Unit:5 Information Technology Project Management

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Running Head: Strategic Business Plan 1

Strategic Business Plan 4

Information Technology Strategy Development

Strategic Business Plan (Week 4 IP)

Crystal Randolph

Colorado Technical University

Noel Broman

Date: July 31, 2018

Executive Summary

The company intends to leverage on increased e-commerce to grow sales revenue of the fast-moving consumer goods. Since the company distributes and sells a variety of consumer goods, its target market captures all adults above the age of 18 years. However, as the millennials are more tech-savvy and hence likely to appreciate e-commerce, they therefore form the company’s primary target market. The company intends to grow its pool of customers at an average of 4.25% per year from 2018 to 2020. By 2020, the company expects total repeat-customers of about 5,904. The key strength of the company is that it is in the product offering it extends to its customers. However, a key weakness is that the company does not have an effective marketing strategy in place to allow it to use its existing resources to gain a competitive advantage over its more established customers such as Amazon.com. On the other hand, a projected increase in urban demand is likely to see that its bottom line continues to increase from its current $215, 609. The porter’s five forces model is a useful analytical tool in attempting to understand the nature of the business environment within which the company operates.

Marketing Analysis

The principal customers for the organization are all adults above the age of 18. In particular, the target market entails all the tech-savvy consumers who spend significant amount of their time on their smartphones and/or computers. These are the group of consumers that are likely to appreciate e-commerce. Special attention shall be given to the millennials as this cohort represents the consumers of the future (Janda & Muthaly, 2010).

Past data has shown that the for an e-commerce company, its target market of millennials proves to be a more stable market than any other age group. Therefore, over the next 3 years, the company should focus on this segment more as statistics suggest that 59% of the permanent population is above the age of 18 years old (Janda & Muthaly, 2010).

In line with the above, the table below reflects the projected increase in the number of repeat-customers of the company over the next 3 years:

		2018	2019	2020
Potential Customers	Growth
Ages 18 to 25	3%	1090	1123	1157
Ages 26 to 30	6%	1865	1977	2096
Ages 30 to 35	6%	1546	1639	1737
Above 35 years of age	2%	878	896	914
Total	4.25%	5379	5635	5904

Strengths, Weaknesses, Opportunities and Threats (SWOT)

The SWOT analysis of the company is summarized in the following table;

Strengths

· Limited competition due to huge capital outlay for initial investments

· Diversity in product offering to potential customers

Weaknesses

· High Operating costs

· High barriers of entry due to huge capital outlay required

· Weak marketing team

· Low market share

Opportunities

· E-Commerce Online ordering and purchase system

· Increasing Demand for domestic electronic sensors, especially low-tech devices

· Global expansion; expanding into newer markets globally for the low-tech and high-tech electronic sensors

· Growing urban demand

Threats

· Industry slowdown due to difficult economic times

· Rapid technology changes; i.e may render today’s technology obsolete

· Easily Replicable business model

· Stagnant Urban Demand

Company’s Financials

As of 2017 financial year, the company had total assets worth $309, 462. Its total liabilities stand at $30,671 hence reflecting the relatively low leveraged position of the company. Besides, as of 2017, the company’s profitability has been doing fairly well as reflected by a net profit of $215, 609 (Pandley, 2010). Information on the company’s financial position as well as profitability as per the last financial year data (2017) is shown in the tables below;

Balance Sheet- 2017



ASSETS
Current Assets
Cash	$200,747
Accounts Receivable	$188,937
Inventory	-$200,762
Other Current Assets	$0
Total Current Assets		$188,922

Fixed Assets
Land	$0
Facilities	$0
Equipment	$98,500
Computers & Telecommunications	$6,000
(Less Accumulated Depreciation)	$3,560
Total Fixed Assets		$100,940
Other Assets		$19,600
TOTAL ASSETS			$309,462

LIABILITIES
Current Liabilities
Short-Term Notes Payable	$9,873
Income Taxes Due	$13,064
Other Current Liabilities	$0
Total Current Liabilities		$22,936

Long-Term Liabilities
Long-Term Notes Payable	$7,735
Other Long-Term Liabilities	$0
Total Long-Term Liabilities		$7,735

NET WORTH
Paid-In Capital	$220,000
Retained Earnings	$58,791
Total Net Worth		$278,791
TOTAL LIABILITIES AND NET WORTH			$309,462


Income Statement- 2017
	TOTAL

INCOME
Gross Sales	$2,435,635
(Commissions)	$217,598
(Returns and allowances)	$73,069
Net Sales	$2,144,969
(Cost of Goods)	$1,217,818
GROSS PROFIT	$927,151

EXPENSES - General and Administrative
Salaries and wages	$265,080
Employee benefits	$162,150
Payroll taxes	$39,762
Professional services	$7,525
Marketing and advertising	$73,104
Rent	$18,000
Equipment rental	$12,000
Maintenance	$6,000
Depreciation	$16,873
Insurance	$3,600
Telephone service	$1,200
Utilities	$24,000
Office supplies	$1,200
Postage and shipping	$1,200
Travel	$6,000
Entertainment	$1,200
Interest on loans	$779
TOTAL EXPENSES	$639,673
Net income before taxes	$287,478
Provision for taxes on income	$71,870
NET PROFIT	$215,609

Summary of the relevance of Porter’s Five Forces Model

These Porter’s five forces of competition are important in enabling the understanding of the competitive nature of the business environment as well as identifying the profit potential a given strategy might yield to the company. This is premised on the fact that when a comprehension of the forces in the business environment that have the potential of affecting the profit level, the company is enabled to device its strategies accordingly (Kathy, 2008).

The first force is Competitive Rivalry which determines the nature, number and the relative strengths of the different competitors the company faces. The other force, supplier power, analyzes the nature of the company’s suppliers. It estimates the ease by which the suppliers can raise their prices, besides the attributes of the products and/or services that they offer to the company (Scott, 2017).

The third force is buyer power, which estimates the easiness by which the consumers of the company’s products can affect the pricing. It also assesses their nature and size. The fourth force is threat of substitution that determines the probability that the consumers of the company’s offerings will find different substitute ways of doing what the product or the service offered by the company enables them to do. The last force is the threat of new entry which makes a determination of the ease of entry of new market participants into the industry (Scott, 2017).

References

Kathy, S. (2008). Information Technology Project Management, (5th Ed.). Cengage Learning.

Pandley, I, M. (2010). Financial Management (10th Ed.). Jangpua: Vikas Publishing House.

Janda, S., & Muthaly, S. (2010). Development of brand equity: evaluation of four alternative models. Service Industries Journal, 30(6), pp. 911-928.

Scott, M, D. (2017). The New Rules of Marketing and PR: How to Use Social Media, Online Video, Mobile Applications, Blogs, News Releases, and Viral Marketing to Reach Buyers Directly. Wiley.