Final Business Proposal

Will Burys Final Business Proposal

Troy Taylor
ECO/561
June 23, 2014
Proessor !li Boloorian
1
Final Business Proposal
"n#ro$u%#ion
Wi#&in any #ra$e #&e %o''er%ial en#erprise or e%ono'i% (oals s)uare
'easure #o e*#en$ re+enue, %onir' #&e as#ene$ an$ +aria-le pri%es or #&e
-usiness, an$ %onir' a .ay #o 'a*i'i/e proi#0 1o as #o a%&ie+e #&ose (oals a
%orpora#ion 'us# es#a-lis& #&e +alua#ion s#ru%#ure, pro$u%# $ieren#ia#ion, an$ #&e
.ay #o a##enua#e #&e pri%es or #&e 'er%&an$ise0 2urin( #&is proposal %an layou#
#&e 'e#&o$s #o a%&ie+e #&ose (oals so as #o or' a lo# o e%ono'i% or#una#e
or(ani/a#ion0
Co'pany Ba%3(roun$
! soun$ pre$i%#ion %rea#e$ -y #&e or(ani/a#ion is, .i#&in #&e #erri-ly %lose #o
u#ure, so%ie#y are (oin( #o -e 'o+in( %o'ple#ely #o $i(i#al0 Boo3s, ne.s,
'a(a/ines, T4 s&o.s, an$ il's #&a# -oo' in 'e$i%al ai$ are (oin( #o -e (ran$
an$ s.i#0 1eein( a 'ar3e#pla%e or a sin(ular #ype o $i(i#ali/in( -oo3s an$
'a(a/ines #&e or(ani/a#ion %rea#e$ a #e%&nolo(y #&a# per'i#s or #&e .ri##en
.or$ #o -e -orn5a(ain in#o a ile #&a# 'ay -e -ro.se $i(i#ally or lis#ene$ #o .i#& a
sensi-le soun$in( ar#ii%ial +oi%e0 T&e or(ani/a#ion proprie#ary #&e #e%&nolo(y
an$ is presen#ly %o'pe#i#i+e a(ains# al#erna#i+e or(ani/a#ions #&a# pro+i$e si'ilar
ser+i%es0 #&e 'os# %&allen(er lies in a %o'pany %alle$ -oo3s on %$0 T&is pla%es
#&e or(ani/a#ion in non%o'pe#i#i+e %o'pe#i#ion, .&i%& is, 6%&ara%#eri/e$ -y a
%o'para#i+ely si/a-le a'oun# o sellers 'anua%#urin( $ieren#ia#e$
'er%&an$ise7 89%Connell, Brue, : : Flynn, 200;, p0 1<<=0 Presen#ly, #&e
or(ani/a#ion is run ou# o a li##le +enue, an$ lo#s o #&e s#a area uni# s#ill (ainully
u#ili/e$ .i#& al#erna#i+e or(ani/a#ions0 T&e or(ani/a#ion &as 3no.n #&a# &elp is
2
Final Business Proposal
nee$e$ &o.e+er is unsure o &o.e+er or .&ere+er #o use #&e spe%iie$ &elp0 T&e
or(ani/a#ion .oul$ %on>oin#ly preer #o es#a-lis& #&e sui#a-le .or#& #o -e
'er%&an$isin( #&eir pro$u%# a#0
"n%reasin( ?e+enue
Curren#ly, #&e or(ani/a#ion is %&ar(in( @10 or ol$er #i#les .&ose %opyri(&#s
&a+e non %&ur%& (oin( an$ @15 or #i#les #&a# &a+e royal#y ees0 9oreo+er, #&e
or(ani/a#ion is 'ar3e#in( $ou-le as se+eral ne. #i#les as ol$er #i#les0 One
s#ra#e(y or #&e or(ani/a#ion is #o lo.er #&e ee or #&e ol$er #i#les #o @A, sin%e
#&ere are no# any royal#y ees or #o pay, an$ in%rease #&e .or#& or -oo3s #&a#
are in &i(& $e'an$, #o @160 " #&e or(ani/a#ion .as #o sell one,000 ol$er #i#les a#
#&e ne. e+alua#ion #&e o+erall re+enue 8T?BP*C= .oul$ -e @A,000, an$ i #&e
or(ani/a#ion .ere #o sell #.o,000 o #&e ne.er #i#les #&e o+erall re+enue .oul$ -e
@32,0000 89%Connell, Brue, : : Flynn, 200;, p0 116= Wi#& #&is al#era#ion in %os#s,
#&e or(ani/a#ion 'ay e*pe%# #o sell a$$i#ional o #&e ol$er -oo3s a# #&e lo.er
+alue, .&i%& 'i(&# in%rease re+enue o+er #i'e0 "# a$$i#ionally 'ay e*per#ise li##le
or no 'o$ii%a#ion in sales o ne.er -oo3s .i#& #&e li##le @1 in%rease in .or#&,
par#i%ularly %onsi$erin( #&e $e'an$0 By .a#%&in( #&e s&oppers response #o #&e
%&an(es in .or#& 83no.n as .or#& elas#i%i#y=, #&e or(ani/a#ion .ill see &o.e+er
s&oppers are respon$in( #o #&e %&an(es in e+alua#ion an$ re(ula#e
%onse)uen#ly0 89%Connell, Brue, : : Flynn, 200;, p0 114= One 'ar3e# #&a# #&e
or(ani/a#ion 'ay -enei# ro' is on5line0 .&ereas #&e or(ani/a#ion &as alrea$y
s#ar#e$ -uil$in( an o%%asional +alue .e- si#e #&a# $es%ri-es an$ oers #&e
'er%&an$ise or pur%&ase, #&e %o'ple#e po#en#ial or #&is sor# o pro$u%# is no#
3
Final Business Proposal
-ein( rea%&e$0 T&e or(ani/a#ion ou(&# #o pro$u%e a .e- s#ore, 'ay-e on a .e-
si#e li3e EBay0 ! -asi% EBay s#ore pri%es @150;5 a 'on#& #o %on#rol an$ a s&are
ee suppor#e$ #&e nu'-er o sales %rea#e$ 'on#&ly0 8Fees For EBay 1#ores,
2013= +i%#i'i/a#ion #e%&nolo(y #o sell #&e 'er%&an$ise 'a3es #&e ore'os# sense
an$ 'i(&# -e in serious #rou-le a %o'para#i+ely lo. +alue0 Do.e+er, #&ere are
pri%es #&e or(ani/a#ion 'us# #&in3 a-ou# -eore (ol s#ro3e #&e 'er%&an$ise in
a$$i#ional lo%a#ions or pa#rons #o (e# i#0 " #&e $e'an$ .ill in%rease, #&e
or(ani/a#ion %oul$ #&in3 a-ou# &irin( ur#&er a%ili#a#e0 ! #e%&ni)ue #o s#ay #&e
la-or pri%es $o.n is #o ren# s%&ool s#u$en#s as in#erns #o assis# .i#& #&e
#ransla#ions an$ ai$in( %us#o'ers0 Typi%ally s#u$en#s &un# or lo. payin( or
unpai$ in#erns&ips #&a# 'ay a%ili#a#e earn s%&ool %re$i#0 Fur#&er pri%es #&e
or(ani/a#ion 'us# se# up or are 'oun#e$ pri%es, li3e #&e pri%e o #&e
ins#ru'en#ali#y, u#ili#ies, #&e sa'e EBay s#ore, an$ .e- si#e ees0 De also .ill
ou(&# #o #&in3 a-ou# #&e +aria-le pri%es li3e li%ensin( ees, #&e pri%e o .or3ers,
an$ any ou#sour%in( ees i ele%#oral #o #ra+el #&a# rou#e0
Proi# 9a*i'i/a#ion
"n or$er #o see .&a# nu'-er #i#les #&e or(ani/a#ion ou(&# #o re'o$el 8pro$u%#s
#o oer=, i# 'i(&# %o'pare #o#al re+enue an$ #o#al %os#, or, %o'pare #&e 'ar(inal
re+enue an$ in%re'en#al %os#0 89%Connell, Brue, : : Flynn, 200;, p0 1A0=
spe%iali/in( in #&e pri'ary #e%&ni)ue o #o#al re+enue an$ #o#al pri%e0 T&e
nu'-ers 'en#ione$ &i(&er #&an, #&e or(ani/a#ions #o#al re+enue or #&e ol$er
#i#les i #&ey .ere #o lo.er #&e %os#s #o @A, T?B @A,0000 Couple #&is .i#& #&e
%on%ep# #&a# #&e #ransor'a#ion o #&e ol$er #i#les ou(&# #o -e #o3en #o na$a $ue
4
Final Business Proposal
#o #&e +ery a%# #&a# i#EFll -e $one in#ernally0 "# 'i(&# -e ne%essary #o es#i'a#e o
'a3in( #&e iles a# @3 a -oo3 sin%e #&e or(ani/a#ion is presen#ly #erri-ly lo. %os#
+enue an$ also #&e or(ani/a#ion is o+er.&el'in( #&e u#ili#ies #&a# 'a#%& #&a#0 For
i$en#i%al -oo3s .e #en$ #o a%%us#o'e$ i(ure #o#al re+enue, TCB@3,0000 T&e
or(ani/a#ions are es#a-lis&in( a %o'ple#e proi# o @5,0000 T&e se%on$ an$ inal
possi-ili#y is #o resear%& 'ar(inal re+enue an$ in%re'en#al %os#0 T&is 'e#&o$ is
inis&e$ -y e*a'ina#ion #&e nu'-er e+ery e*#ra uni# o ou#pu# is %os# a%%oun#in(
an$ a$$in( i# #o #&e o+erall re+enue an$ #o#al pri%e0 1a$ly, #&is ino .as no#
%rea#e$ a%%essi-le or #&is proposal0
Barriers #o En#ry
Barriers #o en#ry s)uare 'easure a%#ors #&a# %o''an$ %orpora#ions ro'
%o'in( in#o asso%ia#e $e(ree #ra$e0 89%Connell, Brue, : : Flynn, 200;, p0 202=
.i#& reeren%e #o #&e %urren# #ra$e, #&e or(ani/a#ion 'i(&# un$ou-#e$ly -uil$
so'e -arriers #o s#ay al#erna#i+e ir's ro' in#rusi+e .i#&in #&e #ra$e0 Bein( #&a#
#&a# #&e pa#en# o #&e -elon(in(s &as -een es#a-lis&e$ #&a# alone ou(&# #o se# a
-arrier0 so as #o %rea#e a$$i#ional an$ s#ron(er -arriers, #&e or(ani/a#ion 'us#
ee%#i+ely 'ar3e# #&e 'er%&an$ise, es#a-lis& $isappro+al, an$ $is#in(uis& #&e
'er%&an$ise ro' si'ilar %orpora#ions0 T&e analysis #&a# #&e or(ani/a#ion &as
%on$u%#e$ on #&e 'ar3e# s&o.s #&a# $i(i#al lis#enin( &as a##ra%#e$ an i$en#i%al
au$ien%e #o #&ose #&a# s)uare 'easure $o.nloa$in( 'usi% #o $i(i#al $e+i%es0
Gn$ers#an$in( #&is s&o.s an ou#si/e$ $e'an$ or #&e 'er%&an$ise0
5
Final Business Proposal
"n#erna#ional Business
For a ir' .i#& a pro$u%# #&a# 'ay -e use$ in#erna#ionally an$ lis#e$ on5line #&ere
is li##le or no a$>us#'en# re)uire$ on%e s#ra#e(i/in( -e#.een e*por#a#ion #&e
(oo$s an$ 'ar3e#in( #&e' $o'es#i%ally0 Par#i%ularly on%e %onsi$erin( #&a# #&e
s&ippin( is none e*is#en# as a resul# o all #&e 'er%&an$ise are $i(i#al0 Typi%ally
#&ere is a spe%ial#y issue #&a# (oes in#o %o''er%ialis' an$ e*por#a#ion0 Wi#& #&is
pro$u%# #&a# isn# +ery a $ii%ul#y0 T&ere is -u# one 'ain issue #&a# &as #o -e
#&ou(&#5a-ou# .i#& in#erna#ional 'er%an#ilis' or #&is ir'0 T&a# one issue is
e*%&an(e ra#es0 W&a# ou(&# #o #&e or(ani/a#ion %&ar(e or e+ery #i#leH T&is
in%orpora#es as easy ans.er0 1in%e #&e 'er%&an$ise is -ein( sol$ on5line #&e
ra#e o e*%&an(e 'ay -e pro(ra'e$ in#o #&e s&op pa%3a(e0 T&e +alua#ion
$oesn# ou(&# #o -e 'o$iie$ #&e leas# -i#0 Wi#& #&e eBay 'er%&an# a%%oun# #&ey
e*%&an(e or you 'e%&ani%ally0 T&is issue is alone a pro(ra'in( issue0
Cre$i# 9ar3e# an$ Curren# E%ono'i% Con$i#ion
On%e a(ain as a li##le s#ar#up %o'pany #&e %re$i# 'ar3e#s .oul$ &a+e li##le i'pa%#
on #&e or(ani/a#ion0 W&ereas #&e or(ani/a#ion .ill &a+e a %&oose e. in+es#ors
#&ereEFs no a%#ual %o''er%e o -on$s, s#o%3s or #&e o#&er %re$i# 'ar3e# #&in(s0
T&e sole %onne%#ion o #&e %re$i# 'ar3e#s play on #&is or(ani/a#ion -e%ause i#
s#an$s is .i#& si'ilar or(ani/a#ions0 T&e or(ani/a#ion .ill -uil$ >u$('en#s o oer
an$ $e'an$ suppor#e$ #&e s#ren(#& o or(ani/a#ions li3e -oo3s on %$ an$
a'a/on0 Wi#& #&ese nu'-ers #&e or(ani/a#ion .ill 'o$iy #&eir %os#s ye#0 Wi#& a
pro#ra%#e$ s#an$in( re%ession poi(nan# #&e .orl$.i$e e%ono'y ea%&
or(ani/a#ion s&oul$ .a#%& #&eir pri%es ea%& +aria-le an$ (lue$ e+en a lo# o
6
Final Business Proposal
%losely0 T&is or(ani/a#ion .oul$ -e no e*%ep#ion0 One s#ra#e(y #&is or(ani/a#ion
.ill (o or lo.er #&eir +aria-le pri%e o ele%#ri%i#y is -y (oin( ine*perien%e$0 Jus#
-y (e##in( ener(y sa+in( ins#ru'en#ali#y #&e or(ani/a#ion .ill sa+e %as& ea%& .i#&
#a* re-a#es an$ on po.er pri%es0 T&e opposi#e s#ra#e(y #&a# is %rea#in( -y #&e
!sso%ia#e in Iursin( a%%oun# pri'arily -ase$ sys#e'0 Wi#& #&e ree a%%oun#
.oul$ re#urn a sense o loyal#y an$ $ra. a lo# o in#eres# .i#& a ree -oo30 T&is
'ay us&er in ne. pa#rons an$ in%rease #&e $e'an$ on #&e 'er%&an$ise
.&ereas o-#ainin( #&e .or$ ou# o #&e or(ani/a#ion0
Con%lusion
"n %on%lusion, #&e or(ani/a#ion &as proprie#ary -elon(in(s .i#& a 'ar3e# o
$e'an$0 1o as #o a%&ie+e 'o'en#u', #&e or(ani/a#ion 'us# %onir' a +alua#ion
s#ra#e(y #&a#Fs %o'pe#i#i+e, none#&eless proi#a-le0 T&e or(ani/a#ion 'us# s#ill
in%rease #&e $e'an$ or #&e 'er%&an$ise -y en#erin( a$$i#ional 'ar3e#s0 T&e
or(ani/a#ion, .&ereas in i#s inan%y, 'us# a$$i#ionally 3eep #&e +alue o -usiness
lo., &o.e+er no# i(nore #&e .an#s o #&e #ra$e0 T&e or(ani/a#ion 'us# sus#ain
.i#& 'ar3e# #ren$s an$ no#i%e a ro-us# -arrier o en#ry on%e es#a-lis&e$0 T&e
or(ani/a#ion .oul$ .is& #o -ear in 'in$ o #&e pri%es o in#erna#ional
%o''er%ialis'0 Finally, #&e or(ani/a#ion .oul$ .is& #o (rasp #&e %onne%#e$ness
o #&e %re$i# 'ar3e#s .&ereas s#ra#e(i/in( or #&e presen# s#a#us0
7
Final Business Proposal
?eeren%es
Fees For E-ay 1#ores0 82013=0 ?e#rie+e$ Fe-ruary 24#&, 2013, ro' E-ay
We-si#eJ &##pJ//pa(es0e-ay0%o'/&elp/sell/s#oreees0&#'l
9%Connell, C0 ?0, Brue, 10K0, : Flynn, 1090 8200;=0 E%ono'i%sJ Prin%iples,
pro-le's, an$ poli%ies 81A#& e$0=0 Ie. Lor3J 9%Mra. Dill/"r.in0
8