Entrepreneurship (H) Essay Example
Table of Contents
32.0 Situational Analysis and Problem Statement
53.0 Proposed Solutions
64.0 Business Model Analysis
64.2 Value Proposition
74.3 Team Analysis
74.4Financial Analysis and Sources of Finance
94.5 Stakeholder Analysis
The DHL Company is a multinational corporation venture. The venture operates in the logistics and distribution industry. As such, it is mainly involved in the transportation and delivery of goods and products globally. In a bid to diversify its market localization and efficiency, it has regional branches. As such, although strategic market and organsiational decisions are executed from the headquarters, it has respective regional offices that make operational market decisions and strategies. Among the products and services offered by the organisation include freight transportation, where it offers cargo delivery from one destination to the other. Moreover, it offers express delivery services, and e-commerce goods delivery services respectively (DHL, 2015).
In addition, it offers the delivery services through rail, road, sea, and air transportation services respectively. As such, the selection of a delivery service process is based on the cost, goods requirement urgency, and the nature of the goods respectively. Although the venture remains largely competitive, global market changes are posing a sustainability challenge. As such, it is imperative to identify an entrepreneurial opportunity to enhance sustainability in the future UAE market environment. This report offers an analysis of a potential entrepreneurial opportunity as well as its implementation process for the venture.
2.0 Situational Analysis and Problem Statement
In order to realize the challenges that DHL as a logistics Company is bound to experience in the future, it is imperative to conduct a UAE macro environmental situation analysis. In this case, this report offers a review of the market political, social, and technological changes both in the present and in the future. On one hand, the UAE market political stability has increased as democratic space increases over the last decade. As such, this has created increased business market stability, a virtue which has led to increased market potential for competition in the logistics industry.
The potential for increased market competition implies that in order for DHL to remain competitiveness it should employee new strategic business models. In addition, an evaluation of the social cultural market environment depicts a changing market structure. In this case, the market is increasingly dominated by the younger generation. As such, this has led to customer buying behavior challenges, as well as value proposition and satisfaction levels change. Finally, a technological market analysis illustrates a rising technology adoption status. In this case, the connectivity level for the UAE market has increased to 82.7% in 2014, form 62.7% in 2010 (UAE Internet Usage, 2014). This serves s an indicator of the impacts of the population structure change on technology use.
A comparison of the above external market analysis and the organisational products and services indicates a major challenge. On its part, the venture focuses on the delivery of goods. Thus, besides its regular platform indications of product status, there is minimal inclusion of the customers once the delivery process has commenced. As such, the customers in the UAE rely on the organisational regular updates to realize and establish the in transit goods status. Although the venture has established trust and reliability, the minimal customer inclusion is a major challenge. In this case, the younger UAE population is increasingly concerned with organsiational operations. As Schilling (2012) stated, the modern customer value chain and value creation process is hedged on the extent and magnitude of customer involvement.
One major challenge in the market is the rise of small scale local delivery logistics companies that offer customized services. In this case, the customers using such small scale companies can easily locate and trace the products movements. However, this only applies for international deliveries with DHL. Therefore, the analysis concludes that the minimal customers’ involvements for domestic deliveries pose the risk of reducing the venture competitiveness for the domestic market deliveries.
3.0 Proposed Solutions
Based on the above problem analysis for DHL, it is apparent that the venture should develop and adopt alternative market measures. In this case, the organisation should adopt a different approach and product service into the future, to retain its domestic market competitiveness. This analysis proposes the development of a new model application for its clients. In this case, the venture should supply the application in the various online application stores such as Google play store and the android shop among others. In this case, the clients should be able to download the application and sign up using their official details, the names they use in sending and receiving parcel services within the UAE.
As such, the names should be based on the official government registration and documentations by the UAE government. Once the customers register, they should be able to select and obtain a password and login name that they could subsequently login within the subsequent login periods. Once logged in, the customers should key in the parcel or product delivery details which would in turn allow them to track the exact location of the products. In this case, the tracking system will be enabled by a GPRS tracking system attached to each allotment batch serial for deliveries within the UAE market.
4.0 Business Model Analysis
The proposed idea will be protected by the venture trade mark. In this regard, the overall market analysis creates a suitable basis in which the idea will be galvanised. In this case, it will be offered and installed through the organisational trademark to reduce emulation and product imitation respectively. Moreover, it will be offered within the UAE ICT regulations in the market.
4.2 Value Proposition
A business idea and product value proposition is the actual benefit derived by the customers in the market. As such, this allows for the development and adoption of an alternative approach through which to satisfy the customer needs. A good product value proposition is hedged on the ability to meet the customer needs. The proposed DHL mobile application will offer a number of value propositions to the customers. On one hand, the customers will at all time track the status of their goods. In this case, the application will offer information on the actual location and position of the goods, as well as the expected delivery timelines and locations (Clarysse & Kiefer, 2011). As such, this will have the value of increasing the customer confidence and trust on the safety and security on their products. Moreover, by providing a delivery timetable, the application will serve as a planning tool for the customers. For instance, the customers can select and book storage and warehouse space based on the projected delivery periods reviewed on a regular basis, in the event of any market delays.
In addition, the proposed application will create convenience. Currently, the offered products tracking services are based online, and often rely on the availability of computers. This is because a majority of the applications and software supporting them are incompatible with mobile operating systems. Therefore, the proposed application will go an extra mile. This is will be critical in ensuring that the customers can track the products status through their mobile phones. Thus, based on the above analysis, it is apparent that he proposed entrepreneurship application will benefit the customers through increased convenience and by serving as a planning tool for the delivery and goods arrival.
4.3 Team Analysis
The proposed business idea will require the establishment and use of a team in its development. The following table offers an analysis of the proposed teams for the idea
Financing Partners Team
This will be a cross-organisational team for DHL and other finances that will run the idea application development and management.
This will be the task charged with the actual application design and development.
4.4Financial Analysis and Sources of Finance
In order to evaluate the rationality of the proposed entrepreneurial business idea, this report offers a review of the venture business revenue model, as well as the proposed financial funding sources. In this case, a viable business idea is one that has the potential to generate enough revenues. The proposed DHL mobile tracking application will have two revenue models. On one hand, will be the subscription model. In this case, the customers will not be charged for downloading and installing the application on their mobile phones. However, they will be requires to pay monthly subscription fees. In this case, the model will be selected and mainly promoted to the regular users in the market.
As such, these are users who often have goods in transit and thus it would be uneconomical to charge per check on the goods in transit. The second revenue model will be the alternative for charges per check on the goods transit. In this case, the organisation will propose this revenue mode to users who send items maybe once in a month or less frequently. As such, for such a group category, charging the application on a monthly basis would be uneconomical, as they might not have products in transit in the respective months.
In order to develop the required DHL track it mobile application, the venture will require finances. One of the major sources of finances for the products will be the organsiational profits. Over the years, the venture has adopted a tradition of financing new product development and operations through ploughed back profits. This is a strategic measure and approach through which the business independence and operations sustainability is enhanced. In this case, through boasting the internal business operations, the organisation will reduce the risks of interests’ rates in the market. In addition, if the internal financial funds are insufficient, the venture will source funds from external sources (Schilling, 2012). In this case, the venture will source its funds mainly from financial institutions. However, it will seek to use project financing. The principles of project financing are hedged on the understanding that the cash flows from the project will be the basis through which the venture will peal back from its investments in the market.
Thus, the adoption of this approach serves as a security measure for the organisation. In this case, the approach will ensure that the venture other assets will not be held as collateral for the loans secured for the new application development. As a result, the adopted financing model will ensure that in the event that the venture proposed business failure will not impact on the organisation.
4.5 Stakeholder Analysis
In the development of any business idea and model, there are a number of involved stakeholders. One such stakeholder is the financing partners. In this case, the financing partners have a high interest and powers in the market. In this case, they yield power on the venture due to the huge funds invested in developing the new application. Similarly, they have a high interest on the Company due to the need to recover the invested funds in the new mobile application development and launch. A second category of stakeholders is the UAE government. The development of the mobile application and its subsequent use in the UAE creates a platform for the conformance to the existing rules and policies in the market. However, although the government has high power on the proposed idea, it has minimal interest as the industry and market is highly liberal with minimal government control and influence.
In summary, the report offers a review of the DHL company operations in the UAE. As such, the report establishes that increasing need for customers’ involvement creates a future business problem for the DHL Company in the UAE. As such, the report proposes the development of a mobile application to help customer track the domestic deliveries. It proposes a subscription and per check revenue and a project financing approach. Finally a stakeholder’s analysis reveals that the key stakeholders are the government and proposed financial partners.
Clarysse, B., & Kiefer, S. (2011). The smart entrepreneur: How to build for a successful business. London: Elliott & Thompson
DHL, (2015). Our Products. Retrieved from < http://www.dhl.ae/en.html > [15 November 2015].
Schilling, M. A. (2012). Strategic management of technological innovation. London: McGraw Hill.
UAE Internet Usage, (2015). Internet Usage Statistics. Retrieved From < http://www.internetworldstats.com/me/ae.htm> (15 November 2015)
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