To Build or Buy: The Strategy for the Business Concept
Assignment 1: To Build or Buy
Due Week 4 and worth 240 points
Select a small business that you visit often (e.g., coffee shop, bookstore, sporting goods store, etc.). Write a 6-8 page paper in which you:
Craft a brief (1-2 pages) strategy for a business concept that would directly compete with the small business you selected. Explain the rationale for the strategy in detail.
Determine if it would make more sense to open the new business you describe or to purchase the existing business you selected. Explain your reasoning.
Discuss the most appropriate form of ownership for your new business (assuming your current financial situation).
Outline a business plan for your business. Visit http://www(dot)sba(dot)gov for tools and templates.
Include at least two (2) references outside the textbook.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
Analyze the nature of entrepreneurship, business ethics, and social responsibility in managing a successful small business.
Analyze a business strategy and supporting business plan for a small business concept
Describe and analyze the necessary activities and key decisions to start a small business.
Use technology and information resources to research issues in small business management.
Write clearly and concisely about small business management using proper writing mechanics.
Grading for this assignment will be based on answer quality, logic/organization of the paper, and language and writing skills.
Business and Marketing
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The Strategy for the Business Concept
To beat and compete favorably with the bookshop that we share the same business environment, my strategy is coming up with an online bookshop service. The online bookstore will be operational 24hours. Membership shall be done through creating a free profile on the website. There will be two categories, one for purchasing an eBook or ordering for a book which shall be delivered to the customer’s doorstep. The service will be able to serve a maximum of a thousand people in a day.
The strategy will create a stiff competition with the main goal being, offering library services at an affordable fee and any time of the day. The business concept applied here will enable my bookshop to acquire many customers with the target audience being the middle-aged people who prefer doing things on an online platform. This is typically a new concept that will startle the competitors because their bookshops do not offer online services.
The rationale for the strategy
The main reason for the choice of the online bookstore is the fact that the other bookshops do not have an online strategy of reaching the customers. With growing use of technology, there has needed to not only have a physical business but also have an n online portal where customers can still access the services offered. Targeting the majority of internet users, the number of customers shall rise rapidly, therefore, increasing sales.
Online advertising will accompany the online marketing plan. Implementing a social media strategy will be a boost to the business. Social media platforms like Facebook and Twitter will enable people to share and like the online bookshop services offered by the firm. There will be a blog for the bookstore and information like the offers, and any other related news shall be uploaded. The social media strategy will enhance the advertisements, and in one year the Bookshop will have expanded and outwitted the competitors.
Buying a business comes with fewer risks than starting a new one from the scratches. Preferably it will be more beneficial if I purchased the other entity. The other Bookshop has had a history, and it is well recognized. It has suppliers and customers who already recognize its existence. It will be better purchasing it because my business does not have a physical location. Purchasing it and establishing my online business plan as an addition will be far much better. Since it already has the equipment and workers, it will be easy expanding on it rather than starting from the scratches.
The other reason to why I consider purchasing it is the fact that the other bookshop has established business relationships with vendors, suppliers, and customers. The fact that it already has employees who are already experienced is going to be of great value to me since I will retain them. The business has a functional and existing relationship with Banks and even certified advisors who play an important part in any existing business. The business relationships that the Bookshop has will be a boost because the time required to develop them will have been saved.
The competition factor makes me believe that it is better purchasing the other business. Once I establish my Bookshop business, it will mean that it will face stiff competition from the already existing business. This is a challenge because convincing customers otherwise will require more funds in advertising. It is not a guarantee that it will turn out well even if the advertisements are put in place. The existing risk is that my business may eventually collapse. The other business has a known financial history that knows the period when they experience numerous sales and when there are fewer sales. Such information is essential in creating competition strategies and therefore buying the entity will be better.
The other business has established prices and terms that are have been operational for many years. They have fixtures on how they handle their business. They know the prices at which they purchase the books, the suppliers from which they buy from and their ratings. Starting a new business will mean an extensive research to be done on the available vendors, research on the prevailing market prices and this might cost time and vast sums of money. Therefore there is an advantage in buying the business rather than initiating a new one. A new one will demand many resources.
The form of ownership
The best form of ownership for my small business is sole proprietorship because I gave little capital and the business has a small audience to address to, and it will be easy to operate without any help. Owning a bookshop that has only a few employees is easier done individually. The reason to why I find sole proprietorship being appropriate is because of lack of enough finance to ex...