Business Management_SL5 by ClassOf1

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									    Business Management



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                        Management
Sub: Business Management                                                      Topic: Strategic Management

Business Structure for a Startup

Question:
Situation: You and your brother wish to start a business together making craft items and selling them
on the internet. Review this situation and analyze that affect the decision on business structure.
    a) What business structure that would be best for you?
    b) What factors would you use in your analysis to answer the first question?




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 *The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for
                              submitting the same in lieu of their academic submissions for grades.
Sub: Business Management                                                      Topic: Strategic Management

Solution:
a) The business involves two aspects one of production and other sales. The desired mode of sale is
online that involves a parallel transport facility that will be mostly shipping for long routes. But first
coming to the other aspect of the business, i.e. the manufacturing, the craft industry has been a
global success but has had a varied taste when it comes to different geogrophic market.

The craft items can have a huge product depth and breath and thus it becomes important how to
pitch for the products to the respective markets. Thus, the very basic and initial point here is to mark
the scope of the business. Being a online sales business model it is of extreme importance to define
the geographic scope of target market for the initial launch of the business and then a gradual
increase in the scope can be done over time.

Now, the production has to be based out of a geography which is either a tax haven for the raw
materials or has strong govt. policy in support of such productions.

The most important aspect is the inter country trade policy that is placed between the country. This
will be discussed in detail in the next part of the discussion.

Thus to answer this part we can finally say that a fix production place (country) should be decided
upon first and then work on deciding the initial target markets.

Being an online sales model the issue of online payment and there related laws over the concern
target markets will have to be taken into account initially.




                    www.classof1.com/homework-help/BusinessManagement
 *The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for
                              submitting the same in lieu of their academic submissions for grades.
Sub: Business Management                                                      Topic: Strategic Management




                                                                  Business Model




b) When we are looking for a business model for the given craft business it is important to look at
many aspects. Starting from the scratch we have to keep the target market in mind and look for the
feasibility of the medium of sale that we are planning to adopt.

The cost of initial investment has to be kept to as low as possible so as to reduce the break even time
of business. Thus we plan to take a production site which is located at a tax heaven or a location with
laws favoring this kind of a business, just to add we will also try to look for the cheap and quick
availability of the raw material when we are going for the site hunt.

The catch that we have to check for here is that we don’t want to put the manufacturing in a location
which has bad trading ties with our target market. This is a phase of accessing all the related aspects
to the business starting from govt. regulations, cheep availability of labor and an easy associability of
the location.

The one factor that we see here is that while going for a online sale model we are not working with a
proper physical space and thus the physical evidence related to our business is reduced, this will have
to be covered up by a strong online marketing and a proper web site with all required details of the
business and offerings.

With such business model the main bottle neck is a feeling of low trust as the customer is not sure
whom he is dealing with. Thus, even in this model a space for local dealers is possible who will make
sure of providing a local feel to the global offering of the business.
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