For this assignmment each team will select a new product or service and develop a simple business plan. The product or service chosen can be an adaptation of an exisiting product or service. Here's an example of adapting a service. The first Internet providers charged customers for a fixed number of minutes they used in a particular period, typically one month. Currently, Internet providers charge a fixed fee for unlimited use during a particular period, typically one month. Here's an example of a product that has been adapted. The U.S. Department of Defense developed and manages the Global Positioning System (GPS) for use in military applications. This technology is finding its way into all sorts of commercial products from automobiles to mobile phones to personal units people can carry. A third way to innovate is to improve the delivery of products and services. Think about what Amazon.com has done for books or Ebay has done for just about everything else.
This assignment offers you an opportunity to exercise your creativity, both individually and as a team. This does not mean that your analysis should be based on conjecture alone. It should be based on sound quantitative and qualitative reasoning. Your conclusions should be supported with as much real-world information as possible. For example, the price of your product or service should take into account such things as the cost to produce it and the price people would be willing to pay for it, which is greatly influenced by the price of substitute products or services. You will be doing some preliminary market research to come up with the necessary information to support your conclusions. For example, you should interview a sample of at least 30 people who you believe could be potential consumers to find out what a reasonable price might be. In addition, you may interview people who may be able to help you determine what it might cost to produce your product or service.
Each team develops a simple business plan in 15 to 25 pages formatted in accordance with APA guidelines that includes the following:
A description of the product or service. It is very important that you describe the unique attributes of your product or service that distinguish it from possible substitutes.
A justification as to why there is a need for the product or service, supported by references from articles, web sites, and/or interviews with prospective customers.
The industry in which this business would operate.
A discussion of who the potential consumers are and an estimate of the size of the market.
A list of possible substitutes for the product or service and both current as well as potential competitors.
A recommendation for the price of the product or service. You should conduct a simple research study to support your recommendation. You should survey at least 30 respondents. It might be easier to split the survey data collection among the team members in order to reach the desired goal of 30 responses. Your report should include the following:
A discrete frequency distribution of the responses.
A listing of basic descriptive statistics for central tendency (mean, median, mode) and variability (standard deviation, variance, range, and interquartile).
A discussion of which measures of central tendency and variablility were chosen to help with your decision for price. For example, if you chose the mean describe why this measure was chosen and what it tells us about the price of the product.
An explanation of the proposed business model. In other words, explain how you expect to make a profit. You need to think about how the product or service will be produced and marketed. If your team selects a product, will you manufacture the product yourself or outsource the manufacturing to another company? Where would you produce the product? In discussing the marketing of your product or service, you should decide whether you will sell the product directly to consumers or have a retail firm (i.e., department store) sell it for you. You might decide to sell it over the Internet. You should explain why your chosen methods of production and marketing are the best for your product or service.
A proforma income statement for the chosen business as an Excel spreadsheet. Usually an income statement is prepared at the end of a year. A proforma income statement is prepared at the beginning of a year. As such, it contains estimates of revenue and expenses. It is important that you provide as much justification for your estimates as possible. The results from the proforma income statement should be explained and incorporated into your plan.
To address this issue, we propose to market via an exclusive agreement, a paperless and cardless Infrared payment system. Several have been developed and are being test marketed overseas, but market penetration in the United States is non-existent at present. Such systems allow customers to securely transmit payment information to stores and businesses without requiring them to present a card. These systems use either PDAs, Cellphones, or allow for a credit card to be dipped away from a central payment area, such as at a restaurant table.