Business Venture ENT

BusinessVenture ENT

BusinessVenture ENT

Thebusiness venture will deal with the development and publishing ofSmartphone Apps. Smartphone Apps are applications which are designedand run on Smartphone such as android, iOS and other operatingsystems for Smartphone (Boulos,Wheeler, Tavares &amp Jones, 2013).Some most common Apps include social networking, and entertainmentApps. The Apps will be sold through the “App Store” accessible byiPhone.

TheNew Apps

Thenew product that will be introduced in the market is social andentertainment apps that unlike the current apps in the market, ourproduct will address social issues in the target population. The appsthat our business will design will concentrate on uniqueness and willhave gender sensitive features. In addition, use of women inentertainment apps which portray them in demeaning manner will beaddressed. The apps will have non-sexual and non-violent themes whichhave become very common in entertainment apps. The new apps will havegender balance and respect for both genders, in order to address thissocial problem in apps. As part of addressing social issues, the newapps will consider applicability for users who are physicallychallenged such as the deaf and the blind. Basically, the new rangeof entertainment and social apps that will be the focus of ourbusiness venture will be for addressing social issues.

Marketplaceanalysis

Thenew apps will be designed for the industry powerhouse Apple. Applehas made a considerable mark in the mobile phone technologyespecially in its Smartphone, The iPhone series. The venture intosocial and entertainment apps is a viable business considering that,over 62.8 percent of all the apps usage globally is social andentertainment. Apple’s Apps Store makes over 17 percent ofSmartphone users market share. This will enable our product to reacha huge number of clients as Apple has a wide range of iPhonesincluding the mini iPhone that is affordable and popular among alarge number of Smartphone consumers. The diverse and unique natureof iPhones makes it attractive to a wide range of clientele includingyoung and middle aged adults.

Apple’sApps Market

Thenew apps can be accessed from the App Store anywhere in the world asApple’s market size is large and its distribution is easy. It iseasy in the sense that, no physical movement of the product. Apple isavailable in over 155 countries. The App Store has becomeincreasingly popular. In 2013, over $10 billion was spent on Apple’sapps by Apple customers and another $1 billion spent in Decemberalone (Ranger, 2014). There were approximately 3 million appsdownloaded from App Store during the 2013 period. Developers ofApple apps bagged $15 billion in revenue in 2013, more than double ofwhat they had made in 2012 (Ranger, 2014). Similarly, the number ofapps available for iOS is constantly increasing. There are over onemillion apps in App Store.

Inaddition, Apple continued to lead its most dreaded competitorsincluding Google’s Android and Amazon’s Android generate. Appletook 63 percent of revenue in Apps as opposed to Google’s PlayStore making Apple a popular place for placing our new apps (Ranger2014). Promoting diversity in Apple’s apps and its productivenature is necessary for the company’s success hence the diversityand uniqueness that our apps are bring to the market will with nodoubt be highly acceptable by Apple customers. In his blog, analystBenedict Evans argued that &quotA key selling point for the iPhone(though not the only one) is that the best apps are on iPhone and areon iPhone first. If that does change then the virtuous circle of`best apps therefore best users therefore best apps` will start tounwind and the wide array of Android devices at every price pointwill be much more likely to erode the iPhone base.&quot (Ranger,2014).This is an indication that, Apple apps are increasingly becomingpopular and are among the best Apps in the apps market. Our apps willprovide unique and promising features which is the experienceexhibited in most of Apple apps in the market. This will place ournewly developed apps in a better position to get prime revenues fromAppStore users, hence heavy returns on our business.

Inaddition, Apple began to sell its iPhone on China Mobile which sawover 700 million subsribers shop at App Store. This shows theincreasing market for iPhone and the expanding opportunities for appsput in App Store. Our venture is likely to benefit from this growingtrend.

Analysisof Apps Industry

Theapps industry is termed as one of the most lucrative industries ofthe times. Our venture into the apps market can be guided through aSWOT analysis when developing our apps. SWOT analysis stands forStrengths, Weaknesses, Opportunities and Threats.

Strengths

Themajor strengths in the app development industry is the fact thatthere is room for innovativeness. Coming up with fresh ideas in theapps industry is easy and workable. Unlike in other industries, oneis able to think about any kind of an idea and make an app usingbasic concepts. In addition the unique features that can beintegrated in apps makes the apps business quite attractive. Appsusage is also high unlike for other products as apps can reach a widenumber of people regardless of their physical location. In addition,they are easy to use and users do not require any training to usethem after downloading. Finally, apps can be made to support andintegrate to other apps. This feature can enhance the marketabilityof an app in the market. Considering Apple’s wide market for itsapps, the app business that our venture is seeking to explore standsto gain largely in both short and long term basis.

Weaknesses

Onemajor weakness of engaging in the apps business is that, it mayinclude several competitors or any aspect of the apps which may makeit quite difficult to differentiate. Some apps may consume quite anamount in their making. When the price of the app is listed, it maytherefore be too high hindering its sales. In addition, a limitedimpact of an app in the apps market may be associated with the appmaker’s inexperience in promoting the app.

Opportunities

Onemain aspect that app makers can rely on in the industry is the ideathat, proper timing and the uniqueness of an app can enhance thechances of success of an app. Besides, the developer can comfortablyuse analytics tools to examine the behavior of apps in the market.Apps focus can also be related to a given segment of the currentmarket that is being ignored such as the elderly, the disabled or anyother group.

Threats

Onecan list down the external threats to the success of the apps beingdeveloped including existing and the newly emerging rivals. Keeping atab on the performance of the general economy and one’s dependencyon driving traffic to one’s website is another weakness attributedto the apps industry.

Competition

Themain competitor to Apple’s apps is Google’s Play Store availablein Android OS. Google’s Android has been in the lead in the numberof apps downloaded from its App Store but Apple led in revenueaccrued from its apps, which shows that Google’s Android iscatching up at an alarming rate. The bar graph below explains whyApple should up its game if it has to be a powerhouse in theSmartphone market. The statistics which are given for the first fewmonths of 2014 shows that Google Play beat the App Store by 45percent in terms of downloads up from 35 percent the last quarter of2013. Nevertheless, Apple beat Android by 85 percent in terms ofrevenue. Even though the margin seems big, the gap between revenue isslowly narrowing.

UltimatelyApple still is in a winning position against Android despite the leadbecoming narrow. Although Android Apps are becoming popular by day,Apple has a better shot at making high revenues for app developers,which entices developers to make best apps for Apple first. There isworry that, if the revenue margin narrows further, the trend mightswitch, making developers to start making apps for Android first tochase more money. Today, most top Android phones being at par withiPhone with differentiation being on apps and services. Ifdevelopers decide to make apps for Android first, Apple may be in agreat disadvantage (Bushey 2014).

Source:Bushey (2014)

Comparingthe New Apps to Competitors

Thenew apps that our business will develop are unique in several ways.First, the apps are meant to address social issues in the societywhich other entertainment and social apps have not been able toaddress. These issues include violence and sexism. These issues havebeen of great concern in the society as violence in schools as wellas at home have been attributed to media violence. In addition, ourapps will be able to cater for the physically challenged includingthe deaf and the blind. This will allow them to enjoy Smartphoneexperience just like anyone else in the population.

Ourapps are however very similar to others in the industry. They aremajorly social and entertainment apps which are in high demand in theindustry. It is estimated that, over 62 percent of all apps used bySmartphone users are social and entertainment apps. This places ourapps in a great position to compete with competitors. The apps arealso easy to download, and are user friendly meaning that there areminimal steps towards installing the apps for the user. This willparticularly be useful in new iPhone users as they will have a greatfirst experience with download and use of our newly developed apps.

ProductRelations to the Industry

Theapps industry is one of the growing industries today. In fact, it hasbeen described as the industry of the future as individuals andcompanies continue to yearn for more apps to enhance theirperformance. The apps industry is growing significantly with Android,Apple and Microsoft Windows competing for the large app market acrossthe globe. Social and entertainment apps are very popular in the appsindustry which makes it a great venture for our business.

Developmentof the New Product

Ourapps will be manufactured by experts hired in the various fields ofdeveloping Smartphone apps. The business will hire or purchaseefficient computers to be used and a strong internet connectionpreferably fiber optic connection. This is to allow our developers anample time in developing the new apps.

Entrepreneurialand Intrapreneurial Processes

Thereare two approaches in innovation and development of a product

TheIntrapreneurial Process

Intrapreneurialentail innovation and development of an idea within an existingorganization. Intrapeneurs work within the confinement of theorganization (Griffiths,2011).The organization provides all the resources and support for theintrapreneurs to complete the development of an idea. Theintrapreneur process follows the following steps

Choosingan idea: The intrapreneur or the management comes up with an idea anddiscusses it. The idea can be in response to stakeholders’ needsincluding customers, shareholders, employees or the society(Griffiths,2011).

Planningthe business: This is the second step in the process of innovation inintrapreneur. It involves the planning of the business, aligning itwith the needs to be addressed.

Identifyingsponsors: intrapreneurs work for a given organization. To work on anidea, they require sponsors which are usually the organization thatthey work for (Griffiths,2011).In our venture, if we follow the intrapreneurial process, Apple willbe the protectors of our apps.

However,intrapreneurship is hindered by the fact that the cost and rewardsare not directly attributed to the developers. It is the organizationthat benefits directly from the innovation. Intrapreneurs are given atoken of appreciation but the overall benefits belong to the largerorganization.

Inaddition, there is no room for thinking outside the box inintraprenuership process of innovation. Intrapreneurs work within theconfinements of the organization which means they are subject tohierarchical commands within the institution. The need to kick off orthe inertia in intrapreneurship is usually low.

EntrepreneurialProcess

Entrepreneurialprocess entails innovation by an independent entity. Inentrepreneurship, the business or individuals are free to come upwith an idea, develop it without interference and implement it ordecide where to sell the final product (Griffiths,2011). This process involves five main steps

Ideageneration: Just like in any new venture, there has to be an idea. Anidea can be described as a description of a need or problem ofcertain constituency accompanied by a concept of a probable solution.

OpportunityEvaluation: in this stage, the inventor asks him or herself whetherthere exists an opportunity worth investing in. Capital is the majorcomponent in investment be it from investors from outside thebusiness or from individuals in the company. Other things to beconsidered at this stage include intellectual property, physicalproperty as well as personal relationships among others (Griffiths,2011).

Planning:Once the developer sees that there is an opportunity worth investingin the planning begins in order to capitalize on this opportunity. Aplan starts as a simple set of ideologies, which becomes complex asthe business continues to take shape. In this stage, strategy andoperating plan are important.

Companylaunch: with a sufficiently compelling business opportunity and aplan in place, the entrepreneurial team goes through the process ofselecting the right form of corporate entity and eventually makes theventure a legit entity (Griffiths,2011).

Growth:after launching the business, the company strives in creating the newservice or product, generating revenue and focusing on sustainableperformance. In this stage, emphasis moves from planning toimplementation.

Entrepreneurshave the advantage of working on their own, and adjusting theiropinions to come up with the best product. There are no hierarchicalprocesses in an entrepreneurial process. Nevertheless, it isexpensive to follow an entrepreneurial process. In case of failure ofthe project, the losses are bore by the entrepreneur (Griffiths,2011).

InnovationProcess

Asstipulated at ipolecat.com, making a successful app entail followingthe following innovation procedure

Idea:This is the first step in developing an app. Coming up with an idea,particularly from client’s specification may be vague but from auser’s perspective an idea can be expounded.

Prototyping:once an idea is clear, a prototype can be created. A prototypeenables the developer to visualize the way the app will actuallyoperate. Wireframes will be used to enable visualization. This willgive a clear view of how the app will appear and wok on iPhone andiPad. Storyboard sketches can be connected to one another toestablish the best layout to be used in the app.

Graphicdesign: the appearance of the elements of the storyboard is refinedduring this phase to produce a design that satisfies the developerand the client’s needs. When the design has been completed, it isready for development.

Development:programming is done in stages. Each stage sets the basis for the nextstage, helping the developer to more carefully plan for additionalwork. The storyboard is exhibited on a corkboard to help developersmanage the progress of development. This will be critical forsuccessful apps.

Release:this is the final step. It involves review of the apps by AppleReview Team for approval. Once approved, our new apps can bedownloaded from AppStore.

Activity

Start Time

End Time

Idea

September 18

Prototyping

October 1, 2014

November 10, 2014

Graphic Design

November 11, 2014

December 22, 2014

Development

January 4, 2015

February 30, 2014

Release

April 2, 2015

Demographicsof the product’s target customer.

Apple’sapps are targeted to a wide range of clientele. Among the targetedcustomers for our apps in App Store include teenagers who largely useiPods for socializing in social networks, listen to music and gamingwhich is appealing to them.

Thesecond target market is college students who use Apple productsincluding MacBook, iPads and iPhones. They largely use them forsocialization and entertainment. Hence our apps will readily beavailable to this population to serve their needs.

Adultsalso make a significant market for Apple apps. They utilize socialsites as well as entertainment apps which is the target for our apps.Our apps have also been designed to accommodate the physicallychallenged which will increase the target market for the apps.

Conclusion

SmartphoneApps is a new market that is at the exponential growth point.Ourbusiness venture will focus on development and publishing of Apps atApp Store.Therefore,the business has high prospect of performing well in the market.

Pro-Forma Income Statement

ProposedApps

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

For 2014 through2016

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

(all numbers in $000)

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

REVENUE

2014

2015

2016

2009

Gross sales

$250

$325

$360

$850

&nbsp

Less sales returns and allowances

20.0

23.0

140

320

Net Sales

$30.0

$210

$220

$530

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

COST OF SALES

&nbsp

&nbsp

&nbsp

&nbsp

Beginning inventory

$175

$180

$210

$435

&nbsp

Plus goods purchased / manufactured

60

82.5

92.5

190

Total Goods Available

$235

$262.5

$302.5

$625

&nbsp

Less ending inventory

180

210

217.5

440

Total Cost of Goods Sold

$55

$52.5

$85

$185

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

Gross Profit (Loss)

$95

$157.5

$135

$345

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

OPERATING EXPENSES

&nbsp

&nbsp

&nbsp

&nbsp

Selling

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

Salaries and wages

$17.5

$20.5

$23

$52

&nbsp

Commissions

6

7

8

18

&nbsp

Advertising

5

6

7

20

&nbsp

Depreciation

7

7.5

8

16

&nbsp

Other

2.5

3

3

7

Total Selling Expenses

$38

$44

$49

$113

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

General/Administrative

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

Salaries and wages

$6

$7

$8

$18

&nbsp

Employee benefits

2

2.5

2.5

6

&nbsp

Payroll taxes

1

1.5

1.5

4

&nbsp

Insurance

3

3

3.5

7

&nbsp

Rent

4

4

4.5

9

&nbsp

Utilities

1

1

1

3

&nbsp

Depreciation &amp amortization

1.5

2

2

5

&nbsp

Office supplies

0.5

0.5

0.5

1

&nbsp

Travel &amp entertainment

1.5

1.5

1.5

4

&nbsp

Postage

0.5

0.5

0.5

2

&nbsp

Equipment maintenance &amp rental

0

0

0.5

1

&nbsp

Interest

0

0.5

0.5

2

&nbsp

Furniture &amp equipment

1.5

2

2

5

Total General/Administrative Expenses

$22.5

$26

$28.5

$67

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

Total Operating Expenses

$60.5

$70

$77.5

$180

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

Net Income Before Taxes

$34.5

$87.5

$57.5

$165

&nbsp

Taxes on income

11

16

13

28

Net Income After Taxes

$23.5

$71.5

$44.5

$137

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

Extraordinary gain or loss

$0

$0

$21.5

$0

Income tax on extraordinary gain

0

0

6

0

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

NET INCOME (LOSS)

$23.5

$71.5

$60

$137

References

Boulos,M. N., Wheeler, S., Tavares, C., &amp Jones, R. (2013). HowSmartphones are changing the face of mobile and participatoryhealthcare: an overview, with example from eCAALYX.&nbspBiomedicalengineering online,&nbsp10(1),24.

Polecat.(N.D). Process. Retrieved http://www.ipolecat.com/process (AccessedJune 5, 2014).

Griffiths,P. (2011). Strategy-TechnologyAlignment the Case Study Series.Reading: Academic Conferences Publishing International.

Ranger,S. (2014 Jan.7). Apple`s App Store downloads top $10bn: Battle fordevelopers` hearts and minds heats up. Retrievedhttp://www.zdnet.com/apples-app-store-downloads-top-10bn-battle-for-developers-hearts-and-minds-heats-up-7000024884/(Accessed 5 June 2014).

Bushey,R. (2014 April 15). Google is starting to generate more revenue onAndroid apps, which could be dangerous for Apple and the iPhone.Retrievedhttp://www.businessinsider.com/google-play-app-downloads-beat-apple-2014-4(Accessed June 11, 2014).