Innovative Idea for a New Product, namely the Round Umbrellas - Essay Example

 Innovative Idea for a New Product The majority of people for many years have been using the round umbrellas all over the word. The round umbrellas are known for being prone to damage from a storm and heavy winds. The winds blow the umbrella making it turn inside out leading to embarrassment and also they are not convenient in their use. Some innovative people came up with storm proof umbrellas and others windproof umbrellas. However many did not give a positive response to them because the umbrellas were too big or too small and convenient for use especially for one person use. The umbrellas have also been too expensive for people to purchase and adapt to the change. For this reason, I chose to come up with a new product on umbrellas that are consumer friendly both in price and in its use. The umbrellas will help minimize the issue of umbrellas being prone to damages both during storms and also in high winds. The umbrellas will be aerodynamic wind resistant designed that will ensure that the umbrella will not overturn during heavy winds. The umbrella will also be extra reinforced rib constructed to ensure that they are firm enough to withstand storms and wind. The umbrellas will be designed in different sizes; big to serve many people in a place, relative small for few individual and also for one person. The umbrellas are designed such that one will not be wet on trousers and even hands, unlike the other umbrellas. The umbrella will use less expensive materials like anodized aluminum, its configuration is manual and has 5 -6 ribs that make it's cheaper but still strong to withstand storms. For this business the business structure that best suits it is partnership structure. A partnership involves two or more agree to start a business and run it jointly. The partnership will work well for this innovation since it has few formalities needed, and there is a partnership deed that regulates the operations of the business. With the partnership, there is shared management control and task sharing that reduces the workload for one person. The partners may also take part in their areas of specialization where they are best skilled ensuring that the business runs so well. Partnership venture also limits the chances of one bearing the losses that one may incur alone since they are shared among the partners hence; it makes it attractive to many businesses. Having the issue of loss sharing every partner will work keenly to reduce possible chances of incurring losses in the market, and so the business runs efficiently to gain profits. There are number stages in changing an idea onto a real business venture. Some of the steps are as discussed below. Generating of the idea To establish a venture, it all begins with developing some ideas. In this stage, researchers are more involved. An idea may be formed by describing a problem or a gap in the market and finding a solution the problem or ways possible to fill the gap. In my idea, it was out of need of storm and windproof umbrella mainly to low-income earning population Opportunity evaluation In opportunity assessment, one looks for opportunities worth investing. Investment is capital driven, and so assessment of the available opportunities is key when selecting a business venture. Conducting research is a tool necessary for the innovation to be successful since it apparently gives one an opportunity to make a choice. To make a decision on my venture, I also put into consideration on other assets like intellectual property to ensure success in my business. Planning Planning is a crucial act for every business to survive. After deciding on what to invest in, one needs to plan on how to run and capitalize the business opportunity. A plan indicates the life of a business and should, therefore, involve the objectives and targets of the business. Key things when planning is the strategy and operating plan. Planning begins with simple ideas but as the market matures it becomes complicated for the business will have become complex and demanding on planning. One is required to come up with a business plan that is considered to be living but not one-time document. To make the business plan look simpler and easy to execute for our venture, we broke it down into various mini-projects. Planning is so much involving, for my business to be successful I had to plan on various things: The business location For my business that mainly concerned with low-income earners, I have to choose a location that will increase their access to the product. The location has to be close to them to minimize the transport expense to my firm. The location will also be determined by the market, competition, and even raw material accessibility. Business structure Business structure is the form in which a business operates. It determines the formation, running, control and management of a business. The business structure will vary depending on the size and the desire of the owners. For my innovation to be well performing I chose it to be a partnership business venture. I chose the potential partners who were willing to work with the business. The partnership business is easy to form and run its operations. Financing options Finances are essential assets for every business to provide its products or services to its customers. Long term sources of finance are more considered valuable to big companies. Without financial support a business even though with great ideas can quickly collapse. In my venture, I had to plan on the sources of finance in order to avoid challenges in establishing my business venture. My sources were: getting a long term loan from a financing institution, partners’ contribution and also the profits made from selling our product. Having enough capital will enhance our performance and make the business operation more efficient and effective. Business formation After the opportunity is identified, the partners go further to launch the business. All business needs a license or a permit to operate hence; the company should be legally authorized to carry out its operations. To start a partnership business, we will have to come up with a business name and register it, make tax registrations, draw a partnership agreement and apply for a license to run the business. Once the enterprise has been legally formed, the operations to sell our products to the market will begin. Much of the efforts will be put in marketing of the product. Marketing will help the potential buyers and other people aware of the new product in the market. The potential buyers for our product are chosen to be the poor who cannot afford the quality storm wind umbrellas that are in the market but too expensive for them. The new umbrellas are likely to attract more market since they will be of right quality and cheaper. The number of potential customers is predicted to be so high and will increase over time. However, the level of competition will be so high since there all already established firms existing in the markets. The umbrella companies though expensive will be a great threat to the new business since their credibility is already known in the market. The rich will prefer the expensive products in the assumption that the expensive products are of better quality regardless of the facts behind the product. The competitors are so many in the market with different forms and designs of umbrellas in the market and, therefore, posing a challenge to the new business. An action plan is a plan that outlines actions in details that are aimed at achieving a particular objective in a business. There are several barriers that may arise later in a business that need to be planned for. Some of the barriers may be foreseen, and so an action plan needs to be made. The hindrances to the success of the venture may be; Lowering of price by other businesses Other businesses may in future lower their prices in order to acquire a larger market posing a threat to the business. Many customers will purchase the cheaper products that were initially high. The enterprises with the low prices will overcome the competitive environment. Therefore to remain prevailing in the market there will be a need to improve the quality of our product to be better than that of other firms and maximize on marketing techniques. Good quality products will attract other customers to purchase our goods. Employers’ reluctance to work The workers may be not willing to work effectively for the business and may eventually produce shoddy products hindering the success of the business. The workers are core people in the production of goods. The employees should be motivated to provide quality work by offering them some incentives and awarding them for quality work done. The employers will work better depending on their relation with the employees. Human resource management needs to ensure well-being of the workers by providing a conducive working environment and also their social welfare. The workers when satisfied with their relationship with the employer they will work so well producing quality products that will entice more customers. New firms are coming into the industry Many industries may start venturing on the same product giving consumers a wide variety to choose. The new firms threaten the existing business. The new enterprises increase the availability of the product. The firms may come in as a result of easy access to finance institutions that provide the capital to start a business. The products may have a slight difference from the existing ones. The coming of new companies make the enterprise make changes in their product to make them more attracting to make the business still successful. The changes that will need to be done are of shapes, decorations and also the quality. The changes will increase the bargaining power of the firm. References Dalley, Jeff, and Bob Hamilton. "Knowledge, Context, and Learning in the Small Business." International Small Business Journal. April-June 2000. Pinson, Linda. (2004). Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future (6th Edition). Page 20. Dearborn Trade: Chicago, USA. Susan B. Wilson; Michael S. Pmp Dobson (12 March 2008). Goal Setting: How to Create an Action Plan and Achieve Your Goals (Second ed.). pp. 3–21 Read More