance testing and methodologies, and incident management are some of the rare skills in the United Kingdom’s cybersecurity space. The limited skills in these areas demonstrate that if a firm finds skilled people who can help in these areas, then they can be willing to pay for their services. This is a gap in the market that needs to be filled, and Kio Technical Support intends to do just that.
Market segmentation
The cyberspace offers a wide market that Kio Technical Support, as a small start-up firm, cannot target in its entirety. It means that this firm will need to identify a section of the market whose needs it can meet perfectly. Market segmentation is, therefore, very critical at this stage. Market segmentation, according to Plunkett (2006), refers to the process of classifying customers into subsets based on their age, race, religion, gender, purchasing power, location, or any other demographical factors that make them reason differently when it comes to making a purchasing decision.
When segmenting the market, it is important to first understand the capabilities of the firm in question. This way, the segmentation will try to identify a section of the market whose needs a firm can satisfy without struggling. After identifying the market segments, a firm can classify them into different groups. The first group will be that which the firm intends to target with its current products. The other segments can be earmarked for products that will be developed by the firm at a future date. The table below shows different segmentation approaches that can be used to identify and classify customers.
Once the segmentation has been done based on the classifications above, it becomes easy to identify a segment that can be targeted based on their characteristics. It is important to note that Kio Technical Support will have different packages suitable for clients in the different demographics that will be chosen.
Product identification
The gap in the market
The market gap may be easy to identify based on the complaints from the customers as Kahan (2007) notes, but it may not be easy to meet the needs of the customers in that gap. This is so because they are demanding for something beyond what other firms can offer. It means that the new firm must be above average or identify a very special niche that existing firms have ignored. Kio Technical Support has already specified the products that it will offer.
The products are meant to help firms operate easily in the online platform without having to worry about the threat posed by cybercriminals. Firms are offering the same products in the market, but the constant complaints from customers is a clear indication that these firms are not doing a good job in meeting these needs. As such, a gap is created that this firm seeks to fill.
The market in the gap
According to Sweeney and Sweeney (2011), after identifying a gap in the market, the next important thing is to find a way of creating a market in the gap. Given that the market has a gap that is not fully addressed, then there is an opportunity that can be tapped by a firm capable of filling in the gap. Kio Technical Support can fill this gap by delivering quality products to the clients.
Products description
Kio Technical Support will offer various IT solutions to its clients in the market. The primary products have been identified as the development of web sites, hosting web sites, email care packages, and IT security. It is also clear that this firm will offer CCTV equipment, their installation, and maintenance in various premises of the clients. The figure below shows a variety of products that this firm will offer its clients.
Kio Technical Support has several experts who will be responsible for service delivery. Some of the products will be manufactured at the firm’s main premises in Belgrade, Serbia. Once a client makes an order, the order will be processed in the offices in London and if it needs the technical services of the firm’s engineers and technicians, the management will send these officers to the field. If the product needed is not readily available in the London officers, an order will be made for it to be imported as soon as possible.
Market Analysis
London is one of the most attractive markets in the world for any firm that is planning to expand its operations beyond the borders of its home country. The high population of the city, the high purchasing power of the residents, improved infrastructure, and high security are some of the factors that make this market very attractive to the target market.
The market has some marked differences when compared with the home market in Serbia. As such, conducting a detailed market analysis will be critical in making the management of this new firm understand what is expected of them. Several models exist that can be used to understand the environment that this firm intends to operate in when it starts its operations. The models include PESTEL Analysis to understand the operating environment and Porter’s Five Forces to understand the competitive environment.
PESTEL Analysis
The political environment in London is very conducive for any firm that indents to operate in it. The political class has been keen on avoiding any direct interference with the business environment. The leaders treat both local and foreign firms equally, which means that the market is levelled for all the players. The recent BREXIT vote that saw the Britons vote for an exit from this market may be a blow to the business community, but it may also be an advantage because it will limit the ability of other firms to get into this market.
Kio Technical Support will greatly benefit from this political environment in this country. The economic environment will also be very beneficial to this new firm given the position of the city in Europe. Since the United Kingdom is no longer the leading economy in the world as was the case before the two world wars, it is still a dominant economy globally.
The city of London is specifically one of the most affluent cities in the world. The flow of money in this city is high and firms are always willing to spend a lot to improve their operations in the market. The willingness of firms to spend and their financial power means that Kio Technical Support will have no problem selling its products as long as they meet the expectations of the clients.
The social environment is another factor that must be considered when conducting a market analysis. According to Wetherly and Otter (2013), factors such as religion and spirit of nationalism are very important when a firm is scanning a new market. For instance, there was a time when the Chinese would prefer local to foreign products, even if the foreign product is superior to the local products (Harrigan 2013). In such an environment, it may be almost impossible for a foreign firm to compete favourably with the local ones.
The social environment in London is very supportive of both local and foreign products. Customers are keen on the quality of the product offered to them, not the country of origin of the product offered to them. The technological environment is another very important factor that affects how a firm operates in the market. According to Suder (2004), technology is one of the factors that influence change in the environment the most. The United Kingdom, just like in many other developed countries, is sensitive to emerging technologies.
It will always be one of the first countries to adapt to new technologies in case it did not originate from within its borders. In the city of London, firms are often keen on embracing emerging technologies as a way of improving their operations in the market. The city has one of the most advanced technological systems in the field of information technology.
It means that this firm will benefit a lot because firms are keen on upgrading their systems based on the emerging market forces. It means that companies will be ready to purchase new technological products that it will be offering in the market as long as they are convinced that the product is relevant to their operations.
The ecology is increasingly becoming an issue in the current business environment. For a long time, companies have paid less attention to the issue of environmental attention. Palmer and Hartley (2011) say that a few decades ago, many companies did not believe that climate change and global warming would become major environmental issues that would affect their operations. However, the time has proven that scientists and environmentalists were right in their predictions.
Both global warming and climate change have become a reality, and firms are faced with situations where they have to put into consideration the impact of their activities on the environment. The city of London has one of the most stringent policies regarding climate change. The city has policies regarding the amount of carbon dioxide that a firm is permitted to emit per given period. There are also very strict policies when it comes to the management of wastes. Kio Technical Support will need to understand these waste management policies to ensure that it operates as per the expectations of the government and the general public.
The final factor in this model is the legal environment. Law is an important factor in the business environment. The government sets laws and regulations which should be followed by firms to ensure that they can relate well with other firms, with their clients, with the government, or any other stakeholder that is relevant to its normal operations.
It is almost impossible for a firm to operate freely in an environment that lacks very clear laws and regulations. These laws help in protecting a company from unfair practices that may be employed by any of the stakeholders. The government of the United Kingdom has developed a legal structure that helps firms in the country to operate in an environment that is orderly. The authorities in London city have also come up with laws and by-laws that companies have to respect when operating locally. Kio Technical Support will need to understand these laws and regulations to ensure that its operations in this city do not go against government policies.
Porter’s Five Forces Analysis
Porters Five Forces have been a very useful tool when analysing the competitiveness of the business environment in a given market. The model looks at various stakeholders and how they have power over the firm being analysed. The figure below shows the model.
As shown in the figure above, one of the biggest factors that should be considered when analysing the competitiveness of a business environment is the threat of new entrants. In an environment where new entrants can emerge with ease, Fernando (2011) says that competition can become so high that a firm may find it challenging to protect its market share.
Hamaoui (2015) says that the city of London is one of the strategic cities for firms planning to expand their operations to Europe from other parts of the world. The government of the United Kingdom has placed no restrictions on foreign business entities planning to enter the country. The environment is also very supportive of new local firms trying to enter a given market segment with new products. It means that the threat of new entrants in this market is real. New firms can come up at any time, and every time they emerge in this industry, this company will be expected to be ready to deal with a more competitive business environment.
The bargaining power of the suppliers is another factor that may affect the normal operations of the firm. Suppliers are some of the most important stakeholders in any business entity. They provide the needed materials which are processed by a given company before being handed over to the new clients. Fernando (2011) says that when the suppliers have strong bargaining power, then a firm may find itself in a situation where it has to give in to their demands.
In the industry where Kio Technical Support operates, most of the products that it uses can be purchased from various vendors. It means that no single vendor has a monopoly of these raw materials. The availability of numerous vendors offering the same products in the market lowers the bargaining power of the suppliers. Operating in such an environment is good because it eliminates cases where a firm has to give in to the demands of one supplier.
The bargaining power of the buyers is another critical factor that should always be put into consideration when analyzing the business environment. The power of the buyers may be high if any of the two cases below apply. The first case is when numerous other firms are offering the same product in the same market. In such an environment, clients have several choices to make whenever there is need to purchase such products. It gives them the power to demand high quality at low prices.
The second case is a situation where customers are large organisational buyers. When dealing with organisational buyers, a firm may sometimes be forced to give in to their demands because of their purchasing power (Hoffman & Casnocha 2012). The products offered by Kio Technical Support can be faced with both cases discussed above. Its main clients are organisational buyers that have very strong purchasing power. Its products are also offered by other firms in the market. The management of this company will have to come up with strategies for managing this environmental force.
The threat of substitute products sometimes becomes an issue, especially when the business environment is highly competitive. When several substitute products exist which can be used instead of products of a given company, then it means that the level of competition will be high (Sweeney & Sweeney 2011). Customers will be weighing whether to purchase such a product or its substitutes based on factors such as cost, quality, and relevance.
The threat of substitute is real for Kio Technical Support. Since this threat may not be significant (because firms can no longer operate without websites, CCTV systems, and cybersecurity) it may be dangerous to ignore these factors. The management must come up with ways of taming this threat by offering products of high quality.
Finally, the issue of rivalry among the existing competitors in the market may need to be given serious consideration in this analysis. The level of competitive rivalry is often determined by the number of competitors in the market and the approach they use to win clients. In an environment where there are numerous players, competitive rivalry may be very high. The situation may be made worse if the competitors are trying to use various ways to outsmart their rivals in the market (Feld & Ramsinghani 2013).
The competitive rivalry in this industry in London is considerably high, and given the trend, it is expected that the competition may become even stiffer. One of the extreme strategies that firms may employ in such a business environment is a pricing strategy where companies lower their prices to attract more clients. Engaging in such price wars may have a devastating impact on a firm. Kio Technical Support may need to create a special niche for itself in the London market that will shield it from stiff competition and its negative consequences in the market. The following table is a summary of the five forces in London.
Organisational Feasibility
At this stage, it is necessary to conduct organisational feasibility of Kio Technical Support to understand if it can deliver the planned products in the desired quality, quantity, and in the right manner. To successfully launch the new products in the market, there are some factors within the internal environment of this firm that must be put into consideration.
The first one is management expertise. The management of this new business entity may lack the experience of operating in the London market, but it has the needed expertise. The manager who will be stationed in the London offices has high academic qualifications and has stayed in London for some time. This manager knows what should be done when entering this industry having worked at similar firms outside the United Kingdom. The management is also very flexible and ready to embrace change whenever it is necessary.
Organisational competence is another factor that must be looked at critically when conducting the feasibility of this firm. The organisational competence, in this case, refers to the ability of the firm to offer the desired products excellently to ensure that the needs of its clients are effectively met. Kio Technical Support has the organisational competence that is needed in this industry. It has a team of experts in Serbia who have experience in this industry. The workforce in Serbia can help this firm make a successful entry into the United Kingdom’s market.
Financial capabilities also play a role in determining the feasibility of a firm. As Lyons (2016) says, for a firm to operate successfully in a new market, it will need financial power to facilitate its operations. Kio Technical Support is a small firm that is just getting into a new market for the first time. It may not have the financial power that other established firms enjoy in the market. However, the company has enough finances that can enable it to make a successful entry into the new market. The table below shows a summary of factors about the organisational feasibility of this company.
Financial Feasibility
Estimates of sales
According to Sweeney and Sweeney (2011), London is home to numerous firms that may need IT services such as web creation, hosting and management, cybersecurity products, CCTV services among others. Given the rate at which new firms are getting into the market and given the fact that Kio Technical Support will target firms in various industries in this city, it is important to precisely determine the market size. However, it is possible to have some estimates of the value of an investment based on the existing data. The following figure shows the estimated investment volume in the city from 1995 to 2013.
It is estimated that the invested volume of in the city of London is over £14 billion as per the graph above. This information helps in understanding the size of the market that this new firm seeks to serve. Assuming that this firm can serve 1% of this estimate and that it will be able to make sales worth 0.4 % of that value in the first year of its operations, then it would mean that the first-year sales will be {£14,000,000,000 × 0.01 × 0.003= £ 560,000}. In chapter 2, it was estimated that the sales in the first year would be £ 500,000, which is a close value to the one that has been calculated above. The growth for the first five years is shown in the chart above.
Funding for the project
The investor has set aside £ 250,000 for this new business venture. This investment is expected to cover most of the fixed costs such as rent, equipment, furniture, fixtures, and fittings. The money is also expected to cover the salaries of the seven employees for the first six months of operation.
Projections of cash flow
The projected cash flow will primarily come from the sales of the products of this firm to the clients in the market. The following table shows the expected cash flow from the operations of this firm.
As shown in the table above, it is expected that the company will struggle within the first year, but its revenues will significantly grow after the first year of market operations.
Projections of profit and loss
It was projected that this firm will have revenue of about £ 560,000 in its first year of operations. To achieve this target, it will be necessary for the management to find ways of boosting its sales within this period. The investment made by the promoter was determined to be £ 250,000. This investment was meant to cover both recurring and fixed costs.
Some of the recurring costs such as rent were covered in this investment for six months, after which it was expected that the revenues will meet the operations costs. In the first year, the profit margin is estimated to be 15% or less. However, this figure is expected to increase significantly after the first six years. The profit and loss projections are shown in Table 5.
Break-even analysis
According to Schmidt (2014), whenever an entrepreneur invests, it is always his or her expectation that after some time, his or her investment will be recovered to ensure that the firm starts making profits. The break-even analysis helps in determining when such a firm starts to make the profit. It involves an analysis of the initial investments made, the costs of operations, and the revenues generated from the operations. Using the formula of Break-even point = Fixed costs/Contributions Margin per unit (Feld & Ramsinghani 2013). Based on the estimates set above, the break-even point can be calculated as shown in the figure below.
As shown in the figure above, the break-even point shall be achieved when the sales reach £ 350,000. It is expected that this will be achieved before the end of the second year of operations if the forces in the environment remain unchanged.
Evaluation of risks
Kio Technical Support will be operating in a new market, and it is expected that it may encounter several risks which are worth taking care of to ensure that there is continuity. Other than normal risks discussed above such as competition, power of buyers and sellers, and presence of substitutes, there are other possible risks which are worth planning for in advance (Feld & Ramsinghani 2013). One such risk is a possible fluctuation of prices of the raw materials used in this firm. Such fluctuations may lead to a significant increase in the cost of operations.
Another risk that this firm may need to take care of is inflation. Soon after the BREXIT vote, the economy of the United Kingdom experienced a sudden shock. The value of the local currency suddenly dropped compared with the value of other major currencies. Such unpredictable market forces may have a significant impact on the normal operations of the firm. It may reduce the firm’s profitability and extend the time needed to break even. This firm will need to come up with a proper plan of how to break even.
Business Model
Business Analysis
Resource-based Theory
According to Leander (2005), most of the existing business models often take the outward-in approach where a firm looks at the environmental forces then come up with strategies of managing them. However, it is important to understand that this approach is not always the most appropriate one, especially when handling a firm that is just getting into the market and has limited resources.
Sometimes it becomes necessary to take an inward-out approach where a firm looks at its internal resources and capabilities before deciding what it can offer the market in the best way possible. Kio Technical Support is getting into the United Kingdom’s market for the first time. It has chosen London city which is the most competitive market in the entire region. As such, it is important to come up with a business model that will be very effective in capturing this market.
This firm will require the management of Kio Technical Support to have a thorough analysis of its internal resources and capabilities before coming up with an appropriate business model that will manage the stiff market competition. The firm should consider using Resource-based Theory to analyse its resources and capabilities. The figure below is a model of Resource-based Theory.
This theory suggests that when a firm is developing a strategy, five steps should be followed to ensure that resources and capabilities are in line with the expectations of the market. In the first stage, a firm is expected to classify resources. According to Arenius and Minniti (2005), resource classification makes it easy to identify areas of strength and weaknesses so that appropriate action can be taken to address these weaknesses. When the resources are effectively classified, the next step should be the identification of capabilities.
The management will try to analyse what these resources can do towards achieving the set objectives. Identification of capabilities of the resources should start by looking at the human resource. In the case of Kio Technical Support, the management will look at what its employees can or cannot do in the new market before initiating promotional campaigns. It will also look at the limits of its resources such as tools, finances, and time before making commitments to its customers. The third stage is to define rent potential.
The management is expected to determine what its resources and capabilities can earn when they are put into effective use (Avnimelech & Teubal 2004). This will involve looking at the potential output if the operations begin in the London market. The attention at this stage is on what the firm can offer the market in terms of quality and quantity when the operations begin. The assessment will also focus on the quality of delivery of goods and services, especially when it comes to the maintenance of physical and cybersecurity of the clients.
The fourth stage, which is often considered the final stage, is to come up with a strategy based on the internal assessment outcomes. The strategy developed should focus on delivering the best value to the clients based on the resources and capabilities of the firm. The management will find a way of maximising the use of its resources and capabilities to give the firm a competitive edge over its market rivals. The fifth stage is the identification of the resource gap, a stage that leads to the first stage in this cyclic process of strategy development.
The management is expected to regularly identify resource gaps in its system and find a way of filling the gaps. Once the gap is filled, the entire assessment of the resources and capabilities will be redone so that a new strategy can be developed after the introduction of the new resources. The cyclic nature of this model enhances dynamism within an organisation. This way, a firm can change based on the changing environmental forces. It will be responsive to the changing trends and tastes of the clients. Such a strategy will be very important in the competitive market of London.
Sources of Sustainability and Competitive Advantage
According to Cooper and Mehta (2006), sustainability is a fundamental principle that a firm must take into consideration when operating in a given market. Petrova (2012) defines sustainability as the process of “meeting the current needs without compromising the ability of the future generation to meet their own needs. It means ensuring that the operations of the firm today will not make it impossible to meet the future needs of the firm. The moment a firm starts operating in the market, it should always try to find ways of protecting its future in that market.
As Gwartney, Lawson, and Clark (2005) note, there are three pillars of sustainability which include place, people, and profit. The place factor refers to the environment within which a firm operates and the need to ensure that it remains sustainable. It is one of the most ignored factors of sustainability because many firms rarely consider protecting the environment.
Kio Technical Support’s business operations do not pose any serious threat to the environment. However, some of the wastes that may be coming from the sites where it operates may be hazardous to the environment. Having effective waste management strategies should be part of its strategy to achieve sustainability. Having corporate social responsibility that focuses on environmental protection may be the best way of ensuring that this firm protects the environment within which it operates.
The second pillar of sustainability is the people. A firm must ensure that it takes care of people who are directly or indirectly related to its operations in a given market. The employees are important in helping this firm achieve its objectives. As a way of ensuring that it remains sustainable in the market, this firm should often make an effort to meet the needs of all its workers. The employees should feel respected and appreciated by the management. Their morale largely depends on the motivational factors put in place by the management.
According to Petrova (2012), a firm can use various motivational factors besides attractive remunerations. Customers are also important people whose interest must always be taken into consideration. It is immoral for a company to only be focused on earning more profits without trying to meet the needs of its clients in the best way possible. Every strategy that this firm introduces should always take into consideration the well-being of the clients. Other stakeholders such as shareholders and suppliers should never be ignored.
The third pillar of sustainability is profitability. According to Reynolds (2005), most companies often emphasize this last pillar of sustainability because of its direct benefits to the firm. For a firm to remain operational in the market, its activities must earn the profits that can finance it.
Kio Technical Support has some financial resources that have already been set aside to support it as it gets into the new market in London. However, the financiers believe that after some time this firm will be capable of supporting its activities and to pay back the investors their initial investment. It means that the operations must be profitable. The revenues generated from the operational activities should exceed the expenditures of the firm.
According to Petrova (2012), a company can gain a competitive advantage over its market rivals if it is capable of delivering superior value to the clients. It must have something special that its market rivals are lacking. For Kio Technical Support, most of the odds are against it given that it is a start-up company in a foreign highly competitive market. The well-established players might have an edge over it. However, there might be some factors that may favour them in the market. Conducting a SWOT analysis may help in identifying areas of strength and weaknesses in the market. The table below shows a SWOT analysis for this new company.
To assess the competency of Kio Technical Support, it may be necessary to use the VRIO framework.
Concepts in Strategy
When developing a business strategy, one can choose from several models that exists based on several factors which have been discussed above. Some of the models that can be used include BCG Growth Matrix, Ansoff Matrix, Balanced Score Card, Bowman’s Clock, Ocean Strategies, McKinsey 7s, and Porter’s Generic forces. These models, although different, share several characteristics when it comes to defining how a firm should approach a given business. Given that this is a new business that is just starting operations in London, only one of these models will be chosen to define the strategy that this firm should use in the market. The model chosen is Porter’s Generic Strategy to help it gain a competitive advantage over its market rivals. The figure below shows Porter’s Generic Strategies Model.
As shown in the above figure, this model’s focus is to find sources of competitive advantage that a firm may have over its rivals in the market. The first quadrant shows a focus on cost leadership. In this strategy, a firm may either lower the cost of its products below the market average to expand its market share or increase profits by lowering costs of production. This strategy is common when a dominant firm realises that its products are similar to that of its competitors and differentiation may not work to making its products special in the market.
The strategy is often not recommendable because it reduces the profitability of the firm and it may cause fierce rivalry in the market. It is also a sign that a firm has run out of ideas and it is making a desperate move to attract customers to its products. It can only be used in cases where there are no possible strategies. It is also recommended that if it has to be used, then it should only be for a short term because no firm can withstand a prolonged price war. Schmidt (2014) says that this strategy can only be used by dominant firms that have huge financial resources that can sustain them during the period of a price war. At this initial stage of market entry, Kio Technical Support shouldn’t use this strategy.
The second approach that a firm may use if the market is differentiation strategy. In this approach, a firm tries to come up with ways of making its products unique from that of its competitors. Differentiation is a popular strategy that many firms use in the market. As Petrova (2012) says, differentiation can be achieved in many ways. A firm can decide to come up with products which are superior to that of its market rivals to gain a competitive advantage in the market.
In cases where products are almost the same, for example in the salt industry, then packaging is often a way of differentiating the product of one company from that of the competitors. Packaging and brand are used to make products of a given firm appear superior to that of the competitors’ even if they meet the needs of the customers in the same manner. A firm may use product delivery strategy as an approach to achieving a competitive advantage in the market. For instance, it may have after-sale services for its clients to make them more satisfied. This strategy may be useful for Kio Technical Support as it gets to settle in this market.
The third approach is the focus strategy. As shown in the figure above, the focus can be on costs or differentiation. Cost focus involves narrowing down on product offering by offering few products but in the best way possible. The firm may need to focus on only those products that it can offer using least cost possible and in a superior way based on its resources and capabilities.
The overall aim of this strategy is to ensure that the cost of delivering products to the market is lowered. In differentiation focus, a firm selects a market segment that it can serve best, and comes up with products unique from other competitors (Feld & Ramsinghani 2013). This is the most appropriate strategy for Kio Technical Support.
As it gets into the new market in London, it should take time to identify a segment that is not properly served by the existing firms. It is possible to find a few firms already targeting such a segment. It should then come up with a product that uniquely meets the needs of the customers in the market. One of the biggest advantages of this strategy is that it does not involve using a lot of resources. This new company will only need to master the market and identify a segment that it can uniquely meet its needs.
Key Performance Indicators
Key performance indicators will be a useful tool when this firm starts its operations in the market. According to Warner and Hefetz (2008), this tool is used in revenue improvement, reduction of costs, improvement of process cycle-time, and increasing customer satisfaction. When it comes to the improvement of revenues, this tools helps in assessing the current revenues of the firm and factors that affect the flow.
When using this tool, the management of Kio Technical Support will look at its current revenue sources and what the firm can do to expand its revenue stream. It may start operations offering the products defined in chapter one, but with time it may find ways of expanding its line of products. The expansion is meant to increase revenue streams for the firm.
Cost reduction is another important area that key performance indicators may assess. Schmidt (2014) says that it is the responsibility of the management to find ways of reducing costs of operation as much as possible. This tool helps the management to identify areas of expenditure within the firm. These expenses can be ranked based on their relevance and impact on the firm.
This way, it becomes easy to identify irrelevant expenses and those that are important to the firm. Irrelevant expenses are then eliminated. Those that are insignificant to the firm’s success can then be eliminated or possibly reduced to reduce the overall cost of operations. Through such assessments, it becomes possible to discover irregular payments or pilferages within the organisation. Eliminating such pilferages and irregular payments also help in cutting down the cost of operation.
Process cycle-time is another critical factor that defines the success of a firm in the market. The total time that a firm takes to complete a given task or project determines how effective it can meet the needs of its customers. Projects that take longer than expected often cost more because they are affected by factors such as inflation, vandalism, pilferage, wear, and tear. Using this tool, a firm can assess these processes and procedures and identify areas of weakness that need to be addressed. Addressing such weaknesses will make it easy for the firm to complete future projects on time and with minimal resources.
Customer satisfaction is critical for the survival of any firm in the current competitive business environment. Using key performance indicators, it is possible to determine how well a firm is meeting customer needs in the market. The quality of products that a firm offers to its clients defines how well it meets their expectations.
Customers expect high value whenever they purchase products in the market. If Kio Technical Support meets the expectations of its customers in terms of quality delivery, then it will win their trust in the market. Quantity is another factor that defines the level of satisfaction of the customers. For instance, when a client makes an order for the installation of CCTV cameras in their premises, they have their expectation about the number of cameras that should be fitted by this company.
Failing to meet this expectation may reduce clients’ level of satisfaction. Another factor that affects the satisfaction of customers is how a firm delivers its products. The time that the firm takes to respond to order and the relationship that is developed during the entire period of product delivery is very important. These customers have their expectations and failing to meet them may lead to some form of dissatisfaction. Using this model, it is possible to understand all the areas of customer satisfaction and what the new firm will need to do to avoid disappointing its clients.
Developing an Appropriate Business Model
Kio will use Clicks Business Model in the new market when it starts its operations. In this business model, this firm will rent an office in London where it will be coordinating all its activities. It will develop a website where its clients can visit whenever they intend to purchase any product from the company. The company will not have its stores.
When a client purchases a given item from the company from its website, this firm will get the item from the producer and deliver it directly to the client. If it is to be installed, for example when they purchase CCTV camera and its entire system, the firm will send its team of experts to fix the system at the premises o the client. The following 9 building blocks of the business model will be taken into consideration.
Value proposition: Kio Technical Support will need to define the areas that it will be creating value for the customers as it starts its operations in the United Kingdom. This firm will be offering value to clients in the field of cybersecurity and CCTV. Its primary goal is to ensure that its clients can operate without any fear of attack. The security offered by this company to its clients not only focuses on the physical premises but also the online platforms where the firm operates.
Customer segments: Kio Technical Support will majorly be handling single-sided customer segments. As stated above, most of the customers will be large well-established firms seeking improved security in their systems. During the initial stages of operation, the customers will be narrowed down to those operating within the city of London. Later, the firm may consider expanding its market scope.
Channels: According to Zheng, Chi, and Tse (2005), the brick-and-mortar channel was once the only channel of reaching out to the target clients. However, this has changed over time due to emerging technologies. Many firms are currently using bricks and clicks as a way of reaching to the customers. Given the resources available for this firm and strategies that the management intends to use, clicks will be the most appropriate channel. This will mean that this firm will make its products available to the customers in the online platform.
Customer relationship: Developing a unique relationship with the customers is very important as the firm tries to develop a pool of loyal customers. This relationship will be developed by offering clients high-quality products. The firm will make regular follow-ups to ensure that the installed systems are working as per the expectations of the clients. Whenever there is an issue raised by the client, the management of this firm will try to be as swift as possible in its response.
Key activities: The main products of this firm have been defined in the first chapter of this document. One of the main activities will be website development and hosting. Maintenance of these websites, once they are operational, is another important activity that will be maintained by the employees of Kio Technical Support. CCTV cameras installation and management are other activities that will be maintained in this company
Key resources: To understand the above-mentioned activities, this company will need several resources. The human resource will be needed to ensure that the said activities are conducted within the specified time and in a specified manner. Financial resources will be needed to support the operations of this firm. Fixed assets such as building and machinery will also be necessary.
Key partnerships: To achieve success in this market, this firm will need to form partnerships with other firms that it shares the same vision with, especially the suppliers. West London Security Limited and G-TEC may be important partners in this market. Other important partners include the developers of software used in enhancing online security.
Revenue streams: The revenue that this firm will get shall come from its operational activities in the market. The services it shall offer to the customers and the products it will be selling will be its primary revenue sources. The management may consider expanding its product line to increase its revenue stream.
Cost structure: The firm will be offering a wide range of products to its clients. Each product will have different cost based on the package that the customer purchases and the number of follow-ups needed after the initial installation.
Review of Business Plan
Assessment of Business Plan
Product idea
The market for website development and management, cybersecurity, and CCTV camera installation and management is relatively developed because firms have come to realise the need to improve their security both in the online and brick-and-mortar platforms. Companies offering solutions in these areas in the city of London are many and some of them have been in operation for decades. However, market research has revealed that the existing players have not been able to meet the needs of their clients in the best way possible.
Cases where firms, currently using several cybersecurity software, are hacked and their important documents were stolen are not uncommon in the city of London. There have been other cases where CCTV cameras, which are expected to record events taking place in the physical premises of the companies, fail to capture important events because of failure or general ineffectiveness. This is a market gap that this firm must find a way of filling to achieve success in its operations in the market (Feld & Ramsinghani 2013). Kio Technical Support knows that other players are already operating in this market. The idea is to identify the market gaps and come up with effective ways of filling these gaps.
Legal issues
According to Feld and Ramsinghani (2013), the legal environment within which a firm operates should be clearly defined to ensure that its operations are in line with policies, regulations, and laws of the land. It is almost impossible for a firm to achieve success in the market if there is no clear and effective legal environment that defines how a firm should relate with its clients, suppliers, government, and many other stakeholders.
The management will need to take time to understand the legal structure in London city. Before this firm can start its official operations, the management must understand that there are processes that it must go through to get the approval of the relevant government authorities. These authorities will assess the capacity of this firm to offer what it plans to offer its clients and define quality standards that must be met when the company starts operations. The management must ensure that it sticks to its commitments made during the registration process.
Licensing process in London can sometimes be very complex, especially for a new firm that knows very little about the city and about the process of registering a business. Kio Technical Support will have to get all the relevant documents from various government departments. Department of Communication will have to authorise operations of this firm before it can get the necessary license.
The authorisation can only come if the firm proves that it can deliver value to its clients. Its capabilities and resources may be assessed before the license is given. Business insurance will be another legal requirement that this firm will need to have when it starts its operations. Given the nature of the business of this firm, it may not be costly to ensure its operations. The management will also need to get registration for Value Added Tax. The owners of this new business entity have a responsibility to the government to pay tax regularly as long as it operates in this country.
Financial requirements
It is the responsibility of business owners to ensure that their company is properly funded to facilitate its operations in the market (Pritchard 2005). Given that this is a new firm, most of the initial funding will come from the business owners. Resources to be used to finance the initial budget of the firm as it gets into the market have been set aside.
However, as the firm continues to expand, it may need additional sources of funds to support its growth in the market. The capital market in London is one of the most established in the world, which means that it will not be very difficult for this firm to get loans from local financial institutions. Government of the United Kingdom has funding programmes meant for emerging entrepreneurial establishments, especially those founded by youth. However, accessing this fund may be challenging for Kio Technical Support unless it decides to sell some of its shares of the company to local youths who qualify to get such funds.
Risk issues
When operating in this new market, this company will need to be conscious of the risks that it may face and the impact of these risks. Some of the risks that this firm should be conscious of is the stiff market competition. It will need to ensure that its products are superior to that of the market rivals. It may also deal with market competition by identifying a special niche that other competitors cannot compete in with ease. Possible cyber attack is another major risk that this new company should be ready to deal with as it starts its operations.
Marketing matters
Kio Technical Support is a brand that is yet to be known in the market. It will require heavy investment and dedication in marketing to achieve brand awareness. The management will need to invest both in mass and social media marketing to ensure that its brand is known within this market. Social media marketing, especially Facebook, YouTube, and Twitter marketing are strategies that this firm should pay attention to besides mass media marketing.
Resource sufficiency
Resources can never be perfectly sufficient, but what Kio Technical Support has is enough to support its initial operations in the market. As Mitra (2002) notes, how available resources are planned for determines how successful a firm can be in a given market. For this new firm, resources are limited and that is why the management has decided to have only one office in London while other operations will be coordinated from the offices in Serbia. The firm is doing everything possible to cut down its expenses to ensure that the resources available are used efficiently.
Proposed Action Plan
According to Warner and Hefetz (2008), when planning to enter a new market, a firm is required to come up with an effective action plan that defines activities that the firm will carry out and the time within which each activity should be completed. The action plan will provide the new management with a guide on what should be done at what time from market survey to the time of starting official operations. With such a plan, avoidable mistakes are often eliminated to make the operations of the firm smooth. For Kio Technical Support, the following Gantt chart will be useful in defining a timeline for various activities.
Critical Success Factors
Critical success factors are activities or elements within the organisation that are necessary to ensure that a firm achieves its mission. These factors should be directly linked to the goals and objectives of the organisation (Khawaja & Din 2007). At Kio Technical Support, the following are some of the critical success factors that will need to be taken into consideration as this firm starts its operations in the new market.
- The company should find ways of expanding its market share in the local market by acquiring new clients.
- The firm should improve the quality of its products to ensure that they are of high standards as per the expectation of its clients.
- Cut down the cost of operations by identifying and eliminating unnecessary wastes in its operations.
- Improve efficiency in its production process by employing emerging technologies.
- The firm should be flexible and sensitive to change to ensure that it embraces the new systems and structures that may emerge in the market.
- The primary focus of this firm should be customer satisfaction as it tries to create a special niche for itself in the competitive market in London.
Reflection Questions
Research methods and processes
Describing the justification of the research method to a reader
In this major study, the researcher used explorative and quantitative methods. It was necessary to use both methods to help come up with an effective plan that would be useful to this new firm as it plans to get into the market. According to Harrison (2013), mixed research method, although it may be very involving, offers a researcher to collect both descriptive and statistical data over a given issue. Descriptive data enable the respondents to give their views freely over an issue and to explain why they hold a given thought in a given manner.
On the other hand, statistical methods enable the researcher to come up with empirical data that can be analysed using computer methods. Such results are easily understood by the readers because they are often presented in the form of graphs, charts, or even pictograms. They explain the magnitude of a given phenomenon. Using both methods makes it easy to have a comprehensive understanding of the market forces under investigation.
This document may be of critical use to future scholars. They may want to use the documents to support their arguments or to learn new facts as they conduct their study. However, Lyons (2016) says that before using a given study as a resource a researcher should investigate the methods used in a given study. It is important to look at the validity and reliability of the research before using it as a source.
In this study, the researcher was keen on ensuring that other scholars can easily use this document as a resource in their future research. The method chosen is simple and straightforward and it would not be challenging for the consumers of this document to understand the reason why a given conclusion was made by the end of the study.
Describing the justification of the research methods to a future employer
According to Blank and Dorf (2012), current employers are keen on hiring people with skills and capabilities in undertaking various tasks. When conducting a given research project, the process that a researcher takes to arrive at the findings and solutions may help the employer to understand the strategies that such an individual will use in the firm as an employee. The method used in this study can be applied in a firm context when undertaking a given project. The use of the Gantt chart and the systematic undertaking of activities in this project is something that can be replicated when undertaking projects in a company context.
Literature and sources
When conducting this research, several theories have been used at different stages to help in the analysis process. When conducting the feasibility of the project, it was important to critically analyse the external market within which Kio Technical Support would operate. Several models were used. Porter’s Five Forces Model was used to assess the competitiveness of the market. PESTEL Model was used to critically assess the market forces and how they will affect the operations of this company.
The use of these two models made it easy for entrepreneurs to know what to expect as soon as they get into the new market in London. The internal resources and capabilities of the firm had to be defined, and this required the use of SWOT analysis. Getting to know the strength and weaknesses of the firm was important as it prepared to start operations of the new market.
The resource-based theory was also another important theory when defining the internal capabilities of the firm. Porters Generic Forces Model was used to help define the path that this company can take when it comes to segmentation and target marketing. Literature was collected from various sources. Books were very important in this project. The researcher also used peer-reviewed journals to inform the study. Some of the information in this report was collected from reliable online sources. Information from these sources was used to justify the conclusions and recommendations made in the study.
These sources were very important and fundamental to my work. The researcher did not use primary data sources in this research. It means that the study wholly relied on information from books, journal articles, and various online sources. This document is meant to influence the decision made by policymakers, especially when it comes to supporting new start-ups. It is also expected that this document will be important to young scholars who shall be conducting studies in this field.
To make this document reliable, it was necessary to use reliable data sources that can easily be trusted by others who may want to use this document. Sometimes making decisions about appropriate market entry strategy can be very challenging. It may even force a firm to use trial and error to come up with an appropriate strategy in the market. However, these published sources can help a firm to know what to do and what to avoid when entering a new market. That is why these sources were considered critical.
Knowledge
The project has helped the researcher to expand knowledge in the field of business start-up. This study has focused on an ambitious project where a new firm targets a market that is highly competitive and has well-established competitors. The chosen market (London) is also one of the most competitive markets in entire Europe. Under normal circumstances, a firm would always try to identify markets with less competition. However, this firm has decided to operate in this competitive market despite the challenges that it may face.
Through this project, I have learnt that even in markets that are very competitive and with established competitors, it is still possible for a new start-up to identify a market segment that is not fully happy with products offered in the market hence they can operate successfully. The project taught the researcher how to plan.
Breaking an entire project into individual activities simplifies the entire process. Assessing the progress under such circumstances is also made easy. From this research project, the researcher was able to learn what it takes to make a new business succeed in the market even in cases where it is an operation with very minimal resources. The study has proven that even small firms with limited finds can expand its operations beyond its national borders as long as it has what the clients need.
The new knowledge gained from this project is very important to the researcher in several ways. This business idea can be put into practice and if done in the right way, it can be a success. The knowledge gained from this research has helped in dispelling the notion that London is an unfriendly market for new firms, especially those from foreign countries. It became apparent that a start-up firm can set up premises in this city and start operation without straining. This project enhanced the capabilities of the researcher to apply several models.
The project used several models which may be very relevant to this firm’s future. From the project, the researcher was also able to understand the legal environment in the United Kingdom when it comes to registration of new firms. In case the researcher may find it necessary to start a new firm in London in the future, it is now clear which steps should be followed to get registered and start operating legally with all the needed documents.
Learning
This research has made me learn a lot. The following are some of the key areas of knowledge that the researcher has gained from this research project.
Conducting academic research
This project offered the researcher a perfect opportunity to conduct an MBA scholarly research in the field of new business start-up. Through this research, it was clear what one should do to collect relevant data from the field. In this study, primary data was not used. The researcher had to identify reliable secondary sources of data that would support the conclusions of the study in a reliable manner.
The project made the researcher learn how to identify appropriate secondary data sources. The use of descriptive and statistical data analysis expanded the capabilities of the researcher to analyse secondary data sources. Given the opportunity in future to conduct further research on a given field, the researcher will be able to use both methods.
Conducting market research
According to Harrison (2013), conducting market research is more demanding than when conducting academic research. Unlike academic research that many times are not applied in a practical context, market research is meant to inform actions of the managers and if it has loopholes, then the firm may be subjected to wrong decisions that do not reflect the true picture in the environment. In such cases, the firm may incur serious financial losses.
This project was conducted as if it were real market research. Aspects that one should focus on when conducting market research were all taken into consideration when conducting this research. The researcher now has a better knowledge of the London market for a small technology company, and the segments that can be targeted to achieve the desired success.
Compiling the research report
Compiling a huge report systematically requires some sound background in conducting a research project. This particular project made it possible for the researcher to learn how to compile a report after collecting and analysing the data. It enabled the researcher to know how to present the information in a way that is easily understood by the users of the document. The process made the researcher know the importance of reliability of a research project and how to enhance it when conducting a study.
Applying the knowledge learnt
Learning can only be said to have occurred if the knowledge can be applied in a practical context (Blank and Dorf 2012). The knowledge gathered from this research project will be applied in many fields in future. The researcher intends to pursue further education in this field. The knowledge and experience gained from this process will be put into practice in future when conducting other academic research. I also intend to apply this knowledge in my place of work in future when conducting market studies.
Critical thinking and ideas
In carrying out this research, the most important discovery is that there is always a gap in the market even in cases where the industry seems very established and with dominant players who are keen on meeting the expectations of their clients in the best way possible. Before starting this project, it was almost impossible to imagine that there is a technological gap in the fields of cybersecurity and CCTV camera services in London.
As Harrison (2013) puts it, London is a major global technology hub that is leading to technological advancements. Issues about cybersecurity have been a concern and the city has seen several firms emerge to solve this problem. However, thorough market research demonstrated that indeed there is a gap despite having well-established firms in this industry. The discovery was very important in redefining the entrepreneurial spirit of the researcher.
According to Pakroo (2014), most of the modern market strategists have been emphasising on the need for companies to embrace an outward-in approach to managing market forces. They argue that time, when firms came up with products without understanding the needs of the customers, is long gone. Indeed, a product can only be successful in the market if it is developed with the needs of the customers in mind. However, this study has also demonstrated that a company should not ignore an inward-out approach when formulating its market strategies.
A firm must look at its resources and capabilities before coming up with a market segment that it intends to target. It has been revealed that the two approaches must be integrated to achieve the desired outcome. First, the management must understand its capabilities based on the resources that it has. This inward-out analysis is meant to direct a firm in choosing an appropriate market segment that it should target. After that, it should then use an outward-in approach to find out how best it can meet the needs of the selected segment.
The study also enabled the researcher to understand the concept of internal business environment analysis and various tools that can be used in that assessment. For a long time, the researcher has been relying on SWOT analysis to assess the internal capabilities of firms. Through this study, it became apparent that several other tools can also be used to assess the internal environment. Resource-based Theory was particularly important in this project and the researcher intends to continue using it in the future analysis of firms.
Barriers met
Barriers faced when undertaking the research
When undertaking this research, several barriers were met in one way or the other affected the study. Time was a major barrier that was faced in this project. It would have been necessary to conduct primary data analysis, but the time available made it almost impossible to do that. It forced the researcher to fully rely on secondary data sources for the research. Identifying the right resources for the study also proved to be a challenge.
After deciding to use secondary sources in the study, it became necessary to select these sources carefully to enhance the validity of this report. It took longer than expected gathering specific data that meet the objectives of the study. According to Lyons (2016), when conducting desk research, sometimes it helps to have people who have gone through the process to discuss the topic before the project begins.
Unfortunately, the researcher was unable to identify and reach out to other senior scholars who had gone through the same process and researched the same topic. The researcher faced a challenge trying to prove the validity of the study. In cases where information is collected from primary sources, both internal and external validity can be determined through various models. However, when the study wholly relies on secondary sources, then the only way of confirming the validity is to assure the readers of the document that the sources used were very reliable.
Barriers faced when completing the project
The process of completing this project was faced with a few challenges that are worth noting. The use of statistical methods proved to be a challenge given that the study majorly relied on secondary sources. Processing already processed statistical information seemed repetitive and unnecessary in this research. The researcher did not find any third party to go through the entire document to give suggestions on areas of weaknesses before handing it in for an assessment.
It means that the document lacked additional input of an academic mentor to help strengthen the document. This was partly due to the limited time that was available for the research. Despite all these challenges, the researcher did everything to ensure that the document was of high quality. The research was able to use the limited time available to come up with a comprehensive report that fully addresses the research aim and objectives.
Professional development
The most important business skill that the researcher has learnt from this project is how to operate in a highly competitive business environment. According to Harrison (2013), many firms fear competition and would do everything to avoid it. It is true that when the competitive rivalry in the market is very stiff, then sometimes it may be difficult to achieve success.
This is specifically the case in situations where instead of firms concentrating on providing high value to their clients, they focus on bringing down their rivals. From this research, it is clear that a firm can still achieve success by identifying a market gap and creating a unique niche. Instead of competing directly with these market rivals, a firm would try to identify areas in the market that the current firms are not effectively addressing as would be desired by the customers.
Coming up with ways of addressing the market gap is the most appropriate way of avoiding market competition. This is so because what the firm will be offering will be unique. The competition in the market will be irrelevant to such a firm because it will have its unique target market.
This project has a researcher to learn that when planning to enter a new market, planning is everything. In this case, it was noted that the market in Serbia is very different from that in the United Kingdom, especially in the city of London. Competition in London is stiff and clients are more demanding, especially if the clients are organisational buyers. To enter such a market successfully, a firm will need a comprehensive plan such as the one developed in the project. In that plan, a firm must first conduct a detailed market survey to understand the local forces.
With this knowledge, it becomes easy to come up with a workable plan. In the plan, the entire market entry process must be broken down to specific activities that must be carried out to achieve success. There must be a timeline in the plan that specifies when each activity should be completed. The plan must also include all the resources needed such as finances, human resource, machines, among other resources. These skills are important because they will be critical in the future career of the researcher.
Objectives
When starting this research project, several objectives were set by the researcher. The primary aim was to come up with a comprehensive plan that a firm can use to enter a new market in Europe. London was the chosen city because of its strategic location as a regional business hub in Europe. This aim has been achieved successfully even if primary data was not used. The researcher has been able to come up with a comprehensive market entry plan that can be applied in a practical context in case a firm decides to enter such a market with the proposed products.
The researcher also had an objective of coming up with appropriate internal assessment methods that a firm can use in the market in the case when trying to enhance its capabilities. As Blank and Dorf (2012) note, after understanding the market needs and the gap that a firm can fill, it is always necessary to assess a firm’s internal capabilities. It may be necessary to have several models that can be used to assess the internal capabilities of a firm and the researcher wanted to identify and apply these different assessment methods. This objective was achieved effectively based on the models used in this study.
The researcher was also interested in developing a framework that can be used to make products of a firm unique compared to that of the market rivals. It is often easier said than done when a firm is advised to develop unique products in the market.
However, this study has outlined ways through which this uniqueness can be achieved. It is clearly shown that to achieve this uniqueness, a firm needs to first identify a gap in the market. Focusing on meeting the needs of customers identified in the gap is the first and most important step in developing unique products in the market. This is so because the firm will not be trying to meet the needs met by other firms. It will focus on a new need that can only be met by new products.
Findings and outcomes
As mentioned in the methodology section of this paper, this project was meant to create a difference in the existing bodies of knowledge on the topic of business start-up, especially when the firm is entering a highly competitive market. Although it is academic research, it is a document that can be used by companies to enhance their operations. As such, issues of the feasibility of the findings, recommendations, and conclusions are of great importance.
The researcher ensured that the report could be practically implemented if it becomes necessary to do so. The report took a practical approach where every activity was defined based on realistic timeline and resources. The findings of the study, therefore, give a true reflection of the market forces in London and what a firm can do to manage them.
I the findings, steps that a new firm needs to take to get legal documents for operation in the city of London have been clearly defined. This information is very important to a future employer who may be interested in starting a new business in this city. The document outlines every step that should be taken and the documents that will be obtained for a firm to start operating in this market. The researcher himself may be interested in starting a business in this city, and this information will be very useful in the process of registering the firm.
The conclusions and recommendations that have been made in this study are also very relevant in this study. The researcher had limited time to conduct this research, but a lot of emphases was laid on collecting very relevant data that would help in understanding the history of the market and how supportive it is when it comes to supporting new businesses.
The researcher gave recommendations after a critical analysis of the market and after looking at all the resources and capabilities of the firm. It means that if the information were to be applied in a practical context, then realising the set objectives may not be a big problem. To a future employer, this project will be a strong major area of assessing the capabilities of this candidate. In companies, it is expected that similar projects will arise. The employer may be planning to expand operations of the company beyond the borders of the home country. This document will be a clear indicator that the researcher can make the expansion process a success.
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