Comparison of business ideas assignment
Question
Task Description: This is a group assignment that builds on the work completed in Assessment 2.
The objective of Assessment 3 is to develop skills that enable you to evaluate which idea (from Assessment 2) has the highest chance of success, and to then prepare a pitch that presents a compelling business case to secure financial backing. This facilitates an appreciation of what potential investors will be evaluating before they commit to project investment.
In summary, there are two parts to Assessment 3. The first requires the group to prepare a 1500-word business report that compares then selects which business idea to present from Assessment 2. The second involves everyone in the team pitching the idea to secure development capital. Each of these is detailed below:
The structure of 1500-word business report should be set out as follows:
- Idea Evaluation (Develop an evaluation framework to compare the ideas developed individually in Assessment 2)
- Idea Selection (Describe and justifyhow the best idea was selected)
- Improvements (Identify any gaps that need to be addressed before the idea is pitched to an investor)
- Revised Business Model (Amend the business model canvas to incorporate the above revisions)
- Cash flow projections (Prepare ‘best case’ and ‘worst case’ cash flow projections for the first two years. Remember to state your assumptions about the key drivers of cash flow in each scenario)
Answer
Introduction
As per the investigation conducted on this business ideas assignment, evaluation of multiple business ideas is very important in order to choose an effective business idea that is supported by financial, technological capabilities (John, 2016). The present study on business ideas assignment develops an ideas evaluation framework based on which the six business ideas generated previously are compared to each other for selection of the best business idea.
1. Idea Evaluation
As mentioned in the previous study considered to develop this business ideas assignment, six different business ideas have been generated.
Idea 1: Online purchasing and selling platform for old products
Idea 2: A restaurant based on Artificial Intelligence technology
Idea 3: A software organization for improving the practices of inventory management in supermarkets
Idea 4: Boutique hotel using Virtual reality technology
Idea 5: Coffee service along with peaceful reading and working lounges
Idea 6: Consultation services with 3D technology-based business ideas
The comparison based on the evaluation of the 6 business ideas is done in the table below within this business ideas assignment:
|
Aspects of business along with score |
Idea 1 |
Idea 2 |
Idea 3 |
Idea 4 |
Idea 5 |
Idea 6 |
|
Problem (10%) |
Inability to receive accurate price for the old products. Buyers face difficulties in finding out old products in condition. Score: 2.5% |
Waste food, inappropriate forecasting of demand, and problems in inventory management. Score: 5% |
Huge waste generation in supermarkets due to improper inventory management Score: 7.5% |
Lack of adequate hotels with proper connectivity, sustainability and technologically upgraded services within budget Score: 5% |
Lack of peaceful place for having food and completing study and works Score: 2.5% |
Lack of innovative business ideas in project planning. Score: 2.5% |
|
Potential to solve the issues (10%) |
Moderate to high Score: 7.5% |
Moderate to high Score: 7.5% |
High Score:10% |
Moderate to high Score:7.5% |
Moderate to high Score: 7.5% |
Moderate Score: 5% |
|
Competitors (10%) |
Low competition Score: 10% |
High competition Score: 2.5% |
Low to medium competition Score: 7.5% |
Medium competition Score: 5% |
High competition Score: 2.5% |
Low competition Score: 10% |
|
Customers (20%) |
Low-to medium income people who cannot afford to buy new products Score: 8% |
Low-to medium as well as high income groups Score: 15% |
Small to large scale supermarkets Score: 17.5% |
Low to medium income people Score: 8% |
People with busy life schedules Score: 8% |
Small to large scale businesses Score: 17.5% |
|
Cost of the start-up (10%) |
Medium to high Score: 2.5% |
High Score: 0% |
Medium to high Score: 2.5% |
Medium to high Score: 2.5% |
Medium to high Score: 2.5% |
Medium to high Score: 2.5% |
|
Market size (20%) |
Small Score: 4% |
Large Score: 10% |
Large Score: 10% |
Large Score: 10% |
Small Score: 4% |
Medium Score: 5% |
|
Innovativeness of the idea (10%) |
Low Score: 0% |
Medium Score: 5% |
High Score: 10% |
High Score: 10% |
Low Score: 0% |
Medium Score: 5% |
|
Technological feasibility (10%) |
High Score: 10% |
High Score: 10% |
High Score: 10% |
High Score: 10% |
Low Score: 0% |
High Score: 10% |
|
Total |
42.5% |
55% |
75% |
58% |
27% |
57.5% |
Table.1: Idea evaluation framework
(Source: Created by the learner)
2. Idea Selection
From the previously done individual projects as reviewed to prepare this business ideas assignment, six major business ideas were generated. The comparison of the individual business ideas are done on the basis of the idea evaluation framework. According to the words of Johannessen, Stokvik, Johannessen&Stokvik (2018) examined in the business ideas assignment the idea evaluation framework can be developed based on a number of factors such as innovativeness of the ides, cost of start-up, market size, customers, competition, and technological feasibility, the problem to be solved and the potential to solve the problem with the individual business ideas. Based on each factor as presented in the context of business ideas assignment, relative scores are provided to the six business ideas, and the total score for each idea has been calculated. From the overall score of the ideas, it has been identified that the third idea, a software organization for improving the practices of inventory management in supermarkets, is the best idea with 75% score. The idea stated in the business ideas assignment can be said to be best idea among the six ideas, as it is more innovative, technologically feasible as compared to the other business ideas. The idea follows the concept of lean principles and the disruptive innovations to make positive changes to the society. Moreover, as the market size for this particular business idea is large the overall positive impact is also higher as compared to the other ideas.
3. Improvements
A number of critical risks base the case scenario of business ideas assignment have been identified within the chosen business idea. According to Szopinski (2019), mitigation of the risks through the improvements in the business model is highly important in order to ensure the success of the new ventures. It is identified herein business ideas assignment that in the supermarket industry, there is a lack of inexperienced staff to handle the Artificial Intelligence technology that is the core technology behind this business idea. Therefore, the supermarket chains contacting the proposed software business for inventory solutions can face difficulty running the AI technology based operations. So, the proposed software company can improve their service along with helping the supermarkets to recruit talented staff that can operate these technologies and promote training of the staff of the supermarkets.
In the opinion of Gama, Frishammar&Parida (2019), having unclear goals in a business start-up can result is failure of the venture due to lack of direction. Therefore, the proposed business idea should be improved with more valid and strong organizational goals and objectives. Based on the purpose of the proposed business idea, the goal of the company can be suggested to be modified aiming to enhance sustainability of the supermarket supply chain with greater concentration on waste reduction at the inventory level. As per the explanation of O’ReillyandBinns (2019), implementation of the AI tevhnology can increase the chance of cyberattack to the information system of the supermarkets. Therefore, the proposed software company is recommended to enhance its service with the incorporation of the effective security solutions for its client organizations. This particular aspect would further improve the customer loyalty for the proposed business.
4. Revised Business Model
Based on the improvements explained above the business model for the proposed software company has been modified and presented below within this business ideas assignment. In the development of the business model canvas, Osterwalder&Pigneur’s canvas business model canvas template has been followed (Olokundun, Moses, Iyiola, Ibidunni,&Amaihian, 2017).
|
Key Partners Suppliers, Security software provides, Finance solution providers, Partner software companies Supermarket chains Employees Recruitment consulting firms |
Key Activities Software development to understand the requirements of stock in the supermarkets Recruitment of skilled and talented employees who can support AI implementation and training in the client organization Marketing and sales Finance management Management of cyber security |
Value Propositions Avoidance of overstocking with AI technology, Better interpretation of the demands Provision of stocking requirements Enhanced cyber security Skilled and knowledgeable staff to assist in software implementation and staff training |
Customerrelationships 24 hours customer service Online chat options After purchase services Loyalty programs Best quality software
|
Customer segments Small as well as large scale supermarket chains Geographically, across all over the Australia. |
|
Key Resources Financial resources AI technology Skilled and knowledgeable human resource Innovativeness and creativity Stock of products and installation services of the sensors in the inventories of the client supermarkets |
Channels Website PR Social media platforms Email campaigns Events and Seminars Newspapers and magazines |
|||
|
Cost structures Employee salary Software development Development of the sensors Recruitment Marketing and sales Market research Business partnerships Supplier payments Infrastructures |
Revenue streams Sales of the sensors Installation of the sensors Recruiting skilled and knowledgeable staff to promote operations and staff training in client organization After sales services |
|||
Table.2: Revised business model canvas
(Source: Created by the learner)
5. Cash flow projections
The business ideas assignment examines the readings of Szopinski (2019), cash flow projections are ideal method for effective decision making and best case and worst case cash flow projections are highly implemented in businesses to anticipate profits and potential losses.In the best case, the maximum cash flow is 200000 AUD in first year and 250000 AUD in second year. In the worst case the cash flow for first year is 80000 AUD and second year is 100000 AUD
|
Best Case |
Year 1 |
Year 2 |
|
Cash Earnings |
$ 2,00,000.00 |
$ 2,50,000.00 |
|
Less: |
|
|
|
Cash Expenses |
|
|
|
Software Installation |
$ 50,000.00 |
$ 50,000.00 |
|
Wages |
$ 20,000.00 |
$ 25,000.00 |
|
Maintenance Expenses |
$ 6,000.00 |
$ 7,000.00 |
|
Various applications |
$ 9,000.00 |
$ 10,000.00 |
|
Service expenses |
$ 33,000.00 |
$ 35,000.00 |
|
Other expenses |
$ 5,000.00 |
$ 6,000.00 |
|
hardware expenses |
$ 40,000.00 |
$ 42,000.00 |
|
Cash flow |
$ 37,000.00 |
$ 75,000.00 |
Table.3: Best Case Cash Flow projections
(Source: Created by the learner)
|
Worst Case |
Year 1 |
Year 2 |
|
Cash Earnings |
$ 80,000.00 |
$ 1,00,000.00 |
|
Less: |
|
|
|
Cash Expenses |
|
|
|
Software Installation |
$ 30,000.00 |
$ 30,000.00 |
|
Wages |
$ 20,000.00 |
$ 25,000.00 |
|
Maintenance Expenses |
$ 6,000.00 |
$ 7,000.00 |
|
Various applications |
$ 9,000.00 |
$ 10,000.00 |
|
Service expenses |
$ 33,000.00 |
$ 35,000.00 |
|
Other expenses |
$ 5,000.00 |
$ 6,000.00 |
|
hardware expenses |
$ 40,000.00 |
$ 42,000.00 |
|
Cash flow |
-$ 63,000.00 |
-$ 55,000.00 |
Table.4: Worst Case Cash Flow projections
(Source: Created by the learner)
Conclusion
From the above conducted study developed within this business ideas assignment, it can be explained that among the six business ideas developed individually, the most appropriate business idea has been selected,based on the principles of lean entrepreneurship and disruptive innovations. The business idea for the development of a software organization to support waste reduction in supermarkets within Australia with sensors based on Ai technology has been identified to be most suitable business idea. Several improvements have been stated and the modified business model canvas has been depicted in the above context of business ideas assignment along with the best case and worst case cash flow projections for 2 years.
References
Gama, F., Frishammar, J., &Parida, V. (2019). Idea generation and open innovation in SMEs: When does market?based collaboration pay off most?. Business ideas assignmentCreativity and Innovation Management, 28(1), 113-123.
Johannessen, J. A., Stokvik, H., Johannessen, J. A., &Stokvik, H. (2018).Idea Generation and Innovation', Evidence-Based Innovation Leadership.
John, T. (2016).Supporting business model idea generation through machine-generated ideas: A design theory.
O’Reilly, C., &Binns, A. J. (2019). The Three Stages of Disruptive Innovation: Idea Generation, Incubation, and Scaling. California Management Review, 61(3), 49-71.
Olokundun, A. M., Moses, C., Iyiola, O. O., Ibidunni, A. S., &Amaihian, A. B. (2017). Perceptions of students on entrepreneurship curriculum contents and openmindedness: implications for business idea generation of Nigerian University students. Academy of Entrepreneurship Journal, 23(2), 1-10.
Szopinski, D. (2019). Can Stimuli Improve Business Model Idea Generation? Developing Software-Based Tools for Business Model Innovation.Business ideas assignment In Proceedings of the 2019 on Creativity and Cognition (pp. 547-555).
Szopinski, D. (2019). Jumping, dumping, and pumping: Three mental principles for idea generation to activate software-based tools in business model innovation.
