Business Analysis For Accountants

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Introduction to Business Analysis For Accountants

In present era, various small-scale and large-scale organizations are established across the globe. In dynamic environment, it is very challenging to start a small computer business. Before starting any new business, all the entrepreneurs is required to make efficient and strategic planning that helps to achieve its business objectives. They are required to make strategic business plan by considering all the opportunities available in the market. Sim venture is a business simulation game. The simulation game is a software programme that assists the entrepreneurs in establishing their own businesses for the first time. It helps the owners in making market analysis, environment analysis and competitive strategies. All the Individuals who want to start their business can take help of this software so as to take qualified and appropriate decisions. Thus, small computer business owners can take advantageous by using this software to a great extent. By doing this, they can explore their business expansion possibilities. The present report will outline the key steps which are required to be taken by the entrepreneurs for establishing any new small computer business. The report describes the mission, vision and its short term as well as long term business objectives. Further, critical discussion undertakes internal and external environmental analysis, Market analysis, strategic capabilities and competitive strategies.

Mission and Vision

Initially, each and every business organization is required to set company's mission and vision clearly. Therefore, all the operating functions of the enterprises will focus on achieving this mission and vision. The mission and vision statement of the company helps the organization in focusing on potential improvement in future. These are the important goals or purpose for which the organization is established. It must be clear, pleasant and understandable. At the starting point, the small computer business Sim venture can establish its mission statement as ''provide innovative and high quality of technology to support all the individuals in order to become a most successful computer service provider company''.  The mission indicates that Sim venture has to provide best quality of products and provide computer services to the customers. The mission of the company emphasizes on delivering professional and advanced technology platform that is essential part of daily course of action (Null and Lobur, 2014). It provides different types of computer products to the consumers that mainly include personal computer and tablets. However, the vision statement of the company can '' to make consumer lives easier and better with our offered products and computer services''.  The corporate vision of the company focuses to please its customers on a regular basis. Further, the firm needs to review its mission and vision statements periodically. Through reviewing and analysing, company can design its statements much better. It is a source of motivation for the employees from time to time. Therefore, it should be clearly understood and should be accessible by everyone as this will help to improve the business performance. With the help of this, business can achieve its targets in a great manner.

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Short term as well as long term objectives

Along with the mission and vision, Simventure is required to set its short term as well as long term business objectives. These are the ways to fulfil its mission and vision through providing technology enhancement and best services to the customers.

Short term objectives: These objectives are designed in order to ensure long term business success. There are distinct types of short term objectives which can be decided by Simventure. Revenue and profit maximization is one of the most important short term objectives for the company. The objectives require company to increase its sales and also the returns. Another short term objectives may be enhancing customer satisfaction. Small computer business Simventure is required to determine the changes in customer demands and their needs and provide services according to their desires. They should provide great customer services and make improvement over it that helps to increase customer satisfaction level. Building customer relationships is another objective. SimVenture is required to build meaningful relationships with the customers by increasing their satisfaction and providing instant solutions. . High-quality customer relationships help to create customer value and gain customer loyalty to a great extent (Organick, 2014). This in turn, SimVenture can retain its existing customers for long term period and attract new customers. In addition to it, company is required to increase productivity on a regular basis. Increasing the efficiency, improving the products and services quality, providing innovative products, support technical assistance, solving customer problems helps in increasing the business productivity. This in turn, company can increase its business performance to a great extent. Further, workers are the source of profits as they provide services to the customers. Therefore, Simventure has to provide flexible and better working environment in order to attract and retain skilled, talented and experienced employees.

Long term objectives: Performance objectives are the part of long term objectives which is required to be achieved over a period of five years. Simventure's long term objectives may include building corporate image in the market. Further, it may include increasing return on investment, technological improvement and gaining competitive position. Through regularly satisfying the customer needs, gaining customer loyalty Simventure can build corporate market image (Kelley, n.d.). Another, in the present age, market is highly competitive. Therefore, it become necessary for the company to analyse competitors and their policies so as to compete effectively and take competitive advantageous over the competitors. In addition to it, increasing the market share and strengthening the financial position are also long term objectives.

Critical discussion of internal and external factors

Environment analysis can be done by identifying the impacts of internal as well as external factors. Internal factors includes all the factors, people, system and structure that are available inside the organization hence, it can be controlled by the organization. However, external factors are the market factors which occur outside from the business enterprise. The internal and external factors for computer service organization are listed below:

Internal analysis:

Management change: Management make business policies, rules and regulations for operational purpose. Further, the business managers are responsible for managing the employees. In context to Simventure the managers are responsible for guiding, directing and monitoring the employee’s performance. Therefore, it will greatly affect the performance of computer service organization. Changing the management team creates negative impacts as different managers use distinct leadership styles and make different policies (Patterson and Hennessy, 2013). Evolution is a powerful tool for identifying the managers’ leadership skills. People run their virtual organization by working individually or in teams. It is a tool that identifies the personnel skills and recruit best and qualified managers.

Cultural Changes: Another internal factor is working culture of the organization. Work culture plays an important role in the organization success. It is a process that includes all the beliefs, principles and employees attitude. It relates to the environment that how employees interact with each other. Simventure requires to having Strong working culture in which the employees are strictly abide by set rules and regulations. Further, it needs to appreciate and motivate the workers performance on a regular basis. Friendly employees’ policies help to increase the employee productivity. This in turn, helps to increase the business profitability. Adequate training is an effective tool that must be provided to the employees to improve their skills (Galuscak and et. al., 2012). Further, evolution tutors is highly authentic tool that helps Simventure to run their virtual business with the uncertain environment. In addition to it, performance monitoring tool and Simventure evolution training programme can also be used that monitor the employee performance and helps to improve their technical and commercial skills.

External analysis:

Technology: One of the most important factors that highly impact the computer service organization is technology. In the world of throat cut competition, technology changes at very faster rate. Therefore, Simventure is required to improve its technology. Simventure can ensure technological improvement by providing new innovative games and includes more technological features (Lu and et. al., 2014). Further, technological process is a way to manufacture the products. Simventure should introduce new techniques for manufacturing faster microchips. It can improve the efficiency and the business productivity which will further reduce the cost and increase the profit margin.

Competition: The fierce level of competition also impacts business organization in a great manner. The competitors’ products, services, prices, technology and policies must be accessed and evaluated by the company (Wang, Chen and Chen, 2012). It helps in getting competitive advantage and operates successfully in the market. Simventure have to analyse competitors and make policies to take effective business decisions. Further, the company can compete effectively at the market place and serve large number of customers.

Political changes: Changing political environment is another external factor that must be encountered by Simventure.  However, the political party rules changes favourably that impacts in a positive direction and vice versa. For instance, if government cuts it’s spending and increase tax rates than less disposable incomes will be available to the customers hence, customers demand will be reduced. Further, the pricing policies, labour law and environmental laws also affect Simventure profitability in an adverse manner. 

Market Analysis

All the organization faces many challenges due to the market behaviour and changes. Simventure provides computer services to both the business clients and other home PC users. It assists the technical and consulting services to their customers. In the present age, computer service market is highly changing and extensive. Therefore, Simventure needs to analyse the market changes on a regular basis for achieving the target. Different strategic tools are available to the company for market analysis purpose which is described below:

Market segmentation: Market can be separated into two groups that are home PC users and other small business clients. In case of home users ‘segment, customers within age group of 30 to 60 years are considered. The group of individuals are considered to be comfortable with the technology. They use computers for sending email; playing games, write letters, printing photos and so on. However, the small business users use more than one computer for their business purpose. They maintain detailed records, keep books, preparing presentations, design graphics, prepare customer database and maintain inventory (Computer repair business plan: Market Analysis Summary, n.d.). Therefore, they need more features, advanced technology, high security, fast server, wireless network and strong backup system. By classifying the market into segments Simventure can determine their target customers. 

Service business analysis: Another Simventure has to make service business analysis. It identifies that how computer services will be provided to the customers that satisfy the customer needs. It helps in enhancing the customer loyalty. Repairing must be done efficiently and the computer parts can be purchased from major manufacturers. Easier and quicker deliveries decrease the waiting time (Tavitiyaman, Qiu Zhang and Qu, 2012). Therefore it helps to strengthen the business position as compared to the competitors.

Competition and buying pattern: Consumers avail computer services from the businesses that have good reputation. Moreover, the past experiences and the prices also play a major role in their decisions. Permanent and qualified services at the affordable prices will attract large number of customers and create great reputation (Computer repair business plan: Market Analysis Summary, n.d.). Further, the competitors who are established and provide services to large number of customers must be analysed.  Simventure is required to analyse their product quality, prices, services offered, their technology and technological processes to make efficient business planning. This will help Simventure in achieving long term success and ensure business sustainability.

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Strategic capabilities

In the present dynamic environment, all the business organization competes with each other for customers, revenue, profitability and increasing the market share. Therefore, corporations need to increase its strategic capabilities in order to perform better in the market. Strategic capabilities are the business abilities which are required to enjoy a successful business. It refers to the organization capabilities, resources and skills that help in creating long term business success (Dutrénit, 2000). Moreover, it assists in make competitive improvement so as to enjoy competition successfully. It does not involves business strategies hence, it can be said that strategic capabilities and competitive strategies are different from each other.

In context to SimVenture, the Strategic capabilities help in running the virtual business successfully in the presence of number of competitors. There are different elements included in it. For instance, assets such as business property, cash, its products and services are one of the most important elements. Strong ability of using the business assets contributes in increasing the productivity (Joyce and Slocum, 2012). Further, Simventure can attract number of customers and render services to a great extent. The organization can gain brand image by increasing customer loyalty.

Employees are the vital source of organization success as they provide services to the customers. Therefore, another element of strategic capability is availability of human resources and organization structure. By having skilled and experienced employees Simventure can offer best customer services and increase their satisfaction. The technical, communication, interpersonal and commercial skills of the workers contribute in enhancing competitiveness (Rodríguez Ariza, 2014). On contrary, personnel skills can be enhanced through organizing an effective training and development programme. SimVenture Evolution training programme helps in developing increase their capabilities. Further, the workers can deliver excellent services to the consumers and can make efficient solution of their problems.

In addition to it, prices are also considered as another mechanism that can be used for strengthening strategic capabilities. It refers to the company's ability that how organization manipulates the prices with the changing conditions so as to maximize its profits. Simventure can change  the product and services prices according to the customer buying pattern and purchasing behaviour (Carraresi and et. al., 2015). Simventure must be provided computers service at the affordable rates. Further, volume discounts and offers can also be which will help in increasing the total business sales. 

On contrary, selling the product and services direct to the customers eliminates the need of middle man which helps in reducing the reduce business cost. As a result, return can be enhanced to a great extent. Moreover, internet services by using websites SimVenture can improve business sales and profits. Small business computer providers can reduce the waiting time for consumer and can make quicker delivery (Cöster, Engdahl and Svensson, 2014). Furthermore, the products are designed according to the customer's specification and their desire. Computer products can be assembled at lower the cost which helps in improving the business profits.

Thus, it can be concluded that having larger the strategic capabilities Simventure can increase their competitive strength. This in turn, business can achieve long term success and compete effectively in the market.

Competitive strategies

As stated earlier, strategic capabilities and competitive strategies are different from each other. Competitive strategies relate to the business action plans that are required to achieve competitive gains (Peter and et. al., 2014). In the dynamic and uncertain business environment, each and every corporation whether small or large need to formulate some effective business strategies in order to perform better as compare to their rival firms. Therefore, the main purpose of the competitive strategies are to gain competitive advantageous. The competitive strategies mainly include three strategies that are cost leadership, differentiation and focus strategy (Cusumano, Kahl and Suarez, 2015). Simventure requires preparing efficient business competitive strategies and implementing it in the organization. Besides competing effectively the strategies also help in achieving its organizational goals.

Cost leadership: This strategy mainly focuses on minimizing the business cost so as to increase the profit margin. In context to computer service organization, it can get benefited through manufacturing computer products and services at lower the cost. The strategy states that cost is a major factor that decides the product prices (Patin and et. al., 2015). Thus, manufacturing the products and services at lower cost compare to the competitors Simventure can achieve larger market share. Efficient use of funds, proper utilization of organization assets and controlling as well as monitoring the expenditures are the required tools through which Simventure can decline the product cost. 

Differentiation: In the present market, all the customers demand different products and services. Therefore, it becomes necessary for the companies to differentiate their products and services from the competitors. The differentiation may be done in any way in order to compete successfully. In case when consumers are not price sensitive and market is highly competitive Simventure is required to bring some differentiation in offered products and services. They have to produce products according to the customer specification and their needs. For instance, the product design, technical experts’ services, efficient and talented personnel, innovative production process, qualitative products can bring some kind of differentiation (Kimathi, 2012). Successful product differentiation allows the organization to charge premium prices. It drives profitability and outweighs the business expenses through adding some uniqueness in offered products and services. This in turn, helps in increasing the brand loyalty from customers.

Focus strategy: This strategy mainly focus on definite market segments. The strategy states that individuals’ demands, needs, wants and desires are different from each other. Therefore, SimVenture can use this strategy to identify the target market and produce computer products and render services so as to fulfil target customer needs. Further, the strategy says that effective marketing techniques can be applied by considering the interest of that particular segment (Tavitiyaman, Qiu Zhang and Qu, 2012). The strategy helps in creating an effective marketing mix and serving customers in an efficient manner. By doing this, SimVenture can improve the business and retain customers for long term period. This in turn, organization can enjoy competitive advantageous and achieve success.

Holistic Approach to Business strategic plan

It is a business planning model that assumes that all the system components are interrelated and inter dependent to each other. The first step that is involved in holistic approach is deciding the mission, vision and its objectives. The mission is the primary goals for which the company is established in the market. However, aims or objectives may be decided for short term and long term period. Strategic goals and objectives provide greater understanding of the organization mission and vision statement. In context to SimVenture, the holistic approach to technology focuses on the interdependencies of various components (A Holistic Approach to Building a strategic plan, 2012). It includes system thinking, business process, information governance, sustainability and managing risk. 

Under the system thinking, the approach tells that how the computer parts are interrelated and how the system will operate. Another, the holistic approach to Business process management (BPM) focuses on business process. It does not pay focus on individual elements. However, holistic approach to information governance implies roles, responsibility and control to manage corporate information. The approach tells that information is the valuable assets therefore it must be governed and managed in an effective manner. Holistic approach in relation to supply chain sustainability requires proper management of inventory reduces the cost and make quicker deliveries (Gunasekaran and Spalanzani, 2012). On contrary, technology approach requires technological investment in the organization products and services. At last, the approach makes effective plan, organize and controls the operating functions of the organization. Holistic perceptions to risk management helps in minimizing the business risk in order to ensure greater availability of profits.

REFERENCES

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