Category: Innovation

Executive Summary

Innovation constitutes an important tool for enhancing competitive advantage for an organisation. Thus, when organisations assess innovation, they acquire the opportunity to make corrective measures to any growth strategies that hinder them from flourishing. This paper proposes diamond model, innovation chain model, innovation funnel model, and corporate ethics as potential plans for analysing novelty at Google China.

The analyses and discussions of these models are based on information that is derived from secondary resources. It is assumed that there are no new versions for these models. Therefore, the secondary information introduces challenges of invalidity and unreliability. The paper has the limitation of generalising its recommendations in different nations where Google has established operation. The focus is on Google China.

Introduction

Over the last 50 years, novelty has been considered an important driving force for economic and organisational growth. Technology and innovation are two hybrid components, which while embraced by manufacturing firms can help drive their productivity. In a business environment that is characterised by intense competition, originality is increasingly being considered a core competency that organisations must develop.

Companies that consistently innovate do not rely on chance. They address innovation in a systematic way. Fundamentally, novelty means the introduction of something that is new in a particular environment. In the business setting, modernism takes place when new products or services are introduced and successfully commercialised (Tidd & Bessant 2009, p.7).

However, even in the service sector, empirical research shows that originality has the ability to make organisations develop better quality and low-priced services (Dorner, Gassmann & Gebauer, 2011). Considering the merits of pioneering, its assessment becomes important to help an organisation determine its degree of innovativeness in relation to other organisations.

Purpose

The purpose of this paper is to assess novelty at Goggle China. The assessment is based on conceptual frameworks for assessing modernism in organisations that are drawn from a wide range of literature on novelty. Recommendations are offered on how Goggle China can assess its modernisation better to yield higher competitive advantage.

Background

Assessing modernisation enables organisations understand their status in innovation practices and clarify various needs on which it should focus to ensure better success. It also facilitates customisation of innovation programmes to address weaknesses in novelty practices. The goal of modernisation is to increase competitive advantage for any organisation.

Kanter (2006, p.75) contends with this assertion by adding that high profit margin expectations lure managers and leaders within an organisation to adopt blockbuster modernism thereby expending huge resources.

However, success of newly innovated services and products is unpredictable, and in some situations rare, in the marketplace. This situation suggests that the most appropriate novelty assessment model for Google China should address the underlying weaknesses in originality of products that suit the Chinese marketplace.

Scope

In the manufacturing context, modernisation involves the introduction of new manufacturing processes and practices, new technologies, and new materials among other things, which help lower the costs of production or increase the pace of production and quality of the manufactured products.

However, since novelty is evident in many companies, the scope of this paper is limited to Google China with reference to the aforementioned models.

Methodology

Research can be designed to deploy primary or secondary resources. The current research draws from a wide range of secondary data to propose a model for assessing Google Chinas modernism. The search is conducted through online credible libraries to identify articles that discuss models for novelty assessment within organisations.

Using these models, assessment of the companys modernism is conducted based on specific requirements for operation in the Chinese market. This situation makes it possible to draw points of consistency and inconsistency of the company approaches in novelty with the models.

Assumptions

In the analysis, it is assumed that the approaches followed by Google China in the development of its modernisation reflect the policies of Google Company, since it is one of its constituent companies. It is also assumed that some other recent models (not yet published so that their access is possible) do not outdate the discussed models.

Limitations

Researching on practices that are deployed by organisations to enhance competitive advantage such as novelty presents some limitations. In the case of global organisations, operations in different nations subject them to different policies and regulations.

Thus, the modernisation approaches deployed by Google in China may differ from innovation practices that are deployed elsewhere. This case makes the research possess limitation in the generalisation of the recommendations offered across all nations where Google has established its presence.

Frameworks

Existing research on modernism documents different models for assessing innovation in ICT-based organisations such as Google China, for instance IVC (innovation value chain), diamond model, and innovation funnel.

In addition, Martin (2010) proposes that assessment of innovation in an organisation can also be done in the context of compliance with various standard components of any groundbreaking activity that has high probabilities of success. This case presents a corporate ethical model for assessing novelty in an organisation.

Innovation Value Chain Model

Source: (Hansen & Birkinshaw, 2007)

Proposed by Hansen and Birkinshaw (2007), the model presents modernism as comprising four sequential stages, namely generation of thought, selection, translation, and the diffusion. The framework avails an end-to-end means of evaluating commercial gains for the firm by accessing and developing knowledge, creating originality, and commercialising the developed ideas to enhance its success.

It ensures an in-depth analysis of an organisations effectiveness through KPI parameters for assessing novelty as shown in appendix 1. The model may find applicability at Google China since it can be adapted to different levels within the organisation.

Application to the Organisation

The applicability of the value chain model to different sectors within an organisation makes it possible to assess the distribution of various innovative practices across many organs while at the same time comparing modernism at different organs that make an organisation.

This goal may be achieved more effectively by incorporating changes to the model proposed by Roper (2008) so that it provides room for practical interpretation and modelling of three major activities that are incorporated in the modernisation process, namely accessing knowledge, building originality, and commercialising modernism.

Collaboration in the process for knowledge generation and development of novelty may involve an organisations internal research and design, substitution, and/or complementation with external knowledge sources (Roper, 2008). The efforts made by Google China to gain access o knowledge can reveal its engagement in innovation activities.

Building originality entails transforming knowledge to ensure codification of modernism in the process and the development of new products or organisational forms. Modernisation is usually generated through collective action of work teams (Von Stamm, 2009, p.14).

Thus, assessing the extent of incorporation of multi-skilled workforce in areas of strategic focus may help reveal the levels of organisational commitment to modernisation. In the context of Google China, building originality may reflect intensities and rates of adoption of deferent types of innovation, both open and hidden forms of modernisation such as marketing activities.

Assessing novelty also requires evaluation of the extent of exploitation of modernism in enhancing sales gains and/or productivity. The model can help in assessing innovation at Google China by revealing its spending in IP protection and in building reputation to improve sales.

Diamond Model

As shown below, the diamond model has five main aspects of novelty assessment, namely product modernisation and technology strategy, idea-to-launch process management, portfolio management, climate, culture, and leadership, and new product performance.

Source: (Rugman & DCruz, 1993)

Application in the Organisation

Under this assessment criterion for novelty, Google China can consider three main issues, namely the existence of a strategic plan to foster originality, alignment of the plan with corporate strategy, and the presence of established mechanisms for ensuring effective implementation of corporate strategies (Tidd & Bessant, 2009).

Innovative services and products must serve the needs of customers. Thus, while assessing modernism in an organisation, it is important to consider the degree of flexibility and robustness in the processes that Google applies in developing new products and services. This degree may be assessed from the context of the ability of products and services to meet the needs of the customers (Tidd & Bessant, 2009). Thus, the degree of Google China to manage internal processes may reveal its originality.

Modernism thrives in an environment that fosters a free flow of ideas (Von Stamm, 2009). Evaluating whether management of Google China permits employees to communicate their ideas can help in assessing its innovativeness. In this extent, evaluation of the capacity of the organisational structure of the company to encourage or discourage modernism becomes crucial.

Innovative ideas emanate not only from an organisations internal stakeholder, but also from external ones (Von Stamm, 2009). Thus, the capacity of Google China to establish healthy and long-lasting relationships with suppliers, firms, academic partners, specialists, competitors, and even customers present higher or lower opportunities for nurturing innovative culture.

Learning determines the ability of organisations to instil strong and effective training and development programmes to ensure growth in knowledge and expertise of its employees as a strategy of creating an environment for modernisation.

Through evaluating Google Chinas learning programmes, its capacity to generate and garner information through linkages measures the degree of its novelty. Learning provides the pillar on which assessment of novelty in an organisation is conducted based on its capacity to share information on past failures and success stories (Tidd & Bessant, 2009).

Innovation Funnel Model

Funnel model has nine aspects or steps that can be used in assessing modernisation in an organisation. These are strategic thinking, portfolio and metrics, research, ideation, insight, targeting, originality development, market development, and selling (Tidd & Bessant, 2009, p.16).

In applying this model in assessing innovation at Google China, these steps can be divided into three separate major stages in the next sub-section on application of the model at Google China.

Application in the Organisation

The first step in weighing up novelty using innovation funnel model encompasses portfolio, metrics, and the strategy. This step defines modernisation inputs such as scope, structures, and the context of the change that is necessary for its creation (Tidd & Bessant, 2009).

Step 2 involves the novelty processes such as research, insights, development of ideas, targeting, originality development, and the process of developing markets. Step 3 considers outputs. This step implies that any innovative activity must generate economic gain for Google China. These process interactions among various players within the organisation are important.

Corporate Ethics Model

Corporate ethics model considers the capacity of an organisation to follow various novelty rules.

Martin (2010) defines these rules as interventions made by an organisation to ensure a positive reception of modernisation, impacts of novelty on people, and impacts of people on transformation, the disruption of status quo, the shared responsibility of reconstruction, the capacity to enhance continued modification, and features of the innovated products and services.

Apart from revealing the innovativeness of an organisation, this model also provides a means of analysing the effectiveness of innovation of Google China.

Application at the Organisation

At Google China, novelty brings about change. Thus, corporate ethics model constitutes one of the important mechanisms of assessing it. The model highlights the necessity for integrating various environmental dynamics within organisations to yield success for an organisation in the long term.

Critical Analysis

Gaps Identified

Models for assessing novelty within an organisation seek to establish the necessary areas of improvement or gaps upon the development of better processes, restructuring an organisations development strategic plans, incorporation of training and development, and establishing relationships among other concerns.

Through gap identification, it becomes possible to recognise mistakes that may hinder novelty such as impulse to struggle innovation with tight controls such as the same planning, budgeting, and reviews applied to the existing business (Kanter, 2006, p.76).

Google China has gaps in modernisation in terms of development of products that have the capacity of penetrating into the burgeoning cell phones market in an effort to foster higher growth in sales, as an essential output for novelty as suggested by diamond model. Google China also experiences competition in the advertising industry from other organisations such as Facebook and other social networks.

Strengths

Irrespective of the model that is deployed to assess innovation within an organisation, the focus should be on utilising opportunities and strengths to overcome weakness and threats. Google China has established a central position on the search industry. It holds the highest share in the market of more than 60%. China is also experiencing an immense growth in android applications.

Through Smartphone, android applications make it possible to access many of the Google products. The company has low acquisition costs in comparison with revenues. The advancement of Google chrome encompasses one of the major achievements of the company with the capacity to enhance its dominance in the Chinese market in comparison with its competitors such as Yahoo.

Although Google China has the pressure to develop more innovation to participate competitively in the changing technological world, based on corporate ethical model and funnel model, it evidences the presence of innovation. From the context of funnel model, an organisation must utilise its resources to enhance the development of new products and services (Tidd & Bessant, 2009).

Google China values its people as an important source of competitive advantage through improvement of new products and services that meet the needs of the Chinese market.

This claim implies that the process of modernisation incorporates the needs of the target market to ensure a positive reception of the products. In this context, Martin (2010) insists that unlike Yahoo, Google Company took much time to evaluate strategies for designing its search technology to ensure it complies with governmental regulations.

Weaknesses

Assessing novelty in an organisation from the context of innovation value chain model requires the investigation of an organisations capacity to access knowledge, build originality, and commercialise it (Hansen & Birkinshaw, 2007). Accessing knowledge requires interaction with internal and external stakeholders to identify possible areas of transformation, which can help build the success of an organisation.

This concern reflects the need to develop products such that they influence communities in a positive way (Martin, 2010, p.24). In this extent, Google Chinas innovativeness becomes evident if it has derived strategies to minimise the impacts of weaknesses of its products to receive a negative reception by the communities that consume them.

The major weakness of Google China is the lack of incredible appearance on social media, especially upon considering that the trend on search advertising is on relying on social media to communicate to communities that consume such products and services.

Yahoo Company released a bloggers name in an effort to comply with Chinese authority requirements on censorship. This provided evidence that was required in sending the accused person to prison.

Consequently, its penetration in the Chinese market became problematic. Using the innovation strategy for putting in place a mechanism of enhancing positive reception by the community, Google China decided to maintain personalised information, especially with relation to e-mails and weblogs within a database situated outside China.

Hence, amid its weakness in the Chinese market, this innovative idea has translated into the immense dominance of Google China in the Chinese market.

Recommendations

Innovation is the only tool for ensuring that an organisation acquires a competitive advantage. For the Google Company, modernisation is recommended as a critical element in the endeavour to increase the ability to address the various needs of more diverse Google customer base. One of the principal mechanisms of nurturing novelty should involve integration of people in the innovative design processes.

For example, Google can gain from the various viewpoints of its diverse workforce in the effect that such a workforce provides increased problem-solving capacities, which lead to advancement of new products and services. This recommendation is critical for the success and performance of the organisation in the future unknown dynamic business environment.

The fact that the company embraces principles of corporate ethics, apart from their application with success in the Chinese market, it should also consider applying them in the development and customisation of products to suit other markets.

Such strategies can ensure that the organisation is always a preferred choice among its target markets. In this context, a hybrid of the corporate ethics and diamond model for assessing modernism is recommended.

Conclusion

Innovation and creativity are crucial in gaining a competitive advantage in the modern dynamic market that is characterised by influx of many products and services. Google China accepts that improvement cannot be negated while producing products, which always hit in the marketplace.

Hence, assessing this novelty is of paramount importance. An organisation can only measure its extent of modernism through the deployment of various models of gauging innovation. Four of these models were discussed in the paper together with their applicability at Google China.

Reference List

Dorner, N., Gassmann, O., & Gebauer, H. (2011). Service innovation: why is it so difficult to accomplish? Journal of Business Strategy, 32(3), 37-46.

Hansen, M., & Birkinshaw, J. (2007). The Innovation, Value Chain. Harvard Business Review, 85(6), 87-98.

Kanter, R. (2006). Innovation: The Classic Traps. Harvard Business Review, 84(11), 72-83.

Martin, K. (2010). Innovation, Ethics and Business. Sidney: Institute for Corporate Ethics.

Roper, N. (2008). Modelling Innovation Value Chain. Research Policy, 3(1), 45-53.

Rugman, M., & DCruz, R. (1993). The double diamond model of international competitiveness: Canadas experience. Management International Review, 33(2), 1739.

Tidd, J., & Bessant, J. (2009). Managing Innovation: Integrating Technological, Market and Organisational Change. The International Journal of Educational Management, 21(1), 6-25.

Von Stamm, B. (2009). Leadership for Innovation: what can you do to create a culture conducive to innovation? Strategic Direction, 25(6), 13-15.

Appendix

Overview

Kinsmen Sports Centre has been known as the sports facility and the organization providing the related services. Although Kinsmen Sports Centre has been doing relatively well since its opening, it has started facing certain issues recently; particularly, a drop in attendance of some of the companys services has been noted. Despite being generally positive, the data retrieved in the course of the analysis has also displayed a rather disturbing tendency for the customers to avoid certain services provided by the organization; it is suggested that the lack of efficient communication is to blame for the recent changes in the customers attendance.

Customer Survey

It is desirable that the customer survey should be introduced into the NPS framework; thus, the provision of the services of a higher quality will become possible. Indeed, the results obtained in the course of the analysis have shown that the company lacks efficient communication with the customers. The specified feature of the companys operations can be viewed as a major flaw of the information management approach, which is currently used in the organization.

The introduction of a customer survey into the design of the firms interactions between the staff and the clients, as well as among the staff members, will contribute to developing a faster response towards the changes in the environment of the target market. Despite the fact that the current satisfaction rates are quite high, as the recent reports shows, there is a strong need to improve the feedback system, as the dissatisfaction rates have grown compared to the data retrieved in the course of the previous assessment.

As the results of the aforementioned report say, the issue with the system of booking, which the company uses as the basis for its operating framework, leaves much to be desired. Because of the inconsistent communication process, the requests sent by the customers are often confused or left unattended; therefore, the dissatisfaction rates are growing, and the amount of customers complains is getting increasingly big. More importantly, the variance of the revenues retrieved by the company and, therefore, the satisfaction of its clients, has grown, which proves that the customers feedback has become harsher.

The latter changes can be attributed to the fact that the company pays very little attention to the feedback provided by the clients. Indeed, a comparative analysis of the revenues, which the company has been receiving over the past few years, shows that the variance percentage of the companys income has grown to 60%. While the variance of the attendance is not as high as the one related to the organizations income, the fact that it has reached 12% also shows that the organization needs to redesign its approach towards communication with the customers.

Customer Lifetime Value

While the attendance rates can be viewed as moderate, the company may experience the need enhance the strategy for increasing customer satisfaction. Thus, the Kinsmen Sports Centre will benefit from an increase in the number of loyal customers and may attract even more clients. Seeing that rearranging the existing customer support strategy will take time, it will be reasonable to offer the current customers, as well as the target audience in general, an incentive for using the companys services. To be more specific, the design of the customer lifetime value model must be incorporated into the companys operations.

Moreover, the above-mentioned strategies in retaining the existing customers and attracting new ones can be used as the tool for increasing the customer lifetime value of the organization. As the statistical data provided in the reports shows, the attendance rates for different facilities in the Kinsmen Sports Centre were strikingly different. The ones that the programs designed by the organization were supposed to deliver happened to be the lowest ones, landing at the zero mark. Consequently, it can be suggested that the quality of the programs, as well as the services, which they have to offer to the clientele, should be improved according to the feedback received from the latter.

The membership rates, on the contrary, made the highest attendance rates, peaking at 11%; this means that the Kinsmen Sports Centre should consider promoting the membership to other denizens of the target audience. Herein the necessity to enhance the existing communication tools and rearrange the communication strategy lies. In order to facilitate a fast and efficient acquisition and transfer of data, the latest information technologies, including modern social networks, should be utilized.

The customer lifetime value of the company will be calculated in accordance with the following formula: sales average value multiplied by the number of repeated transactions and the average retention time for an average customer (either in months or in years). While the formula in question can be considered rather generic, it will still provide an opportunity for comparing the amount of customers, which the company used to have prior the introduction of the new strategy, and the amount of clients, which the company has gained after the integration of the new communication approach into its operational framework.

Introduction

Humans have always endeavored towards achieving some degree of creativity in whatever they engage in. For any organization that aims at achieving reasonable performance, innovation must be at the heart of its strategies.

Some hold that the capacity to harness intellectual and social capital and to convert that into novel and appropriate things; has become the critical organizational requirement of the age (Reid and Brentani, 2008, p. 562).

A flurry of interest in creativity and innovation in the workplace has occasioned an abrupt shift to knowledge economies. This paper uses different theories and models to show why development of innovation and creativity in an organization may be considered arguable.

Creativity

Creativity can be defined as the development or generation of new ideas or concepts while innovation can be referred to as the application of a developed idea (Drucker, 2010). Creativity is a mental process and plays a major role in innovation process. Creativity requires interest and much commitment. It may include generating new concepts and ideas, and discovering solutions to existing problems.

To an organization, creativity may be referred to as risk taking. Employees may take creativity to be an opportunity to learn more skills (Reid and Brentano, 2008).

To develop creativity, organizations need to train leaders and managers on new skills. The people who are involved in the innovation process should be coached, and the organization should also adapt to initiatives that will help change the culture. Leaders and managers need to adopt creativity if they need their organization to be competent.

Innovation

Innovation seeks to actualize a created idea or concept through application of workable procedures and processes.

In an organization, innovation can be viewed in three different perspectives, that is, service or product innovation in which the organization may seek to create different products or services to enhance their productivity; operational innovation (this is the idea of an organization working to improve on how given procedures and processes are undertaken), and business model perspective.

Essentially, organizations aim at restructuring the financial model. This may be done in cases where costs need to be reduced (Gupta and Wilemon, 2010).

For innovation to be effective, organizations have to work on measures that can ensure that creativity is fostered. This can be achieved by introduction of team work where all the members of the team are allowed to exploit their talents (Reid and Brentani, 2008). With team work, people work in close collaboration.

This helps in acquisition of new skills and exchange of knowledge and ideas. Creativity and innovation is a major part of an organizational growth. It helps an organization by enhancing productivity (Kanter, 2010).

Model of creativity and its organizational application/critical evaluation of the model

According to Teresa Amabiles theory of creativity, a good model of creativity should include expertise, creative thinking, and task motivation. All of these three components are important in any given area of creativity (Mumford and Licuanan, 2008). Any creative work depends on expertise.

This component comprises of things like talents of the workers, their technical skills and knowledge of the tasks they handle.This component is important in solving problems in an organization.

In a bioengineering organization, the engineers may be required to have knowledge on how to design new medical equipments for diagnostic and therapeutic purposes, set up and maintain biomedical equipment, test the effectiveness, efficiency and safety of equipments, provide analysis of the patient data via the computer, diagnose and interpret bioelectric data using signal processing techniques, measure and monitor physiological systems.

The bio-engineer is expected to familiarize with past bioengineering developments which are essential in perfecting the assigned tasks. The engineer is also expected to check on potential developments of the bio-engineering field. Creativity and innovation may fail to develop in such an organization when the engineers fail to perform to the best of their talents.

The engineers may not be willing to spend time in analyzing and checking for the past and future developments in the field. In cases where the engineers are not assigned tasks on the basis of their talents and skills, the outcome of their processes and procedures may not be effective. The engineers may also find it hard to acquire the new skills required in the assigned section and thus their creativity is hindered.

Acquisition of new skills in the bio-engineering field may require training, if the organization is not ready to facilitate the training, the engineers will not be able to acquire the new skills. In this case, innovation is hindered. Cases may occur where the trained bio-engineers fail to practice the acquired skills.

As a result, their work lacks efficiency. Creative thinking is essential if an organization is to develop its creativity and innovation. This is a more personal related component since it focuses on the self-discipline of the workers, their will in taking risks, their perseverance and their independence (Gupta and Wilemon, 2010).

Creative skills supplement expertise. These creative skills require a worker to take a new look on problem solving and application of certain techniques to explore new methodologies of performing tasks. In order to achieve creativity, a worker needs to work passionately and make the working environment conducive for the accomplishment of the assigned tasks (Nonaka and Nishiguchi, 2010).

In a bio-engineering organization, a bio-engineer should be able to think far beyond the expectation of common experimental results, that is; the engineer should be able to allow variation of the results from the norm. When the results of an experiment do not fall in the normal category, the engineer should be able to visualize the cause of the deviation rather than force the results to suit the expected outcome.

When analyzing data from different procedures, an engineer should not only stick to the normal methods used. In its place, the engineer should try and apply new programs that might bring about the same result in a more efficient way.

Instead of producing related data with different programs, an engineer should think of one program that can be able to handle all correlated data at once. An engineer should also be able to devise ways in which machines can work collaboratively when performing related diagnostic procedures.

Creative thinking may be a challenge to many engineers based on the fact that many of them have become accustomed to the norms of their work. Engineers may not be willing to take risks regarding new perspectives of experiments due to the fear of the outcome. Engineers may prefer handling related tasks separately rather than collaboratively since the workload may increase.

In such circumstances, creativity and the innovation of an organization are compromised. Expertise and creative thinking should be supplemented with task motivation if creativity and innovation is to be developed. Task motivation determines what the employee will do.

This component of motivation may be viewed from two viewpoints, that is; extrinsic motivation (this type of motivation is driven by incentives that an employee receives on attaining a given goal); and intrinsic motivation (an employee is driven by personal interest of knowing more.

It is more of a personal challenge since the employee strives to enjoy the tasks and find fulfillment in what they do). Intrinsic motivation plays a major role in creativity and innovation (Montoya-Weiss and ODriscol, 2009).

Employees who are driven by extrinsic motivation may tend to fix procedures just to achieve the expected target. Most organizations reward their employees who perform well in implementing certain ideas and concepts.

Most employees will fix procedures to attain particular goals that can be rewarded. With this mentality, workers will prefer working the fix it way instead of doing the right thing. The fix it  way may cost the organization a great deal since it may only work in the short term but not in the long term (Kanter, 2010). Such practices offer a big challenge in the development of creativity and innovation in organizations

In a bio-engineering set up, an engineer should strive to enjoy the assigned tasks and do them with ease. Creativity and innovation may not be developed in cases where the engineers are seeking to outdo others. The managers also play an important role in ensuring that employees remain motivated. Managers who reward their employees will achieve much.

Most organizations are not ready to incur extra cost in rewarding their employees. In such cases, the employees will not be motivated to work hard. Even though they may have the required expertise and creative, they may not exercise them accordingly (Drucker, 2010).

Conclusion

For creativity and innovation to be developed, all stakeholders of an organization should be at their best both at individual and collaborative level. The workers in the organization should be willing to exploit their talents and be willing to explore new ideas.

The managers should be able to provide a good environment that will enable the workers to work efficiently. They should also be able to facilitate the implementation of new ideas (Eisenhardt, 2009).

References

Drucker, P. F., 2010. The Coming of the New Organization. In Harvard Business Review on Knowledge Management, 21 (3), pp. 1-20.

Eisenhardt, K. M., 2009. Agency Theory: An Assessment and Review. The Academy of Management Review, 14 (1), pp. 57-74.

Gupta, A. K. and Wilemon, D. L., 2010. Accelerating the development of technology- based new products. California Management Review, 32 (2), pp. 24-44.

Kanter, R. M., 2010. When a thousand flowers boom: Structural, collective, and social conditions for innovation in organization. Research in Organization Behavior, 10 (3), pp. 169-211.

Montoya-Weiss, M. M. and ODriscoll, T. M., 2009. From experience: Applying performance support technology in the fuzzy front end. Journal of Product Innovation Management, 17 (2), pp. 143-161.

Mumford, M. D. and Licuanan, B., 2008. Leading for innovation: Conclusions, issues, and directions. Leadership Quarterly, 15 (1), pp. 163-171.

Nonaka, I. and Nishiguchi, T., 2010. Knowledge emergence: Social, technical, and evolutionary dimensions of knowledge creation. Oxford: Oxford University Press.

Reid, S. E. and Brentani, U., 2008. The fuzzy front end of new product development for discontinuous innovations: A theoretical model. Journal of Product Innovation Management, 21 (2), pp. 170-184.

Introduction

The concept of innovation has increasingly become very important to firms in the modern society. Market competition has become stiffer than it ever was, and firms are now under pressure to come up with ways of managing such competition. According to Lewis, the only way that firms can manage competition is by coming up with unique ways of productions and product delivery methods in the market which are superior to that of the competitors (43). This means that firms have to embrace innovation. Innovation is defined as coming up with alternative ways of addressing tasks that lowers the cost and improves efficiency. It involves going beyond the conventional methods to come up with new approaches that embrace emerging technologies to improve efficiency and effectiveness in service delivery.

Darden Restaurants is a leading American restaurant that has its headquarters in Orlando, Florida. It was founded in 1938 by William Darden under the name Green Frog. In 1968, he changed the name to Red Lobster Inn as it expanded to other towns within Florida. The name Darden Restaurant was adopted in 1995. According to Pasiuk, this firm has experienced a unique growth ever since it was founded (78). The company has grown to become one of the Fortune 500 firms, employing over 200,000 employees across the United States. It has slightly over 1,500 food outlets located in different parts of the country.

The restaurant offers a wide range of products to its clients. Despite this success, Darden Restaurant faces very stiff competition in the market. The industry has become flooded by new entrants, some of which target specific market segments, posing serious risks to established firms such as Darden Restaurants. These new entrants are relatively small and flexible in their operations, enabling them to pose serious competitive threat to large entities that may not be as dynamic as they are in managing environmental changes. In this paper, the researcher will critically analyze innovative performance of Darden Restaurant.

Innovation Strategy of the Firm

The restaurant industry in the United States is one of the most competitive industries dominated by large and medium-sized firms. Darden Restaurant has been forced to operate under such a competitive industry and based on its performance over the past decades, it is clear that this firm has been successful. According to Reid and Bojanic, achieving success in a highly competitive market requires an innovative strategy (45). It requires a strategy that other market rivals do not use. Being innovative means coming up with unique ways of undertaking normal tasks to achieve supernormal results (Smart 11). This is the exact effort that this firm has been putting in place in order to achieve the much desired success. In order to understand the innovative strategy that the firm has been using, it will be necessary to look at its core competencies, strategies, and its approach when responding to emerging threats and market opportunities.

Core competencies

It would be necessary to look at the core competencies of Darden Restaurants in order to understand what the firm is doing differently compared to its competitors that is enabling it to gain competitive edge in the market. According to Reid and Bojanic, core competencies focus on how a firm harmonizes a combination of skills and resources to achieve uniqueness in the market (38). Darden Restaurants core competencies can be looked at from three different perspectives.

The first perspective is the firms unique ability to access a wide market through delivery of a wide range of products. According to Enz, the stiff competition in the food industry has forced many firms to specialize in their product delivery (61). They believe that specialization enables them to deliver high quality products to a specific market segment, thus meeting their needs in a special way. Darden Restaurant uses a completely different strategy. The firm has established different units within its food outlets that specialize in different market segments. For instance, in each of the restaurants of this firm, there are units that specialize on foods popular among children, adults, and the aging population.

There are also units that target vegetarians and other people who are keen on healthy eating. Each unit is expected to understand the target market segment and to provide products that meet their specific needs. This way, all the clients who visit the restaurant will get what they need. This has made the restaurant with American families. These families know that individual needs of children, youths, and adults will be fully met at this food outlet. The ability of this firm to offer variety of products to its clients is unique. It has earned it a name in the market, strengthening its brand.

The management of Darden Restaurant has been keen to ensure that its end products meet the need of the clients in a unique way. According to Lewis, there has been a massive change in the production approach of companies from what it used to be in the past (74). Darden Restaurant was founded in 1938. At this time, competition in the market was very low. In fact, customers had to accept what was presented to them as long as it relatively met their needs because they had limited choices to make. In the food industry, specialization was something that was rare. Firms focused on providing foods that were popular among American families. However, this trend has changed as firms find themselves under pressure to manage market competition.

Clients now have numerous choices to make whenever they want to visit a food outlet. Darden Restaurant has mastered the art of meeting the needs of its clients in the most unique manner. The firm has invested heavily in research. Each of the units discussed above always have a budget for them to conduct research and understand the changing customer needs and preferences. This has enabled these units to understand the changing trends in the industry and how these trends can be managed. The firm has remained very responsive to the changing customer needs in the food industry. This is one of the major reasons why the firm has remained successful in an industry that has become very competitive.

According to Enz, for a firm to gain competitive edge in the market, it must always come up with strategies which cannot be easily imitated by the market rivals (55). This is another reason that has enabled Darden Restaurant to remains successful in the market. The firm has developed unique strategies that its rivals have not been able to imitate easily. For instance, at a time when many restaurants are specializing on specific products or market segments, this firm has come up with a unique business design that enables it to offer a wide variety of products in the most unique way possible. Other firms would avoid such strategies because of the financial implications involved and the need for specialized workforce. However, the strategy is working for Darden Restaurant.

Innovative strategy

The innovative strategy that Darden Restaurant uses is based on having individual specialized units within the restaurant to offer a wide variety of products in the most unique way possible. The specialization strategy has enabled the firm to continue offering products that target the entire market, but with specific focus on individual markets. The strategy has promoted development of each units based on the emerging market needs in each of the market segments. As Lewis notes, Darden Restaurant is one of the few outlets that one can be assured of getting a wide variety of food items that meet specific needs (84). Many other food outlets are now moving towards more specialized market segment as they try to strengthen their positions in the segments they believe they have the best capacity to deliver the needed products.

How the firm responded to historical threats and opportunities

The ability of a firm to respond to threats and opportunities in the market always dictate its success. Darden Restaurant has developed a unique approach of responding to market threats. For instance, the 2008 economic recession affected so many firms in the United States, but this firm developed a unique approach of dealing with this threat. In each of the units, the firm started offering low-priced products to attract clients who were suffering from the financial down-turn.

The variety of products that this firm offers in the market has also enabled it to deal with the threat of new entrants and substitute products. The strategy has enabled it to remain very competitive in this industry. The firm has also been effective in terms of responding to opportunities. This can be seen by analyzing its historical growth. This firm has been keen on acquiring struggling but strategically located firms. Long Horn Steakhouse, Bahama Breeze, Season 52, and The Capital Grille, are some of the firms that were acquired by Darden Restaurant as it expanded its operation within the United States market.

Sources of Innovation the Firm Has Used

Darden Restaurant has remained very innovative in the market, always keen to understand and meet the needs of its clients. One of the main sources of innovation at this firm is extensive research. The management of this firm has embraced regular market research as the only way of understanding the changing needs of customers. The firm has invested heavily in research over the past few years to understand the dynamism of the market and how it can be managed. The research has paid off because most of the successful innovative strategies used by the firm were informed by these researches.

The employees of this firm have also been a rich source of innovation. According to Pasiuk, employees are always in the best position to come up with new ways of doing what they do in a different way that can create a positive difference (112). The firm has created a good environment for all its employees to come up with innovative ideas of undertaking their tasks. From chefs to waiters and waitresses, the firm has been encouraging all the employees to be creative. The firm has a system that it uses to develop ideas into strategies that can be applied to bring positive change. Highly innovative employees are always rewarded for their extra effort, a move that has motivated many employees to be as creative as possible when undertaking their duties.

The firm has also been using benchmarking as a way of being innovative in its operations. According to Smart, it is important for a firm to compare its operations with that of other market rivals (56). Sometimes it may be necessary to borrow strategies used by the competitors if they are delivering better results than what the organization is getting. At Darden Restaurant, the management has been keen to borrow best practices from other firms in order to improve its operations in the market.

Processes used to scan, select, finance, and implement the ideas

Darden Restaurant has an idea incubator that is meant to develop ideas that employees come up with into projects or systems that can improve efficiency of the firm. The incubator uses eight steps to scan the ideas, select appropriate ones, and provide resources to develop and implement these ideas. The figure below summarizes these steps.

The first step is idea generation. All employees are encouraged to be innovative in their respective areas of work. Whenever an employee comes up with a new idea, he or she will have to discuss it with fellow employees before taking it to the panel of experts within the firm for the screening stage. The screening process basically involves determining the viability of the idea and its ability to achieve a given goal. If its viability is confirmed, it will move to the next stage of concept testing. If the idea was about coming up with a new product, a sample will be made to determine if it can meet the expectations of the targeted clients. If it passes this stage, it moves to business analysis stage where a team of experts will conduct a cost-benefit analysis to determine if indeed the firm will gain economic benefit from such a venture. The idea will go to the next stage of product development.

The firm will develop a number of products based on the new idea to determine if it has the capacity to deliver the expected value as defined by the new idea. If this is a success, then the next stage will be test marketing. At this stage, a sample of products is availed to selected customers to determine their reactions. Test marketing helps in confirming whether or not the intended market would accept the product. It avoids cases where a firm commercializes a product that does not meet the expectations of the customers. Such an attempt may not only lead to serious financial loss but also customer dissatisfaction. If test marketing is successful, the firm will then commercialize the idea by producing the products in mass. The final stage is a review of the performance of the product in the market to determine if it is achieving the set objectives.

Organizational structure/culture and how it has affected innovation

According to Porter and Norton, organizational culture refers to practices promoted by the management and embraced by employees that define how they relate to one another and how they approach their tasks (67). At Darden Restaurant, one of the prominent practices that have been common is teamwork. Employees of this firm cherish working as a unit. This has promoted innovation in this firm because employees get to share and develop new concepts that can help the firm achieve its strategic vision. The management has also been successful in promoting a culture where everyone appreciates diversity of the workforce.

The firm employs people from various backgrounds. The diversity has never been an issue. Discrimination based on race, religion, gender, or any other demographical factors have been curbed. This culture has promoted unity and strength within the workforce. It has been a positive force that has enabled this firm to be very innovative. Instead of spending time on issues about race and religion, employees utilize their time trying to come up with better ways of handling their tasks. The reward system has also promoted creativity among the employees. They know that for every idea that they come up with, there will always be a reward as a way of encouraging them to be more creative.

How the firm has demonstrated learning regarding innovation performance

This firm has demonstrated learning regarding innovation performance in different ways. First, developing an idea incubator is a clear demonstration that this firm has learnt that ideas must be nurtured in order to turn them into successful projects. The management has also learnt that employees are the richest sources of innovative ideas. That is why it has created a compensatory system to reward innovative minds. The firm has also learnt that innovation involves change. Change must be implemented in a systematic manner, and one of the best theories of change that is common within this firm is shown in the figure below.

This model emphasize on the need to prepare all the stakeholders when planning to introduce change in a process referred to as unfreezing. To unfreeze, the management should explain to all the stakeholders why the new system needs to be changed, and the benefits that the new system shall bring. Above all, the process aims eliminating the fear of the unknown among the stakeholders to make them more receptive towards the new system. When the management is convinced that everyone is ready for the change, then the new system should be introduced. The final stage is to refreeze where the newly introduced concepts become integral part of organizational culture. This model helps in minimizing resistance to change that is always common if stakeholders are not properly prepared for it.

Conclusion

Darden Restaurant is a successful company that has been in operation since 1938. When it started its operations, market rivalry was relatively low. However, things have changed in the modern market following the emergence of new firms into this industry. In order to remain competitive in the market, this firm has embraced creativity and innovation in its operations. It has exhibited innovativeness in its production strategies and product delivery methods. At a time when other firms in this industry are narrowing their line of products, this firm is increasing its product lines to capture more customers in the market.

Works Cited

Enz, Cathy. Hospitality Strategic Management: Concepts and Cases. Hoboken: John Wiley & Sons, 2010. Print.

Lewis, Pamela. Management: Challenges for Tomorrows Leaders. Mason: South-Western, 2007. Print.

Pasiuk, Laurie. Vault Guide to the Top Hospitality & Tourism Industry Employers. New York: Vault, Inc, 2005. Print.

Porter, Gary, and Curtis Norton. Financial Accounting: The Impact on Decision Makers. London: McMillan, 2014. Print.

Reid, Robert, and David Bojanic. Hospitality Marketing Management. Hoboken: John Wiley & Sons, 2010. Print.

Smart, James. Darden Restaurants Brands. New York: General Books, 2010. Print.

Companies with Strong CRM

CRM is strong in Amazon with its quick service, protection of the customers rights, attentive attitude to feedback, quality control, and convenient website (Green, 2009). The same can be said about McDonalds; its websites that are customized for different groups of customers (for example, children or Asian) are worth mentioning (Rai, 2013).

Companies with Most Successful Advertising Campaigns

The 80s Just Do It advertising campaign of Nike defined the brand image (one proclaiming the love for sport and ambition) and made it popular all over the world (Schermerhorn, 2010, p. 20).

Another extremely successful advertising campaign is Get a Mac by Apple that consisted of the comparison of Mac and PC as well as Apple and Microsoft. The campaign was characterized as culturally influential, increased the market share of Apple by 42% and earned the 2007 Effie Award in 2007 (Dahle
n, Lange & Smith, 2010, p. 24).

Companies with Strong Innovation Culture

Google Inc. and Microsoft have always been among the most praised leaders in innovation, which is partially explained by the specifics of IT industry. Indeed, unless they continuously innovate, these companies will lose their prominent positions in the rapidly developing market. Naturally, both Google and Microsoft are investing in research and development (R&D), but it must be pointed out that the most innovative companies have never been the ones to spend the most on innovation (Korn, 2011).

Actually, Microsofts Chief Information Officer (CIO) points out that the IT companies tend to innovate more effectively and intensely while allocating relatively meager budgets in this direction (Daniel, 2008, para. 4). Investing in innovation does not guarantee success; instead, innovative culture needs to be built, and the two companies have their understanding of this phenomenon.

The Senior Vice President of Googles People Operations is certain that the success of the company results from innovating. In Googles view, the key to innovation consists in empowering its employees and providing them with channels for expression and communication (He, 2013, para. 4). These channels include, for example, Google Cafes meant for work and play or Google Universal Ticketing Systems meant for problem-reporting. Any employee can write e-mails to top managers, and the system called Google Moderator allows posting questions and voting for them to be answered sooner. Similarly, weekly TGIF is a meeting meant for direct conversation between employees and top managers. Google believes that such an environment spurs innovation (He, 2013, para. 17).

Microsofts CIO agrees that it is important to create the opportunity for innovation: the company does its best to provide the employees with the necessary environment, tools, and incentives (Daniel, 2008). At the same time, the company attempts to balance the creativity of its employees by exerting control through clear and concise guidelines. Apart from that, any innovation has to pass the final test: offer a positive answer to the question does it really matter.

Microsoft distinguishes between innovative and different and demands the same from its employees. Apart from that, the company encourages the innovation of product, business model, and policy (Wunker, 2015, para. 4). Such an approach is opposed to the more popular product-based innovation. As a result, for example, the company managed to introduce Office for iOS and Android: a reasonable marketing decision that promotes the product among the users of other OS.

To sum up, both companies recognize the importance of innovation and consider innovation culture to be the foundation of their success. While funding is necessary, both organizations highlight the importance of creating an innovation environment and providing the employees with an opportunity to innovate. At the same time, the companies appear to focus on different aspects of innovation culture building. Indeed, Googles approach seems to be particularly concerned with producing ideas in larger number. Microsoft, on the other hand, stresses the necessity to set the right direction for these ideas. It can be concluded that the methods and specific goals of innovation culture building can be customized to the needs of different companies, but its importance and effectiveness cannot be denied.

References

Dahle
n, M., Lange, F., & Smith, T. (2010). Marketing communications. Chichester, U.K.: John Wiley & Sons. Web.

Daniel, D. (2008). Microsofts Culture of Innovation: An Interview with CIO Tony Scott. CIO. Web.

Green, H. (2009). How Amazon Aims to Keep You Clicking. Bloomberg Business. Web.

He, L. (2013). Googles Secrets Of Innovation: Empowering Its Employees. Forbes. Web.

Korn, M. (2011). Top Innovators Rank Low in R&D Spending. The Wall Street Journal. Web.

Rai, A. (2013). Customer relationship management. New Delhi: PHI Learning. Web.

Schermerhorn, J. (2010). Management. Hoboken, N.J.: John Wiley & Sons. Web.

Wunker, S. (2015). 5 Strategies Big Businesses Use To Build A Culture of Innovation. Forbes. Web.

Learning can be described as the act of acquiring skills, knowledge, opinions and attitude. On the other hand, innovation is the ability to devise or come up with unique products, ideas, or methods of production. In most instances, major strides in economic development cannot be achieved in the absence of innovative ideas.

Additionally, both learning and innovation may not yield positive outcomes in the absence of good planning. It is pertinent to note that learning is a multidimensional construct. As such, it has been largely used as a process of improving the acquired skills and knowledge that are required in running organizations.

Empirical studies have demonstrated that good planning usually results into innovation and organizational leaning. The latter are key concepts that influence the performance of organizations positively. Learning and innovation within a business entity are usually enhanced by good organizational planning.

Therefore, they are directly associated with organizational performance. It is critical to indicate that several organizations often anticipate devising new strategies that can enable them to attain the much needed competitive advantage.

Moreover, latest transformations that have taken place within the business world has reinforced the importance of cultivating good planning in order to attain organizational learning and innovation.

Most of the conventional strategies often lose their effectiveness. In addition, employing the concept of professional organizational planning can significantly be helpful in overcoming various weaknesses and threats facing a business enterprise.

As such, good organizational planning should entail the adoption of new skills that can boost future performance in a business entity.

There are quite a number of business scholars who attest to the fact that learning and innovation are part and parcel of vital parameters required in the development business enterprises.

In fact, some economic scholars have reiterated that adequate learning and innovative capabilities in an organization largely rely on proper organizational planning. When good planning is given a top priority, it will definitely improve competitiveness and performance of a firm.

Some past research studies have demonstrated that the only way to implement new ideas (innovation), services, processes and products is by developing shrewd planning strategies in all spheres of business development.

On the same note, experimental results have indicated that lack of good organizational planning learning and development may grossly influence performance of a firm.

This type of influence may be both directly and indirectly. From a conceptual framework point of view, the application of integrative models of learning in business entities can indeed enhance growth and development. Such conceptual frameworks may not be realized if sound and professional planning is not put on board.

Moreover, innovation usually comes in form of new ideas. However, when proper planning is not put in place, even the so-called new ideas may simply jeopardize the operations of a business organization.

For example, generative organizational planning enhances positive transformation of culture, belief systems, personal or social values, policies, objectives as well as business tactics. In this regard, it enables the analysis of previous operations in order to propagate change that is transformational in nature.

Besides, this category of learning poses a great challenge to the present status of a business entity in order to improve organizational performance.

Good organizational planning also fosters adaptive learning. The latter is inevitably a critical model of learning bearing in mind that it stimulates the establishment professional planning strategies that can significantly assist a firm to cope with both the active and passive operational challenges.

It is notable that there are abrupt changes that usually take place in organizations. Such unplanned and abrupt changes may significantly affect overall productivity and profitability of a firm. Some of the abrupt and disruptive changes may entail economic recession, inflation and the changing government policies.

Unless proper planning is initiated and sustained throughout the life of an organization, then a business entity will not be in a position to attain adaptive learning and impressive innovation.

Besides, good organizational planning will makes it easy for an organization to confine itself in examining and identifying malpractices that can negatively impact the overall performance of a business organization.

In most instances, organizations are usually required to develop rudimentary associations within their contexts so that all the short-term effects can be fully catered for just in case of any eventuality.

As such, good organizational planning will produce both generative and adaptive learning models that are required to harness innovation. In any case, a well defined organizational planning strategy can arguably complement the core outcomes of innovation and organizational learning.

Research studies have demonstrated that most enterprises often embrace these models of learning so that they can be assured of ther flexibility and adaptability towards positive growth and development.

Josserand, Teo and Clegg (2006, p.58) point out that good planning in an organization is critical in enhancing learning and innovation. In fact, both innovation and good planning arise from the positive attributes of organizational learning.

From a scholarly point of view, Collins (2006, p.142) posits that good organizational planning is usually depicted by the nature of the immediate business environment. These changes trigger development of fresh thought processes through learning.

Therefore, it is obvious that good organizational planning is instrumental in enhancing creativity and the ability of an organization to be pro-active.

When the aspect of innovation is discussed, issues related to positive growth and developmental can hardly escape the mind they equally affect both the marketing and entrepreneurial factors of production.

Therefore, it is vital to note that adequate organizational planning improves the creativity (innovativeness) and profitability needed in order for a business organization to succeed.

From the above discussion, it is certain that good planning assists in the growth of organizations. As a matter of fact, proper planning is no longer an option in the running of organizations.

Collins (2006, p.144) lament that it is not possible for any business firm to ignore good planning if it has the desire to attain innovativeness and successful organizational learning.

In addition, long term well being and profitability of an organization in terms of being competitive and the potential to attain improved performance is highly dependent on the nature of organizational planning that has been put in place.

Moreover, realizing the importance of these aspects has led into the desire of determining the future productivity of an organization.

Collins (2006, p. 140) assert that there is a vital correlation between good planning and the level of organizational performance bearing in mind that organizations that integrate both innovation and learning practices usually experience positive trends in their outputs.

In spite of that, researchers concur that unless these constructs are incorporated according to objectives of a business organization, positive outcomes may not be realized (Josserand, Teo & Clegg 2006, p.55)

Recent studies have revealed that the productivity in organization ca be measured through performance management. However, this may not be easy to acchieve (Collins 2006, p.144). Realistically, organizational learning assists in optimizing, coordinating and also managing human resources.

Therefore, this makes it easy to boost competitive pressures (Jack 2004, p.126). From a general outlook obtained from various firms, evidence has illustrated that these two constructs are the major prerequisites for improved performance of organizations.

Jack (2004, p.126) notes that organizational planning enhances job satisfaction at various places of work.

It is apparent that the performance of employees can be used to predict a positive relationship between planning, innovation and organizational learning. The level of performance of workers is affected by myriads of factors. For example, unity and cohesion are critical factors of development in any business set up.

The existence of harmony in organizations usually leads to collective approach and coordination of vital activities. In order to enhance this working attribute, the workforce should be competent in terms of knowledge, values and skills.

It has been noted that several businesses that have managed to harness close cooperation among employees have benefitted greatly from the accompanying competences. Moreover, job satisfaction improves the morale of employees. In the absence of good planning, such benefits cannot be realized.

Business entities that have realized poor performance among workers are highly likely to be missing adequate planning in their development programs.

Josserand, Teo and Clegg (2006, p.57) elucidate that the performance of employees can be enhanced by instituting learning, training and development programs at workplace. This improves the level of services delivered to clients. In addition, when clients are satisfied, an organization will be equally highly regarded.

It is also vital to mention that whenever workers enroll in programs related to learning and development; their levels of flexibility and personal accountability also tend to improve (Courpasson & Clegg 2012, p.73). Such programs also add value to their indigenous skills and competences.

Therefore, it is expected that increased performance of workers in an organization is clear indicator that proper planning has been put in place

According to Collins (2006, p. 150), organizational learning and innovative processes ought to be taken seriously by managements in organizations because they are considered to be powerful parameters of managing people and organizations.

In any case, there are myriads of cultural assumptions that often do not auger well with the productivity of employees (Courpasson & Clegg 2012, p. 63). Since human management is a critical exercise at the place of work, it should be taken as part and parcel of central planning of activities in organizations.

Klein (2000, p.87) observes that positive relationship between innovation and organizational learning can be easily attained through an active planning program. The latter can also be positively influenced by the level of commitment among the top leadership of an organization.

In addition, organizational planning learning is one of the management variables that can be utilized in strengthening the relationship between innovation and organizational learning.

For example, it is obvious that the performance of employees is directly proportional to the outcomes obtained from proper organizational planning and development.

Empirical research results have demonstrated that there are several ways of attaining a proper organizational planning especially when there is need to attain learning and innovation in an organization.

Courpasson and Clegg (2012, p. 64) note that even though the aspect of learning has been treated quite differently from training, both of these terms can be used to produce the same results.

For example, when there is need to improve the innovative nature of an organization, it is necessary to train the necessary members of staff or employees who are most suited for the task at hand. Organizations that do not stick any importance to training programs for employees may hardly reap the benefits that accompany it.

Therefore, organizational learning is a critical component of training. As such, the two aspects cannot be separated from each other.

This explains why Courpasson and Clegg (2012, p.61) posit that the performance and outcomes of a business entity are usually dependent on skills and knowledge gained through organizational learning and training.

It can also be argued out that the two organizational practices are critical components of innovation since no single organization can innovate its operations and product offerings if adequate training and learning programs are not instituted.

Whenever workers acquire new strategies, an organization will benefit from the diverse pool of skills, knowledge and competences that will be exhibited by the learned employees. On the same note, organizational learning in the modern world has been regarded as a vital aspect of business operations.

It is also justified to argue that proper organizational planning is an investment that can be made possible through training.

Josserand, Teo and Clegg (2006, p.57) present an assumption that through adequate planning of activities that an organization is supposed to carry out, the most competent leadership structures can be installed in each department of an organization since they will be clearly understanding their unique goals as departmental heads.

In other words, adequate planning in an organization will assist in attaining both the short and long term goals of an organization.

Needless to say, leaders who understand their unique purposes and roles in organizations are also in a position to cultivate the customs, culture and values that promote the reputation of their places of work.

It is also expected that when employees attain the best training skills through a well planned organizational learning program, they will directly benefit through individual career development. Being innovative through performance management informed thinking will not be a difficult task to handle.

From a scholarly point of view, Knights and Roberts (1982, p.48) argue that organizations that often excel in attaining a competitive edge usually invest a lot of capital and human resource in the field of planning.

This notion has been supported by Birkinshaw and Gibson (2004, p.50) who concur that continuous organizational learning is a key pillar in the entire process of planning and as such, it cannot be ignored.

In summing up, it can be observed that good planning is the starting point towards the success of any business organization that desires to remain competitive in the marketplace. It is only through proper planning that a business entity will be able to accelerate its level of innovation through the acquired organizational learning.

In addition, organizational planning has proved to be instrumental in harnessing the potential of employees who may be talented beyond their various areas of operation within an organization.

References

Birkinshaw, J. & Gibson, C. 2004, Building ambidexterity into an organization, MIT Sloan Management Review, vol. 45, pp. 47-55.

Collins, D. 2006, Assaying the advice industry, Culture and Organization, vol. 12, no. 2, pp. 139-152.

Courpasson, D. & Clegg, S.R. 2012, The polyarchic organization: Internal contention in the workplace and the construction of a new political structure, in, Research in the sociology of organizations, Emerald, Bingley, UK, pp. 55-80.

Jack, G. 2004, On speech, critique and protection, Ephemera, vol. 4, no. 2, pp. 121-134.

Josserand, E., Teo, S. & Clegg, S. 2006, From bureaucratic to postbureaucratic: The difficulties of transition, Journal Of Organizational Change Management, vol. 19, no.1, pp. 54-64.

Klein, N. 2000, The branding of learning, in, No logo: Taking aim at the brand bullies, Picador, New York, pp. 87-105.

Knights, D. & Roberts, J. 1982, The power of organization or the organization of power?, Organization Studies, vol. 3, no. 1, pp. 47-63.

Introduction

PwC has its employees and clients as the major sources of new ideas. Employees have technical expertise and experience, which can enable them to have a better understanding of products and application software. There are many strategies and tools that the firm can use to generate ideas from its stakeholders. The firm has to select a few simple tools and use them repeatedly to generate better results (Skiba & Herstatt, 2008).

Sources for generating new ideas

Customers

Customers are a major source of new ideas for firms that provide services. PwC offers a wide range of products in different segments. PwC offers about ten categories of products. One of the reasons for involving customers is to reduce the failure rate of introducing new services. Skiba & Herstatt (2008) explain that there is a failure rate of 80 percent for new services introduced in the financial service industry.

Customers may help the firm to understand the market needs from the customers perspective. It helps to eliminate the gap between internal beliefs and existing market demands (Skiba & Herstatt, 2008). There is a challenge that customers may lack new ideas, different from existing products. However, customers are an important source of ideas for incremental changes to make up for cultural differences.

The firm can select a group of lead users to help generate useful ideas about the firms products. The lead users are more innovative if they are experienced practitioners (Desouza et al., 2008). Customers can form groups that may be useful in generating new ideas. Grupo Eroski, a leading retailer in Spain, allows customers to elect delegates, who participate in the decision-making process (Ayuso, Rodriguez, & Ricart, 2006).

Employees

Employees form a crucial part in generating ideas because they are linked to routine activities in the firm. At PwC, employees interact closely with clients. Clients describe their needs and employees recommend different products that can solve the clients problems.

One of the reasons for using employees to generate new ideas is their technical expertise and experience. In the Saligna case study, employees were selected from different stakeholders to become part of the task force that was formed to resolve problems in the Saligna timber value chain (Tidd & Bessant, 2009). Employees have a clear understanding of the firms operations and can be used to outline the sources of problems. In the Saligna case, there was a need to outline the problems and set objectives for the Saligna Value Chain group.

Continuous improvement, which results from inefficient processes and high-quality products, is performed by employees. At PwC, employees listen to customers and should be able to translate customer expectations to superior products and improved customer service. In the Saligna case study, stakeholders in the value chain involved their employees in generating ideas to improve efficiency and value addition (Tidd & Bessant, 2009). Employees formed a problem-solving group.

At PwC, employees are in a better position to identify weaknesses in the tools they use and the services they provide, based on unmet customer expectations. In a different case, a bank based in South Bend, Indiana, was able to identify customer perceptions through employees. The bank realized that customers are attached to employees rather than to bank brands (Jones & Samalionis, 2008).

Employees are also important because of their involvement in turning ideas into reality. Ayuso et al. (2006) discuss employee involvement in the Caja Navarra case, where employees were involved in changing organizational culture. Jaruzelski, Loehr, & Holman (2012) explain that most ideas are generated, but fail to be executed. Employees hold a position of identifying the viability of an idea. PwC has to recognize that employee involvement may result in increased execution rates for new ideas.

Leading firms rely on their technical expertise to innovate and maintain a larger market share. According to Jaruzelski et al. (2012), technology drivers rely on the internal capabilities of their human capital and technology. PwC is a global market leader. It has to rely on the development of standards from its internal experts to remain competitive. As a leader, it has inadequate time for benchmarking and imitation. Jaruzelski et al. (2012) elaborate that technology drivers are likely to have outstanding financial performance.

In PwCs services, labor is the major input. Technical expertise is necessary to keep PwC as a market leader. PwC has to retain the most valuable experts in the industry.

Suppliers

Suppliers are sources of ideas because they can understand their tools better than the user (PwC). Software developing companies may provide a deeper understanding of the functions of their tools. They can also elaborate on the weakness of their tools. PwC may give them time to find solutions to weaknesses found in their software. Some of the weaknesses may be a result of external limits of technology. PwC should think of using application software in all areas, provided it does not undermine the quality of service. Application software has the capabilities of increasing accuracy and reducing the cost of service. Brainstorming together with software manufacturers may help them develop software that may improve the firms performance.

Technical publications are necessary for benchmarking and for understanding the market. In the Saligna case, the SVC group relied on monthly publications to generate ideas on what needs to be done to solve existing problems (Tidd & Bessant, 2009). It may help the firm to give a report on whether there is an improvement in performance. PwC needs publications to know market trends, which help employees offer better services to clients. Companies that collect data may be in a better position to identify indicators that are not easily visual but are the source of the easily identified metrics. It can result in the firms directly targeting the sources of change for data collection. Suppliers may have a better understanding of the causes and sources of problems.

Partners

PwC has partnered with different firms to carry out surveys to obtain firsthand information. It can also partner with the government to increase efficiency in public services.

Partners can help the firm to generate new ideas when they are involved in problem-solving sessions. Partners bring their expertise when they are specialized in a particular field. In the Saligna case, the universities offered technical expertise in the evaluation of trends and assessing improvement (Tidd & Bessant, 2009).

Strategies and tools for generating information from the sources

Workshops

Workshops are effective in generating ideas from employees. The workshops can also involve a combination of employees and customers. In the Grupo Eroski case, the firm involves both employees and customers in its workshops (Ayuso et al., 2006). Employees can tell what they observe and customers can suggest what they expect from the products. PwC can form workshops, where employees and customers meet and discuss the expected results from the services offered. Sometimes, clients have a higher expectation than what financial models can assess. Clients can suggest ways to create products that are accurately predictive of the markets. Most firms would like to know accurate information about the markets. Market Information may be providing more data and little predictive analysis. Analysts may be afraid to make predictions because they do not want to make predictions that fail. The workshops can encourage more predictive analysis and making customers understand factors that may affect forecasts.

Diagnostic interviews

It involves problem identification and problem-solving processes, where employees are asked about their encounters with clients (Kasper & Clohesy, 2008). Diagnostic interviews may be used by PwC for continuous improvement of services. The tool allows employees to highlight existing problems and managers to form a task force to find solutions. They can also seek external expert opinions to find solutions to the existing problems.

Internal group of experts

PwC should strive to use an internal group of experts because they are a clear source of competitive advantage for market leaders. Kasper & Clohesy (2008) discuss the use of an internal group of experts to provide new ideas. Jaruzelski et al. (2012) recommend an internal group of experts for firms that seek to lead the industry and outperform financially. PwC should hire academics as well as leading practitioners. Their purpose will be to determine the functionality of the models and tools that the firm uses to make an analysis. Considering that accounting has a list of traditional models, they will continuously test the effectiveness of the tools and models used to make market evaluations. Internally, they can suggest modifications to enable models to accurately capture market information.

Connection to an external source of information

Experts can give better interpretations of information gathered from the market. In the Saligna case, academics created an external source of information (Tidd & Bessant, 2009). PwC needs information from external sources of information. According to a Timken Company manager, universities and third-party companies can be useful sources of ideas (Jaruzelski et al., 2012). PwC can form partnerships with learning institutions. Academics are continuously carrying out research that may give more insight into the best practices. They can recommend new findings that can compensate for the loss of accuracy in existing financial models.

Lead user method

The firm faces the challenge of selecting customers, who can be useful in generating new ideas. The firm has to categorize and select lead users (Skiba & Herstatt, 2008). Based on the level of their sophistication, PwC has to select some of its clients as lead users. Lead users can be used for testing disruptive innovation. Lead users have higher expectations and can be used to highlight solutions that need to be developed.

User groups

The firm can maintain a community of users, who may discuss their expectations and user-experiences (Skiba & Herstatt, 2008). PwC has a great opportunity in improving its existing services by using user groups. The firm has the advantage that most customers are corporations. Corporations expect the financial services to provide insight into the markets and offer information that can be accurately used for financial planning. The user groups can assess the accuracy and inaccuracy of the firms evaluations. If a higher level of inaccuracy is suggested, there is a need to assess the weaknesses of the models used for financial evaluation. The user groups are in a good position to suggest differences between outcomes and the forecast. The firm will be involved in explaining the reasons for variations.

Conclusion

PwC, as a market leader, should focus on expert groups, workshops, and diagnostic interviews to generate ideas from employees. It can focus on user groups and lead users to generate ideas from customers. Connection to external sources can also help the firm have a clear picture of the industry and market trends.

References

Ayuso, S., Rodriguez, M., & Ricart, J. (2006). Using stakeholder dialogue as a source for new ideas: A dynamic capability underlying sustainable innovation. Web.

Desouza, K., Awazu, Y., Jha, S., Dombrowski, C., Papagari, S., Baloh, P., & Kim, J. (2008). Customer driven innovation: To be a market place leader, let your customers drive. Research-Technology Management, 51(3), 35-44. Web.

Jaruzelski, B., & Loehr, J., & Holman, R. (2012). The global innovation 1000: Making ideas work. Strategy+Business Magazine, (69), 1-15. Web.

Jones, M., & Samalionis, F. (2008). From small ideas to radical service innovation. Design Management Review, 19(1), 20-29. Web.

Kasper, G., & Clohesy, S. (2008). Intentional innovation: How getting more systematic about innovation could improve philanthropy and increase social impact. Web.

Skiba, F., & Herstatt, C. (2008) Integration of innovative users as source of service innovations. Web.

Tidd, J., & Bessant, J. (2009). Building and sustaining learning networks. Web.

Name: Chen, L.J., Chen, C.C. & Lee, W.R. (2008). Strategic capabilities, innovation intensity, and performance of service firms. Journal of Service Science and Management, 1, 111-122 (scholarly).

Article Summary

Chen, Chen and Lee (2008) create a conceptual framework that link firms strategic capabilities to innovation and performance in the service sector. Service firms play a vital role in the economic development of nations (Chen, Chen & Lee, 2008). Unfortunately, most studies in the strategic development field focused on the analysis of manufacturing businesses; few researchers explored service firms strategic behaviors and their implications for theory (Chen, Chen & Lee, 2008).

The authors use the resource-based view of the firm, to examine the link between strategic capabilities, innovation, and performance in Taiwanese service firms. The results of the study are at least surprising. First, social relationships between service firms exemplify an effective external resource, which facilitates innovative activity and improves firms strategic performance (Chen, Chen & Lee, 2008). Second, interorganizational relations foster new business opportunities and promote value creation in the service sector (Chen, Chen & Lee, 2008). Third, firms internal resources produce little to no effects on innovation intensity (Chen, Chen & Lee, 2008). Finally, innovative activity in service firms contributes to their strategic performance (Chen, Chen & Lee, 2008).

Implications for Professionals Involved in Strategic Management

The results of the study have far-reaching implications for professionals involved in strategic management. First, the study extends the resource-based view of firms and implies that social relationships can serve an essential external resource in the service sector. For many years, the strategic potential of interorganizational relationships had been largely overlooked. Today, professionals in the service sector must develop and sustain effective relations with other service firms.

Cooperation in the service sector can help to create social capital and raise the intensity of firms innovative activities. Second, Chen, Chen and Lee (2008) suggest that innovations contribute to the creation of the future business activities in firms. Simply stated, the intensity of innovative activities has little to do with firms present activity but re-orient them toward future competition and economic value. Professionals in strategic management must realize that it takes time for innovative decisions to affect and improve service firms performance. Simultaneously, innovative activities can help to make the future of service firms more certain.

Unfortunately, the study is not without limitations and its results must be treated with caution. To begin with, Chen, Chen and Lee (2008) focused on the discussion of service firms; for this reason, the results of their study may not be transferable to the manufacturing sector. Second, Chen, Chen and Lee (2008) suggest that internal resources do not affect firms innovative activity and performance. However, the reasons and mechanisms behind this finding are unknown. The future research must examine the relationship between firms internal strategic capabilities, innovations, and social relations. In the meantime, it is essential that service firms utilize their social relations potential to the fullest.

References

Chen, L.J., Chen, C.C. & Lee, W.R. (2008). Strategic capabilities, innovation intensity, and performance of service firms. Journal of Service Science and Management, 1, 111-122.

Executive Summary

Entrepreneurship requires a high level of creativity and innovation. An entrepreneur must be capable of identifying a need in the market and then coming up with a product that meets it in the best way possible. GreenIt Limited is a new green energy consultancy company that is headquartered in Dubai. The founders of this company noted that solar energy has a huge potential as society moves towards renewable energy. They also found out that the demand in the market exceeds the supply by a huge margin, leaving an attractive gap that this company seeks to fill. The opportunity in the renewable energy industry is huge and GreenIt will in the future venture into other alternative energy sources such as wind and biomass. It will also need support from other investors to facilitate its expansion plans

Business Description

General Description of Business

GreenIt Limited is a new consultancy and renewable energy services company that seeks to transform energy production and consumption in residential, commercial, industrial, and governmental entities in the United Arab Emirates. The company will be headquartered in Dubai city. The energy sector has been an area under intense scientific research as the stakeholders struggle to find ways of reducing the emission of greenhouse gases caused by the use of fossil fuel. Renewable energy has come out as the main solution to fossil fuel-related pollution. Countries all over the world are now promoting the production and consumption of renewable energy as a way of ensuring that they reduce environmental pollution and improve the sustainability of their energy sources.

Homeowners and companies in most of the European countries such as Germany and Spain are now encouraged to participate in the production of renewable energy using photovoltaic (PV) systems (Roehrkasten, 2015). This trend has given rise to the concept of self-consumption where residential, commercial, industrial, and governmental entities produce their energy to reduce their reliance on the national grid. The concept is increasingly becoming popular in developed countries as they try to go green in their energy production and consumption. Germany is a good example of a country that has moved a step ahead of others by coming up with a net-metering system that allows domestic and commercial entities that produce more energy than they need to supply the excess energy to the national grid and be compensated for the value of their production.

GreenIt seeks to borrow a business model that has been in use in these developed countries and modify it to fit into the local Emirati context. The firm will work closely with the leading solar companies in the country and relevant government agencies to ensure that homes and companies start ambitious projects of producing and consuming their energy with the help of PV systems. The company will have a team of experts who will be responsible for the installation and maintenance of the system for clients. The United Arab Emirates is one of the countries that receive regular sunlight throughout the year and solar energy production can be more successful than it is in Europe (Young, 2014). A city like Dubai has become a global business hub and a tourist destination center, which means that the need for energy is on the rise.

Residential, commercial, industrial, and governmental entities are now struggling to manage their monthly bills by optimizing their energy use. However, their attempts are often yielding limited benefits in terms of reduction of monthly bills. This company offers them the best way of dealing with this challenge. By installing the right size and number of solar panels, these entities can fully rely on their systems to meet their energy needs. The firm will also enable companies to reduce their reliance on energy supplied from the national grid by the government. Working closely with the solar manufacturing companies, government agencies, and environmental conservation groups, this company will not only be making profits through the installation and maintenance work but also help these other entities achieve their goals. It will play a significant role in ensuring that the United Arab Emirates energy sources are sustainable and that the country slashes its emissions of greenhouse gases.

Industry Background

Global energy

Energy demand at the global level has been on the rise. Industrialization, urbanization, and modernization are some of the major factors that have led to a massive increase in energy demand. According to Tagliapietra (2016), oil, gas, and coal have been the major sources of energy for the past several decades. However, in the recent past, there has been an increase in the demand for renewable sources of energy. Chart 1 below shows the increasing demand for energy at a global level.

Chart 1: Increasing energy demand globally. This figure shows a global increase in energy demand

Global supply and demand

In the past, there has been a massive supply of coal, oil, and gas from various parts of the world. However, a report by Hasan (2012) shows that fossil fuel may not last long. Most of the global oil reserves in various parts of the world may be depleted within the next century, which means that alternative sources of energy will be necessary. Renewable sources of energy will be critical in meeting energy needs shortly. The chart below shows the past and projected future energy supply from various sources.

As shown in the above chart, solar energy, wind energy, geothermal, and nuclear energy are going to be very important sources of energy. These energy sources will be expected to meet the increasing energy demand.

Production gap and opportunity identification

According to Hasan (2012), before investing in any business, it is important to identify the gap. Quantifying the gap in monetary terms makes it possible for an investor to know what to expect in the market. Regionally within the Middle East, the level of renewable energy production is still below the demand, which means that there is a renewable energy production gap, which should be addressed by existing companies. In this project, the focus is to invest in solar energy, which is one of the energy sources growing in popularity in the United Arab Emirates. Graph 1 below shows the energy production levels of renewable energy, the demand levels, and the gap that a company such as GreenIt Limited can target.

As shown in the graph above, the level of renewable energy production is way below the level of demand in the United Arab Emirates. Solar energy, which is the area of interest in our project, is under-produced in this country. Major cities such as Dubai and Abu Dhabi have witnessed an increase in the demand for solar energy as people turn to green energy, especially at home and in the industrial sectors. However, their demand cannot be fully met with the existing levels of production. The quantity demanded, in monetary value, is over three times what is produced currently, which means that there is a massive gap. The gap provided a business opportunity that GreenIt Limited seeks to tap. It offers this company an opportunity to enter this market with great success. It is clear that most of the middle class educated members of society are becoming concerned about environmental conservation. The need to reduce global warming has made them embrace the use of renewable energy sources (Tagliapietra, 2016). It is a clear indication that the future of the renewable energy market is getting brighter.

Goals and Potential of the Business and Milestones

GreenIt Limited is a new company that seeks to achieve success in the green energy market in the United Arab Emirates. It is important to outline the goals, potentials of the business, and milestones. The following are the goals of this new firm:

• To reduce the level of reliance on fossil fuel by promoting the use of solar energy in the United Arab Emirates;
• To offer consultancy services on how to use photovoltaic systems at home and in the industrial sector to produce and use solar energy;
• To become the leading and most preferred provider of PV installation services in the United Arab Emirates.

The management must understand the potential of the business to determine the ability of this firm to achieve success in the market. The identified potential of the business in this market are as follows:

• The United Arab Emirates is home to about 9 million people;
• All the residents of this country use some form of energy at home or in the industrial sector;
• Fossil fuel, which for a long time has been the main source of energy for the domestic and industrial sectors, is quickly becoming less desirable and unsustainable shortly;
• Most of the people living in the United Arab Emirates are gainfully employed in various sectors of the economy;
• It is estimated that more people are going to embrace the use of renewable energy shortly;
• Solar energy is one of the most important green sources of energy that is very reliable in the United Arab Emirates because of the regular sunlight we have throughout the year.

As a new project, it is necessary to define the milestones so that investors can know what is expected of them and how their investments will be used in the project. The following are the already completed milestones:

• Conducting comprehensive market research in the local Emirati market;
• Identifying the market gaps and business potential;
• Identifying the relevant stakeholders who will play different roles in ensuring that the desired success is achieved in the market;
• Identifying the appropriate office in Dubai where operations of this firm can be run;
• Determining the estimated budget for the project.

The following are the activities which are still in progress and will be completed soon:

• Equipping the office and hiring the necessary workforce for the project;
• Conducting comprehensive promotional awareness to help promote the GreenIt brand and its products;
• Identifying business partners who can invest in this project and expand the sources of income.

The uniqueness of Product or Service

It is important to appreciate that the field of renewable energy has attracted some stakeholders in the United Arab Emirates (Sayigh, 2014). Several companies already exist in this market offering various products to meet the varying needs of the customers. To achieve success, this company should ensure that its products are unique in the market. The following are some of the factors which make the products offered by this company unique in the local market:

• The consultancy services offered will be based on empirical studies conducted both locally and in other countries such as Germany, Spain, the United Kingdom, and the United States;
• The company is keen on hiring experts from countries such as Europe and North America. These experts will be able to help in implementing best practices in the production and consumption of solar energy;
• The officers who will be sent to install or repair the solar energy production systems for our clients are highly qualified experts who understand what is expected of them.

Marketing

Marketing will be one of the most important activities that will be conducted before the operations begin and during the operations of the company. The marketing department will be one of the most important departments of this firm. This department will be responsible for ensuring that clients are located and convinced to purchase the products of the company. To do this, promotional campaigns will be important. The department will develop television commercials that will be run in major television stations in the country. It will also use newspapers to promote the firms brand and products in the market. According to recent studies, social media marketing is increasingly becoming a popular way of reaching out to customers.

In the United Arab Emirates, most young adults and middle-aged people use Twitter and Facebook, something that was very rare when social media started emerging as a means of communication about ten years ago. This department will use Facebook, Twitter, and YouTube to promote the brand in the market. It will also reach out to organizational buyers such as major real estate developers in Dubai, Abu Dhabi, and other major cities so that the firm can win a contract to install and maintain PV systems (Swain & Jagerskog, 2016). The department will be responsible for conducting regular market research in the country to understand the changing tastes and preferences. It will work closely with other departments to ensure that the firms operations and services are in line with what customers expect in the market.

Research and Analysis

GreenIt assembled a team of marketing experts to conduct comprehensive market research within the United Arab Emirates to help identify the gaps and possible pitfalls that the firm should be ready to deal with once it starts its operations. The team of experts focused on understanding the current needs in the green energy market, how the current players in the industry are meeting these needs, and how this new company can fit into the market and achieve the desired result. The comprehensive research also looked at the target market for this firm, trends, and the market size, level of competition, and estimated market share that this firm must target within its first year of operation. The following are the important facts gathered from the market:

Target market identified

The research revealed that the most appropriate target market for GreenIt Limiteds consultancy services is mid-sized companies offering PV systems for the production of solar power within the Emirati market. The mid-sized solar PV system manufacturers and distributors need to understand the emerging trends and best practices in this industry. GreenIt intends to offer them the consultancy services they need at a fee. The chosen target market has the potential to pay for the services that will be offered, making it attractive for this company. After six months of operation, the company intends to introduce a new line of services: installation and maintenance of PV systems for clients within major cities such as Dubai and Abu Dhabi. The research revealed that current players cannot meet adequately customers needs.

Market size and trends

The research revealed that the market size of green energy is relatively big. Energy is needed both for domestic and commercial use. The fossil fuel that has been in use over the past several years is not only becoming undesirable because of its impact on the environment but also it will soon become sustainable when the oil wells run dry. As such, more people are going to turn to renewable sources of energy in both the domestic and commercial sectors (McDaniel, 2015). The emerging trends show that the production and use of solar energy are increasingly becoming popular not only in the United Arab Emirates but also in other parts of the world. These factors are likely going to expand the size of the market because locally solar energy is one of the most reliable energy sources.

Competition

Competition in the market is often determined by the number and size of the players. An industry that is dominated by numerous large companies is likely to be more competitive than one where there are only a few players. In the United Arab Emirates, the renewable energy industry is still in the development stage, as was revealed by our market analysis. Although several companies offering products similar to that of GreenIt exist in the current market, they have not been able to meet the demands of customers in the country. A market gap still exists that this company should fill as it expands its market share. The market research revealed that the following are some of the companies that offer similar or closely related products as GreenIt which make them the competitors:

• Masdar
• CLS Energy Consultants
• TQM
• City Solar and
• DuSol Industries

Estimated market share

Our market research revealed that almost 85% of renewable energy needs are not met in the United Arab Emirates. The existing players are still struggling to find ways of delivering their products in the market in the best way possible to expand their market share. The research revealed that if GreenIt can meet the expectations of its customers in the best way possible, it will not be difficult to expand its market share. It is expected that after the first two years of operations, the company will have 25% of the total market share for solar energy.

The outcome of the research revealed that there is a massive gap in terms of what customers needs and what the current players offer. It came out clearly that customers needs far outweigh what the market offers. The research also revealed that the emerging trends in energy use, especially the growing popularity of green energy in the United Arab Emirates is likely to result in the growing demand for the products that GreenIt will offer. That is why the owners of GreenIt got strongly convinced that an investment made in this industry cannot go wrong. It also makes it possible for the owners to assure potential investors that money invested in this project will surely yield impressive returns.

Marketing Plan

To achieve the set targets, the company should come up with a clear marketing plan that will be used once the operations are begun. Issues such as the marketing strategy, pricing policies, advertising, and promotional plans should be outlined in clear terms.

Market strategy

Sales and distribution at GreenIt will be done uniquely given that we will majorly be a consultancy firm in the initial stages of operations before expanding our product line. Some clients will come to our offices, but in most of the cases, our experts will visit the firms to offer the needed services. We intend to use both vertical and horizontal integration in the future to expand the product size for the company. The integration strategies are meant to reduce the reliance of this company on suppliers and distributors and to improve its profitability in the market. When GreenIt starts offering PV systems to its clients shortly, we will ensure that our products are directly delivered to the customers

Pricing policy

According to Drucker (2015), pricing is one of the most important tasks that a firm has to define before starting its operations. When products are priced below the market average, then customers are likely to associate the products with low quality. On the other hand, when products are priced way above the market average, then a section of the customers will be unable to purchase the products. It is a clear indication that the pricing policy must carefully take into consideration the purchasing power of the customers and the perception that customers may embrace if the product is priced in a given manner. Our products will be priced slightly above the market average to emphasize the high quality that the company offers.

Advertising and promotions plans

The marketing team has planned for comprehensive promotional activities for the company (Bessant & Tidd, 2015). Before commercialization, the marketing team will use social media, especially Facebook, Twitter, and YouTube to promote the GreenIt brand. Mass media- television and radio- will also be critical, especially a few days before introducing the products in the market. The company will continue using social and mass media platforms periodically to continue with brand and product promotions for the entire time that it will be operational.

Operations

The operations department will be responsible for two main factions. The first function will be to manage the supplies. The officers in this department will identify the suppliers who can offer this company high-quality PV systems at the best price possible. The department will ensure that there is a regular supply of the PV system kits as per the demand the firm will be handling at that time. The second function will be the actual installation and maintenance of the systems. Once the systems are purchased, the team will coordinate with the marketing officers who will hand over the clients to them. The operations department will install the PV systems as per the needs of the customers. Once the installation has been made, the department will work closely with the marketing department to know when and where repair and maintenance services are needed.

Identify Location

Identifying the appropriate location determines how successful a firm is in achieving market success. For a service company such as GreenIt, the location should be as close as possible to the customers. That is why the city of Dubai was identified as the best location for the companys headquarters. Most of the targeted customers are in this city. A regional office will also be set up soon after in Abu Dhabi, which is the second most attractive market for our products because of the population size and the purchasing power of the customers.

Advantages

The following are the benefits that this company will get by choosing the locations identified in the section above during its operations:

• It will be easy to maintain a personal relationship with the customers because of the closeness in terms of geographic locations;
• Any issue that may arise between the firm and the client can be addressed within the shortest time and in the best way possible, further strengthening the close relationship;
• The firm will be able to understand the changing tastes and preferences of its customers in the market because of the close relationship;
• It will be easy to engage the clients in the market in case there are emerging trends in the production or use of solar energy based on global trends.

Zonng

GreenIt will need to zone the market when it starts its operations. Zoning will enable it to expand its market share systematically. Zoning will be done based on geographic location. The following is how the company intends to zone its operations:

• Dubai will be the first zone that this company will target when it starts its operations. It will be the Zone A of the company and it is expected that by the end of the first year, the company will be controlling at least 30% of its market share;
• The emirate of Abu Dhabi will be zone B. The firm intends to establish its offices in zone B in its second year of operation. It will target about 35% of the market share of solar energy in Abu Dhabi by its second year of operations;
• The other emirates will all be classified as zone C and they will form the target market for the company in the third year of its operations. At this time it is expected that the firm will be self-sustainable in its operations.

Taxes

Currently, there are no taxes in UAE for companies operating in the green energy sector. Sometimes the government issue incentives to promote investment in this sector. GreenIt will, therefore, enjoy the tax holiday offered by the government when it starts its operations. However, there might be taxation in the future. The firm will prepare itself to start paying tax when the government issues a directive that they should do so.

Proximity to Suppliers

The choice of location was made because it is also close to the suppliers, especially when the firm will start offering its installation services. Some PV system distributors exist in the city of Dubai. It will be easy and less costly for this company to get access to these supplies and deliver them to the customers for installation. The closeness with the customers will also make it easy for the firm to ensure that its supply chain is reliable.

Access to Transportation

Dubai has one of the most advanced rail and road systems in the world. The metro system is very efficient in the transportation of people and goods within the city. The movement of goods and personnel will be efficient and less costly for GreenIt when operating in this city. Problems such as constant traffic snarl-ups are not very common in the city. The fact that the firm is located close to suppliers and customers further lowers the cost and time of transportation.

Management

Management Team and Key Personnel

The topmost management team will be the board of directors. On the board, there will be chairman and chief executive officers. The management team will also include departmental heads for finance, marketing, supply chain, human resource, and operations departments. The human resource department will play a critical role in the operations of this firm. Currently, several skilled employees have already been identified. However, the firm will need to hire more skilled, semi-skilled, and unskilled employees to work in different areas within the company. Skilled and semi-skilled employees will be needed in the field to do the installation and repair. They will also be needed in the office as strategists, accountants, secretaries, finance officers, among other areas. Unskilled officers will be needed for functions such as cleaning the compound and offices of the firm. It is the responsibility of the human resource department to ensure that all the needed human resource is made available. The department will need to work closely with other departments to know the nature of the skills needed.

Legal Structure

GreenIt is currently owned fully by the four directors who contributed equally towards the establishment of the company. In its legal structure, these four employees have equal power in determining the future of the company. They each hold 25% of the companys shares. The employees are hired on the agreement that they shall be paid salary and that the ownership of the company is in the hands of the directors. During its operations, the company may need more capital to expand its operations. It may look for investors to become part of the shareholders on terms that will be agreed upon based on the forces that will be prevailing within the firm and in the market at that time. In the future, there will be a possibility of inviting the public to the ownership of the company through an initial public offering.

Board of Directors, Advisors, and Consultants

The board of directors, which is the highest management unit of this company, will be composed of the four owners who have already contributed their resources and time towards the initiation of the company. However, the size of the board may expand with time. The firm currently does not have advisors and consultants, but the board members have made proposals that it might be necessary to partner with industry experts to help expand the knowledge of the market.

Financial

Financial Forecast

The management needs to have a clear understanding of the financials of the company before and after starting operations. The pro forma financial statements will help in forecasting what should be expected in the market once the operations begin.

Profit and loss

The profit and loss statement will help in estimating how the firm will perform financially once the operations begin. Table 1 below shows an estimated profit and loss statement for the first five years of the firms operations. As mentioned before, the government has offered a tax holiday for companies in the renewable energy sector. However, this may not last forever and it is not known when the government will consider introducing a tax. As such, the financial analysis has included tax, based on the estimates in other related industries.

Table 1: Table Profit and loss statement. The table is a profit and loss statement.

Cash flow. Cash flow estimates will help in determining the financial soundness of this project and how well it will be capable of meeting its short-term financial obligations. The table 2 below shows the estimated cash flow within the first five years. Tax expenses have been included in the estimates just in case the government decides to introduce it.

Table 2: Cash flow analysis. The table below shows the cash flow statement.

Break-even analysis

Based on the proposed financial statements above, the break even analysis for GreenIt will be as shown in the graph below.

As shown in the above analysis, the breakeven point will be achieved in the mid-second year when the investors will start reaping the profits.

Cost controls

The management of this company will be keen on cutting down the cost of operation. Any expenditure must be properly justified before it is approved. As a new company, it will be necessary to manage the expenses to ensure that we maximize our profitability. However, our cost control measures will not mean that the management will under-spend on important projects.

Budgeting plans

The management has come up with an estimated budget for various activities as shown in the financial statements shown above. The investors will be expected to support the operations of this firm fully in the first year. Within the second year, it is expected that the revenues of the firm will be capable of paying for all the expenses.

Investors Returns

GreenIt Limited will need investors to help it expand its operations in the market. However, these investors need to understand the benefits that they will generate from their investment. Under normal circumstances, investors would prefer to have their money in the bank to earn a little interest then to invest in a project that cannot generate meaningful value. To determine the financial benefits that the investors will get, it is important to calculate Return on Investment (ROI) for the first five years of the firms operation.

Return on Investment (ROI) = Net income/Investment

Where net income = sales revenue

Investment = Owners capital+ loan from bank (500,000+100,000)

Assuming that no further investment is made within the first five years

Year 1 ROI

-332,376/600,000 = -0.554 or -55%

Year 2 ROI

186,652/600,000 = 0.311 or 31%

Year 3 ROI

212,906/600,000 =0.355 or 35.5%

Year 4 ROI

240,167/600,000 =0.400 or 40%

Year 5 ROI

268,474/600,000 =0.447 or 44.7%

The analysis shows that in the first year, the ROI will be negative. However, that is expected because of the heavy investments needed and low sales as the firm penetrates the market. However, everything changed in the second and subsequent years as the financial benefits keep rising. For instance, in year 2, investors will get 31% more for every dollar they invest in the firm. If they invest AED 100,000, they will have AED 131,100 by the end of the year.

How much is needed from investors

This is a very ambitious project and the initial investors believe that the market has massive potential if the right decisions are made and appropriate capital injected into the project. As such, AED 2,000,000 will be needed from the investors within the first five years. AED 500,000 will be needed each year, from year 2 to year 5 to help in the expansion plans.

Critical Risks

Potential Problems

The management of this firm is keen on ensuring that it understands the potential problems that it may face when it starts its operations. One of the problems that may be faced is the limited sources of capital. As a new business venture that is just starting its operations, it is possible that it will not get the financial support it may need from financial institutions. Another anticipated problem is the limited experience we have as a firm. There are unique challenges that may only be determined when the firm starts its operations. They may include highly demanding customers, highly demanding suppliers, or any other such operational challenge.

Obstacles and Risks

Besides the problems identified above, other obstacles and risks exist which may affect GreenIt Limited when it starts its operations. Although competition in the market is not very stiff now, it is expected that other investors will be attracted to this industry and that may stiffen competition. The existence of other alternative energy sources such as wind and biogas may also eat into the market share of solar power companies. The management should also be sensitive about the following factors:

• Possible fluctuation in pricing in the market that may have a significant impact on its profitability;
• Powerful clients, especially the organizational buyers, who may want to dictate price market in their favor;
• Powerful suppliers who may price their supplies in a way that is unfavorable to this company;
• General inflation in the economy that may diminish the value of profits that the firm makes.

Alternative Courses of Action

The company will need an alternative course of action just in case the set plan does not generate the desired level of profits for the company. As mentioned above, the firms primary product when it starts operations will be consultancy services. Later in the year, the firm plans to introduce the second product, which is the installation of the PV system on the premises of the clients. It will soon be followed by the maintenance of these PV systems. In its vertical integration strategy, it will start importing directly or even manufacturing the PV systems to eliminate the suppliers. In case the consultancy services are not generating profits at the desired rates, this company will start the project of PV installation and maintenance within the first two months of operation instead of the six months. It will also be necessary to explore other alternative energy sources such as wind energy to expand the firms profitability.

Harvest Strategy

Transfer of Asset

It is important to appreciate that it is possible, along the way, for the business to become less viable that it previously was or as was anticipated. It is, therefore, necessary to come up with an appropriate exit strategy. In case of dissolution, all the assets of GreenIt Limited will be liquidated and all the debtors paid first. Then the remaining assets will be shared among the shareholders. In case one or more of the investors are interested in continuing with the business, the other stakeholders who want to quit will transfer their shares to them and be paid the value of their shares in cash.

Continuity of Business Strategy

The current owners of GreenIt do not anticipate a situation where this company is forced to stop its operations. Instead, there will be a continuity of business strategy where the company will move from offering the current unprofitable products to other alternative products. The following are some of the areas that will help ensure that there is continuity in the operations of the company:

• Exploring the wind energy industry;
• Investing in biogas production, especially for domestic use;
• Expanding our green energy consultancy services beyond solar power.

Identity of Successor

It is realistically possible that the investors of GreenIt, for one reason or another will want to exit this business. Although it is very unlikely given the lucrative opportunities that exist in this industry, it is important to be open to any eventuality. In case such a situation may arise, we will need to identify a successor. The shareholders will come up with a plan on how to get the value of their investment in the firm. A successor who will be willing and capable of meeting the terms of these investors will be the successor. All the shares of the company will be sold to the investors after settling the agreed-upon payments. The initial shareholders will cease claiming ownership to this company as soon as they receive payment from the successor. The following are some of the possible reasons why a successor may be needed:

• In case the initial investors want to exit this business for personal or any other reason;
• In case the business fails to be as profitable as was anticipated and therefore it becomes necessary to stop operations;
• In case the cost of operation is increased drastically because of factors such as inflation, making the current investors unable to run the business.

Milestone Schedule

Timing and Objectives

The current management has identified the activities that should be carried out to ensure that the business becomes a success. Each of the individual activities identified in table 3 below. Each of the activities has a specific timeline within which it shall be started and the expected completion date. The following are the objectives that the managers will be keen on achieving:

• To ensure that a proper location is identified that is appropriate for this company;
• To ensure that necessary systems and structures are put in place to facilitate the operations of the company;
• To have a team of employees capable of undertaking various activities within the company;
• To promote the brand and products of this company in the market;
• To introduce the products of this company in the market using the best approach possible.

Deadlines and Milestones

Table 3 below identifies the activities that should be done and their set deadlines. Some of the activities such as identification of location have already been completed. Equipping and hiring of staff is work in progress. The promotion of the brand and products of the company will start before commercialization. It will continue even when the firm becomes operational, as shown in the table below. Sourcing for funds is also likely going to be a continuous process as the firm expands its operations locally and even regionally in the future.

Table 3: Scheduled operational activities. The table shows activities in the project. Source (Developed by author).

Relationship of Events

The events identified in the table above are related, but as indicated above, they will be treated as individual projects undertaken by different groups. The office and premises from which operational activities will be conducted can only be equipped if the process of locating and renting has been done. Paying for the premises, equipping the office, hiring the staff, engaging in commercial promotional campaigns, and delivering the products to the customers all depend on the ability to get the needed finance. The proper promotion will define how well the brand is known in the market and the volume of sales that will be made. Sales volume in turn defines how well the firm is capable of getting more funds for expansion.

References

Bessant, J. R., & Tidd, J. (2015). Innovation and entrepreneurship. Hoboken, NJ: Wiley & Sons.

Bradshaw, M. J. (2014). Global energy dilemmas: Energy security, globalization, and climate change. Hoboken, NJ: Wiley & Sons.

Drucker, P. (2015). Innovation and entrepreneurship. London, UK: Routledge

Hasan, S. (2012). The Muslim world in the 21st century: Space, power, and human development. New York, NY: Springer.

McDaniel, B. (2015). Entrepreneurship and innovation: An economic approach. New York, NY: Cengage.

Roehrkasten, S. (2015). Global governance on renewable energy: Contrasting the ideas of the German and the Brazilian governments. Wiesbaden, Germany: Springer

Sayigh, A. (2014). Sustainability, energy, and architecture: Case studies in realizing green buildings. New York, NY: Springer.

Swain, A., & Jagerskog, A. (2016). Emerging security threats in the Middle East: The impact of climate change and globalization. Lanham, MD: Rowman & Littlefield.

Tagliapietra, S. (2016). Energy Relations in the Euro-Mediterranean: A political economy perspective. London, UK: Palgrave Macmillan.

Young, K. E. (2014). The political economy of energy, finance and security in the United Arab Emirates: Between the Majilis and the market. London, UK: McMillan.

Executive Summary

Globalization has increased the number of people who travel for either business or leisure purposes. Naturally, the passport, which is an essential travel document, has become of immense value. However, it is prone to theft, damage, and misplacement. This problem inconveniences most people who are unable to travel because they have to replace the travel document. Much more waste a lot of money paying for this service and spend countless numbers of weeks in foreign embassies waiting for such replacements. This report is a business proposal for the setting up of a virtual passport service to enable people to travel paperless. It is a new product innovation, which is only at an experimental stage in certain parts of the world. The report is divided into eight key sections. The first one outlines the problem and the opportunity for the business.

It shows the need for new ideas and highlights some of the advantages that people could enjoy because of its implementation. The second section shows our companys competitive advantage in securing this business. Key organizational competencies emerge as the main reasons for the optimism in making this business idea work. The third section of this report outlines our sales and marketing plan. It paves the way for the fourth section of the paper, which provides a synopsis of the competitive environment. Our business model appears in the subsequent section, showing how an advertisement business model would generate revenue for the company. The forecast section provides a broad overview of the market and presents a sales vision for the company. The seventh section of this report highlights the team that will deliver the organizational results. Comprising of three levels of management, we expect this team to accomplish the organizational milestones that appear in the last and eighth section of this report. Comprehensively, this business proposal presents a succinct understanding of how our organization would help with the rollout of a paperless passport service that would make it easier for people to travel around the world, without the worry of losing their travel documents.

Problem/Opportunity

It is a travelers nightmare to leave the house and arrive at an immigration office, only to realize that he/she has forgotten to carry their passport. Similarly, it is devastating for people to be stuck in foreign countries because their travel documents have been stolen from them and now have to camp at foreign embassies waiting for help. This fact is in line with the high number of lost/stolen passports reported by different countries each year. For example, averagely, Australia receives 38,000 cases of lost passports annually (Bourke 6). The numbers are higher in the US because according to the State Department, there could be up to 253,000 cases of lost passports reported every year (Bourke 6). Similarly, the same agency says that it receives up to 68,000 cases of stolen passports yearly (Titcomb 3). The situation is not different in Britain because according to Beckford, British travelers are spending millions of Euros each year paying for emergency travel documents because of lost or stolen passports (5).

Replacing a lost or stolen passport could be emotionally draining for most people, especially if they are stuck in foreign countries and cannot travel to their destinations. This is true for most countries because it could take weeks for foreign embassies to do so. For example, it takes up to six weeks for the US to process regular passports and up to 2-3 weeks to replace one, depending on the location of the foreign country. Lost or stolen passports could also cause a security nightmare to different countries because there is evidence that criminal and terrorist gangs sometimes use these lost or travel documents to carry out illegal activities (Beckford 1). This does not mean that the thousands of misplaced passports would fall in the hands of these gangs; however, it would only take a small percentage of this number to cause a serious security problem.

This business plan is based on the possibility of accessing passports via an online platform, by keying in a passport number or simply accessing it through a URL address. The idea of introducing a virtual passport has been tried by Australia. The country is still in the process of working out the details of doing so because it has only recently collaborated with New Zealand to test out the new idea (Gemalto NV 1). The feasibility of this business hinges on the fact that governments only need passports as a pointer to their database, which should have biometric information about the passport holder (Gemalto NV 1). Therefore, the identity and biometric data of the passport holder would be locked into a cloud, which would be accessible anywhere in the world. Therefore, travelers would no longer need to carry their physical passports and risk having them stolen or forgotten at an unspecified location.

Unfair Advantage

The major barrier to this business plan is the inability for all countries to have access to one database that would contain information about passport holders from different countries. For example, a US citizen would have no trouble using a virtual passport in the US because the country would naturally have such information on their computers. However, when the same person jets into another random country, the immigration officers at the new location may fail to have access to the US database that should contain this information. Our company would be able to solve this problem because we offer a safe and secure cloud computing service that has unique safety and data hosting features, which different governments could tap into.

Our company also has a history of working with different governments because we have won different tenders in offering information security services to different government departments in the Middle East and Europe. With a good record of offering quality services to different government departments and a thorough understanding of government tendering processes, our company is strategically placed to offer this kind of service to the department of foreign affairs. Furthermore, our existing relations with other different government departments have enabled us to have a good rapport with the decision-makers of the state department who are strategically placed to award such a tender to bidders.

Sales and Marketing

The sales and marketing strategy for our business would be hinged on providing an integrated strategy that reflects the different stages of buying. It is also mindful of the conversion rate that often characterizes online marketing strategies. This plan would also reflect the important contribution of sales and marketing processes to our ability to generate revenue for the business. The following sections of the paper explain the main tenets of the marketing plan.

Online Marketing

Our main product is the provision of a platform where companies could advertise their products virtually. To reach these companies (which will be our primary clients), we will employ an online strategy where companies will be targeted via a company website. Although there are other different platforms to reach the same group of clients, such as television, blogs, social media, print media, and the likes, the website platform stands out because it is not limited by geographical differences. Indeed, the services offered by our company could potentially be global. Therefore, it is undesirable to lock into a marketing strategy that would be limited by geographical barriers. Similarly, websites could allow us to translate our marketing message into different languages to reach a wider scope of clients. Television, print media, and telephones are traditional marketing channels, which are limited in this regard. Thus, unlike social media sites that are often informal, the website platform stands out because of the potential to offer a professional pitch to clients. We also expect that our services would be marketed through word-of-mouth communication because as people log in to the virtual platform, they will learn about the companys services. A summary of our projections appears below.

NB: All figures are in millions.

Competition

Primary Competition

De La Rue is the main competitor for our services because it has had a long history of working with different governments to print money and passports. The company is working on new technology to provide paperless passports to different governments. However, this process is still at its infancy stage and, unlike our approach, which is mostly centered on software development, De La Rue is focused on developing technology that would involve hardware development to store digital passport information (Titcomb 2). In other words, they plan to rope in Smartphone companies to develop new hardware that would allow Smartphones to store electronic information on their devices. The electronic information would mostly contain details about the passport holder.

It would also contain safety features that would prevent people from copying information from the phone onto another device. The company believes that the main advantage of this method is its potential for wireless communication with passport readers. It also believes that this strategy would prevent spoofing or copying, which is most common with devices that use QR codes (Titcomb 2). Our approach is purely software-oriented in the sense that we strive to store this information on the cloud, which makes it easily accessible and less cumbersome than the approach taken by De La Rue. Since our focus is on software, companies that offer cloud-computing services become our secondary competitors

Secondary Competition

Many companies offer cloud-computing services to different organizations. Amazon Web Service (AWS) has the greatest market share in this segment. Indeed, according to Richman, this company controls a 45% market share in the global cloud computing services (1). This figure means that its market share is greater than that of Google, IBM, and Microsoft combined. This finding is also supported by independent market research done by Synergy Research Group, which shows that AWS commands the greatest market share in this segment (Richman 2).

AWS emerges as the most dominant competitor in this market because it is also the leading company in the platform-as-a-service market, meaning that it could offer the government a platform for holding its passport database as a service. It is also bound to offer such a service cheaply because it enjoys economies of scale based on its expansive data infrastructure (Richman 1). However, it does not maintain absolute dominance in this market because evidence shows that other players in the market also dominate some sections of the cloud computing market. For example, IBM has a greater dominance in the managed private cloud services (Richman 1). Although these companies have a strong market presence in cloud computing services, their specialization is in working with private companies and large global companies.

Our company has a chance to outwit the competition because we have specialized in working for public organizations, as opposed to private organizations. The potential that exists in this market is enormous because the market leaders in this field have sustainably grown their cloud revenue at more than 100% in the past five years (Richman 5). There is some speculation in the market that these companies could be making more money because some of them, such as Microsoft and Google, do not provide accurate figures about their financial data (Richman 5). Alibaba in IaaS and Oracle in PaaS are some second-tier companies in this field that are equally posting strong growth numbers in this field (Titcomb 6). Nonetheless, since these companies specialize in providing cloud-computing services to private enterprises, they only stand out as indirect competitors.

Business Model

In this section of the plan, we will outline how the proposed business will generate profits. The advertising business model will be our main framework for generating revenue. This model works by selling advertising space to companies. Since our business is online-based, we expect that our business model will be segmented into three sections that include cost per thousand, cost per click and cost per action. In the cost per thousand segments, the advertiser will pay the company a fixed amount of money for 1,000 impressions. In the cost per click segment, the client would pay the company a predetermined amount of money for every click made on an advertisement.

Under the cost per action model, clients would be paying for every action made on the virtual platform. Sales or leads that would come from the web platform are some of the actions that would be billed. We will be flexible on the number of money clients will be paying because depending on the response we get from the customers, we will use either a fixed payment model or a flexible payment plan, based on an auction process. The proposed business model is going to generate money in the medium-term because, in the short-term, there will be heavy investments needed to create the virtual passport platform that would ultimately be used to generate an audience that would be targeted by the advertisers.

We do not anticipate a shortage of people who will log into the virtual platform because it will be mandatory for all passport holders to gain access to their information online. In this regard, there would be no customer acquisition costs or advertisement costs for increasing our audience numbers. The mandatory nature of the business also makes it easier for our clients to target different types of customers. Indeed, no criteria will be used to determine the types of people who will use the virtual passport platform because everybody will have to use this option once it is rolled out. Therefore, our platform will mimic the real-world setting, thereby attracting different types of advertisers who may want to market their products to different demographics.

Forecast

Market Forecast

Our company is expected to attract a high number of small businesses operating in the country. Although we intend to attract large businesses as well, we project that small businesses will be the biggest client base because of their sheer numbers. Here, it is important to understand the impact of market size because it determines the potential volume of sales in the long-term. Since there are high numbers of small business startups each year, we do not expect to make significant sales in the short-term or medium-term because these businesses are not often profitable in the first stage of their business cycles. However, in the long-term, we expect to reap from the high number of small businesses that would have been midway through their business cycles. The potential for profit in this segment is high because there is a low capital investment required to attract this client group. Although the barriers to market entry may be low, the overwhelming size of the market may make it difficult for one entrant to dominate the market in the future. The table below shows our potential for profitability.

Financial Forecast

The income forecast presented in this proposal shows our initial test of the business based on conservative estimates of the market share, sales figures, and expenses. In the short term, we expect to have at least 200 clients who will be advertising on our platform. In the long-term, we expect this number to rise to more than 1,000 clients. This group of clients will be comprised of small and big businesses, but as highlighted above, we expect that small businesses will form a greater percentage of this group. The major project of providing paperless passports is expected to take up to 50 employees.

The potential for scaling this number depends on whether we would get contracts from other governments, or not. However, additional time should be factored in getting new business because government bureaucratic processes are often slow and cumbersome. Because of the low overhead associated with getting clients, we expect to be profitable within the second year. The revenue potential of the company would mostly depend on the managers resolution to provide a constant income for the company, but, at the same time, it will depend on his commitment to fill the pipeline of the company. The revenue figures stated below are based on a 50-man team. However, the creation of a bigger and more committed workforce may exceed it.

Team

The success of the proposed business largely depends on the quality of the team that would spearhead the realization of the organizations vision. Our team would have 18 members, with specific and distinct roles. The team would be comprised of the board of directors, chief executive officer, chief financial officer, departmental managers, and casual/contractual workers. The section below shows the management profile of each team member.

Board of Directors

Mr. Charles Carlton: Carlton has been a board of directors of our company since November 2002. In the past, he has worked as a lead independent director of Yahoo Corporation, from 1996-1999. He has also worked as a CEO for the company from 1994 to 1995. Similarly, he has also had a short stint as an executive chairperson of the board of Autodesk. Doubling up as the CEO of this company, he has cumulatively worked for 3 years in both capacities. Before this job, Carlton has also worked as a Board member of Airtouch Communications and Intel Corporation. He brings immense knowledge to the company as a leader and decision-maker in some of the most reputable IT firms in the world. Indeed, as highlighted in his CV, he has gathered immense knowledge in the technology industry and global management sectors, which are invaluable to our proposed business.

Mr. Henry Burns: Mr. Burns is 42 years old and has served as a board member in our company for three years. Previously, he has worked as a strategic advisor at the Massachusetts Institute of Technology (MIT). He has also worked as a Chief Executive Officer for the Retirement Policy Centre, from 2008 to 2012. Similarly, he has served as the Chairman and Chief Executive Officer of Mercer LLC, a global corporation specializing in human resources and financial services. Mr. Burns brings a wealth of experience in human resource management and global operations management because he has good experience in the same. His experience as a public service outside director also adds to the wealth of experience he infuses in the organization.

Mohammed Hussein: Mr. Hussein has been a board member of our company for the past seven years. He is 67 years old and has been a founder and partner at Emerging Company and Partners LLC. The company specializes in providing executive management advisory and consultancy services. Before this stint at Emerging Company and Partners LLC, he also served as a Board member and Chief Executive Officer of nCube Operations, which specializes in providing media systems services. From 2001 to 2003, he worked as a Chief Executive Officer of Entra Incorporated before another company, Blue Coats Limited, acquired it. Mr. Hussein brings a wealth of knowledge and experience relating to the management of IT companies. His expertise in operations management and strategy formulation is invaluable.

Chief Executive Officer

Nassim Mohammed: Ms. Nassim is the chief executive officer of the company. Her role will be to oversee and manage most of the organizations daily operations. In 2003, she was appointed the CEO designate for the Vodafone group but assumed this position in 2005. She worked in this capacity until she joined our company in 2014. She brings more than a decade worth of experience managing an IT company. One of her most notable accomplishments is the successful winning of a tender to offer consultancy services to the foreign affairs ministry in the UAE.

Chief Financial Officer (CFO)

The CFO of our company is Nesley Brown. She has worked in such capacity at IBM and Cisco for more than a decade. With an MBA in accounting from Stanford University, she is poised to guide the organizations financial department by making sure it complies with existing accounting standards, both locally and internationally. She is also supposed to make quarterly and annual financial reports for the companys shareholders and brief the CEO about the financial issues concerning the organization. She has successfully done so in the past five years that she has worked in the organization. Consequently, she is expected to put her knowledge and practice in the company to the test.

Departmental Managers

Four departmental managers will oversee most of the organizations middle-level operations. The managers would oversee and manage the activities of the companys sales and marketing department, human resource department, the public relations department, and the information technology department. They will be responsible for the day-to-day running of their departments and will be answerable to the companys CEO. The four key departmental managers have immense experience in their areas of expertise because none of them has worked for less than seven years in the organization. Their understanding of the organizations internal activities is expected to be valuable to the company, as it seeks to undertake bigger IT projects.

Casual/Contract Workers

We cannot accurately predict the number of casual workers that would work for the company because the volume of work will determine the number of employees to have, at a given time. However, tentatively, we estimate that we will have a team of 30 contractual workers who will work on the project. An additional 21 permanent staff who work on other projects for the organization will also be useful in undertaking the current project. All the workers will have a degree qualification and must have five years (or more) working experience in an IT company. This way, we expect that they would be well versed in the kind of work they are expected to do. The contractual model is appropriate for the company because the volume of work ordinarily varies. Furthermore, it is cheaper to have contractual employees, as opposed to permanent employees. Comprehensively, the diagram below explains the team organization for the proposed business plan.

Status and Milestones

The status and milestones outlined in this report represent a combination of the companys strategic and execution plan. The successful execution of these strategies will help the organization to realize the financial and market forecasts discussed in this report.

Objectives

The implementation plan for our company is intended to provide sustainable growth for the organization. Forming strategic partnerships with public and private organizations would further enhance this vision. Consequently, we expect to fill the sales pipeline with an inflow of small businesses. Our company intends to deliver utmost client satisfaction at all levels of our business operations. Consequently, we expect our growth strategy (an increase in client numbers) to come from the proper treatment of existing clients. New hiring and consultancy services will mostly be drawn from variations in client needs. Our geographic and service offerings will also be dependent on the nature of our clients needs. In summary, the main objectives of our business appear below:

1. Repeat Clients.
2. 100% client satisfaction.
3. Steady growth.
4. A logical expansion of services.

The milestones of our business plan are definitive on the major types of activities that should be completed throughout the project plan. They include the completion of the business plan, acquisition of financing, hiring employees, setting up the IT infrastructure, a review of the proposed plan vs. the actual plan, marketing, first break-even month, and an upgrade of the business plan. The following Gantt chart explains these milestones.

The accomplishment of these aforementioned milestones would mean the successful implementation of this business plan. We project that our undertaking has immense potential in revolutionizing travel around the world. Therefore, the success of this pilot business will pave the way for the perfection of this business idea and herald the possible roll-out of the same in other parts of the world. Indeed, by successfully implementing this plan, we hope to set up a virtual passport service to enable people to travel paperless. Although it is a new product innovation, which is only at an experimental stage in certain parts of the world, we intend to make it a reality. More importantly, we believe that its success will be a cash cow for our investors.

Works Cited

Beckford, Nicola. What Happens to Lost and Stolen Passports? BBC. Web.

Bourke, Latika. Australia to Trial Cloud Passports in World First Move. SMH. Web.

Gemalto NV. Virtual Passport: Your Passport in the Cloud. Gemalto. Web.

Richman, Dan. Study: AWS has 45% Share of Public Cloud Infrastructure Market  More than Microsoft, Google, IBM Combined. Geekwire. Web.

Titcomb, James. Your Smartphone could be your Next Passport. Telegraph. Web.