Entrepreneurship Research Management Decision

Question: Discuss about the Entrepreneurship Research Management Decision. Answer: Introduction Mauritius is a small island that is found in the sub-Saharan Africa. In this country, the people are doing business with lee than 20 people in the entire organizations as they are medium or small scale business enterprises. They gradually lead in the growth of the country. The government helps these industries through the Small Enterprises Handicraft Development Authority (SEHDA) which is now known an SMEDA (Small and Medium Enterprise Development Authority). Honey Chocolates will start with a motive to produce chocolates and the idea of the entrepreneur behind this company is to promote happiness. It is the fact that chocolates are a symbol of happiness. The chocolates produced in this company will be healthy and of higher quality. The production of the chocolates will be handmade and even the raw material used to manufacture chocolates will purchase directly from the farmers (Shane, and Venkataraman, 2000). There will many problems face by Honey Chocolates in establishing their enterprise like financial crisis, poor infrastructure, lack of credit, lack in the skills and knowledge required by the owners, corruption, , etc. It is the fact that most of the enterprise will take time of 5 years in establishing its business (Schildt, Zahra, and Sillanp, 2006). In this study, there is a brief description on the Honey Chocolates and marketing conditions of the company. As a new and medium enterprise, the company will face many problems. This study releases the facts and findings on the Honey Chocolates Company of Mauritius. Furthermore, there will be an identification of various key factors related to this organization like market, competition, partners, key resources, financial position, revenues, sales, profits, competitive advantage, etc. Finally, there will be a conclusion that will summarize the entire report into a paragraph that will provide a gist of the study (Mair, and Marti, 2006). Company description Company history The company Honey Chocolates will initiate its operations in Mauritius. It will be a chocolate making company that manufactures handmade and natural chocolates. The company will initiate with only six members in which one is an entrepreneur and the others are labor who produce chocolates. The primary products of the company is chocolates bar, toffees, fruits chocolates, milk chocolates, chocolates gums etc. At the initial stage, the company will face the problems of funds but later on it will reach to such heights that there will no requirement to raise funds from external sources (McDougall, and Oviatt, 2000). Mission statement The mission and vision of the company is to capture the entire market of Mauritius and then to expand their business operations in the markets of Africa. In order to achieve their goals, the company will try hard and expand their business operations by increasing the production and labor of the company. In doing so, Honey Chocolates will face many problems like finance, capital, labor, raw material, etc. Products and services At initial stage, there will not a wide range of products provided by this company but gradually the company will try to manufacture and launch new products in the market. The main products of Honey Chocolates are caramel chocolates, fruits and nuts bars, chocolate powders, toffees, biscuits, etc. In beverages, there are chocolate milk additives like powders, milk powders, etc. The company will change its product line and make it strong. Thus, with a strong line of product range, Honey Chocolates will lead the chocolates industry. Due to its products, Honey Chocolates will become a leading name of the chocolates in Mauritius. Current status The current status of the company is doing good as it is gradually establishing the operations in the markets of Mauritius. It is also observed that Honey Chocolates business plan is liked by everyone. There are many individuals who are taking interest in this business proposal. The company hopes to start its operations soon in the markets of Mauritius Legal status and key partnerships The legal status of Honey Chocolates will be good as the company will incorporate in a legal way through legal process used by the company laws of Mauritius. In this way, the company will not face any legal hindrance. Instead of this, the government supports such business organization as they want to promote industrialization in the markets of Mauritius (Ireland, Reutzel, and Webb, 2005). Industry analysis Industry size, Growth rate and sales projections The size of the company will be a medium scale company. At the beginning of incorporation the company will incorporate with six members. The company is planning to purchase new machineries like packaging machines, food processing units, delivery vans, etc. In this way, the growth of the company will take place in a very fast manner (Hayton, George, and Zahra, 2002). The kind of sales Honey Chocolates prefers through a particular chain that is Wholesalers Manufacturer Distributors Retailers Customers/ Consumers Industry structure The industry structure of a company refers to its size, number of employees, distribution of competitors, in the industry. The structure of Honey Chocolates will be small as it has only 6 employees who will work in future. This organization is an informal organization where people can interact with each other, maintain good and friendly relations with each other, etc. the flow of communication in this organization is free as anyone can interact and share their ideas with any other person. Name of participants There are two directors of this company who are the owners of Honey Chocolates. The number of labours working with Honey Chocolates is six The rest members are the operation team who will manage the technical work of the company The distribution of the company will be outsourced to other company of Mauritius who handle the work of distribution because Honey Chocolates do not have much staff to manage the work done by the distribution. The company will plan to have a separate distribution team in future. Key success factors The key success factors of this company will be the higher quality. The second key success factor for Honey Chocolates will be the pricing strategy of the company as the price of the products are very reasonable with prime quality of goods and. products. The third key factor is distribution of the product. The value chain and distribution channels of the company is very effective as the products of Honey Chocolates will available at almost every retain shops, malls, shopping centers, etc. Industry trends The industry trend is very dynamic and innovative in the food and beverage industry and is one of the most competitive industries as it requires changes and innovation on a regular basis. Honey Chocolates Company will maintain the creativity of this brand by bringing new and attractive changes in the production of the chocolates. It can be fancy packaging, or designs of the chocolates and other products of this company. The top level management also observed that the industry trends of chocolates are very competitive and many small companies copy the trend. It will be a big challenge for Honey Chocolates to manage the industry trend of chocolates (Stevenson, and Jarillo, 2007). Long term prospectus The company Honey Chocolates will try to work for a longer period of time and the prospectus for this company to run for longer time are very positive. This is because the customers will like the chocolates manufactured by this company. The prospectus of sales and revenues of this company will rise in future by a huge numbers. The company will gain a significant position in the markets of Mauritius and try to expand their operations in entire Africas food and beverages markets. Hence, the long term prospectus for this company are very good and positive (Oviatt, and McDougall, 2005). Market analysis Honey Chocolates Company will become one of the leading brands of chocolates in Mauritius because there are no doubt that the company has all the strengths, weaknesses, threat and opportunities. The strengths of this company are the handmade chocolates that are very good and taste and liked by anyone. The customers become addicted to such tasty chocolates. The second advantage is that they are planning for effective pricing strategies that will attract customers (Audretsch, 2012). Besides all the strengths, the weakness of the company will be its distribution channels. As mentioned above, the work of distribution of this company will be outsourced to any other company. In this way, the company has to spend a huge amount for the distribution channels. The other weakness of this company can be finance and credit problems which are very huge for medium scale companies. The company is a medium scale company which faces many problems related to the finance and funding of the company. They have to borrow money from banks and big lenders. The opportunity is to spread and expand its operations to the markets of Mauritius and other parts of Africa. The biggest threat for Honey Chocolates Company is competition present in the food and beverage industry. There are many big and small companies who manufacture chocolates and confectionary items. Market segmentation and target market selection The target market for Honey Chocolates Company is the kids between the ages of 5 to 10. At this age, the kids preferred to eat chocolates more than any other item of confectionaries. It is one of the best needs of the kids of this age group. The other target group is the middle age people or young who have the cravings for dark chocolates. So, the challenge for Honey Chocolates Company is to produce fat free chocolates for young age group. Though, this company has no perfect segmentation for the market due to the fact that the chocolates are favorite of all the people irrespective of any age. The confectionary items are preferred by all age people (Rothaermel, Agung, and Jiang, 2007). Buyer behavior The buying habits of customers for chocolates are very high. They purchase chocolates to greet, on festivals, marriages, to fulfill their cravings, or to impress their spouses. In this way, this is a big advantage for Honey Chocolates Company to study the buying behavior of their buyers. Competitor analysis It is very important for Honey Chocolates Company to study the behavior and nature of its competitors. This is due to the fact that competitors are the biggest threat for every company whether it is food and beverage or any other industry. To achieve the competitive advantage, this becomes important for Honey Chocolates Company to study its competitors (Shane, and Venkataraman, 2000). Marketing plan Overall marketing strategy The marketing strategy of this company is to focus on the brand equity, innovation, brand equity, quality of the product, advertisement, promotions strategy, etc. The main strength of this company is the quality of the products manufactured by them. So this company will focus mainly on the brand promotion and advertisement. The marketing strategy of this company are Product: The main products of Honey Chocolates are caramel chocolates, fruits and nuts bars, chocolate powders, toffees, biscuits, etc. In beverages, there are chocolate milk additives like powders, milk powders, etc. The company will change its product line and make it strong. Thus, with a strong line of product range, Honey Chocolates will bind to lead the chocolates industry. Price: The pricing strategy of this company is to sell the products at reasonable price also that more customers get attracted towards this company. Promotions- The promotional strategy for this company is that they can use radio channels, television, promotions, direct promotion, direct selling, etc. to sell their products. Distribution The channels of distribution can be wholesalers, retailers, distributors, etc. They are the key factor for the distribution of the products and goods. The value chain and distribution channels of the company will be effective as the products of Honey Chocolates will made available at almost every retail shops, malls, shopping centers, etc. (Mitchell, et.al. 2002). Management team and company structure Management team The management team of this company comprises of 10 members in which 2 are managers and 2 are directors. The company Honey Chocolates believes that there is a need to have leaders in the company so there are 2 leaders who will handle two separate teams that is production and other is sales team (Cano, et.al. 2004). Board of directors There will be two directors of this company who handle the whole sole work of the entire company. Theyre the owners who both have 50-50% share capital invested in Honey Chocolates. The business will be initiated by both directors. Board of advisors There will no separate advisory body in Honey Chocolates. It will manage by the directors only as the company is a medium scale company and powers of authorities are centralized among the top level of management (Sharma, 2004). Company structure The Honey Chocolates company structure refers to its size, number of employees, distribution of competitors, in the industry. The company structure of Honey Chocolates will medium scale as it will initiate with only 10 employees working with them. It will be an informal organization where a free environment, effective communication, people can interact with each other, sustain good and friendly relations with each other, etc. (Achtenhagen, Naldi, and Melin, 2010). Operations plan General approach to operations The general operations are related with the buying, building and preparation of the products to sell. It includes the raw material, arrangements of labor, facilities, equipment, etc. In Honey Chocolates, the operation plan of the company is that they will acquire their raw material directly from the farmers. At initial point, Honey Chocolates is not planning to have heavy machineries as they will focus on the production handmade chocolates. There will packaging equipments and delivery vans (Low, 2001). Business location The entrepreneurs of Honey Chocolates Company believe that location plays a major role in the growth and success of the company. They are planning to settle the factory of Honey Chocolates at mer rouge industrial areas where the production and other work related to production takes place. The distribution office of this company will near the factory due to an easy transportation of goods. There will be another office of Honey Chocolates in the city center area to manage the sales work of the company (Stevenson, and Jarillo, 2007). Facilities and equipment It can be said that the company will not fully equipped with all technical facilities. But gradually they will change the manual work into machine work. The fact is that the specialties of this company will be handmade chocolates that cannot be produce through machines. The other facilities that will attract the customers are delivery vans, packaging machines, distribution channels, computerized management of accounts, etc. (Zahra, and Dess, 2001) Product design and development plan Development status and tasks The product development of this company will take place on a very simple basis. As well as the packaging of the company will be very common. They will not emphasize on differentiation in the products, packaging, and design. The development of the products will done through making designs on the computers and then manually. The significant role of simple packaging is that it looks very decent. The chocolates will be wrapped in the brown paper with golden foil (Kuratko, and Audretsch, 2009). Challenges and risks Honey Chocolates will be a medium scale company and new in the market so it will face many challenges and risks. The risk can be related to brining changes, innovative strategies, framing plans, changing operations, etc. (Wiklund, and Shepherd, 2003) Intellectual properties The patent and goodwill of the brand Honey Chocolates will become the major intellectual properties for this company. Financial projections Sources and uses of funds statement They will make their revenues by selling their products more than the cost to production. This will become the basic source of funds for Honey Chocolates. The borrowing of the funds will done through bank loans, public credits, debt issue, but these all sources of fund raising is very expensive as the interest is very high. This Company will also generate its funds from equity funding but the ideal way to generate the source is through selling of products and services (Rauch, Wiklund, Lumpkin, and Frese, 2009). Use of funds Facilities cost Equipment Advertisement Working capital Training Transactions Others Assumptions sheet Quality sold for each chocolate must be same in every year deprecation charges on the equipment must be 10 % on the fixed assets that is calculate by WDV method Half half orders are placed for each chocolate and other production related to the biscuits. The electricity charge in the production is 5 per unit (Paul Dana, 2001). Conclusion A conclusion on this study is that Honey Chocolates will be a medium scale company that will try to establish its business organization in Mauritius. In this way, Honey Chocolates Company has to work hard in future to maintain their operations and business functions to achieve their goals. The motives of this organization are very big as they want to expand their business to the entire market of North Africa. In order to achieve this, Honey Chocolates will expand the business operations through sales and production of more chocolates. They will also focusing on the promotion and marketing strategy. As a new and medium enterprise, the company will face many problems. In this study, the relevancy of entrepreneurship has discussed in a detailed version as it become very important to generate entrepreneurs in the country. The government of the countries also support and promote the new, small and medium enterprises so that they come forward. The main motive of this report is to analyze the risk and challenges faced by the new and medium scale industries at the initial stage of their incorporation. It is not easy for the entrepreneurs to manage the fianc for their ventures so they have to make an effective business plan and proposals so that the invest ore seek interest in their enterprise. A new enterprise like Honey Chocolates will achieve its goal and motives by simply applying all the mana gement theories and approaches to their organization and also through analysis of the market in which they have to deal in the future. In this way, the company would be able to cope up with the risk, challenges and issues present in the food industry. References Achtenhagen, L., Naldi, L. and Melin, L., 2010. Business growthDo practitioners and scholars really talk about the same thing?.Entrepreneurship theory and practice,34(2), pp.289-316. Audretsch, D., 2012. Entrepreneurship research.Management Decision,50(5), pp.755-764. Cano, C.R., Carrillat, F.A. and Jaramillo, F., 2004. 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