Entrepreneurship
Individual Assignment: Case Analysis
Lecturer: Prof. Dr. Mohd. Hassan Mohd. Osman
Prepared by: Mohammad Pazyar Matric: MR111216
Spring 2014
VendQuest (A): The Business Idea
Introduction Obviously as it appears, there’s a unique e-‐commerce solution is made up by Conti. To make a pragmatic decision whether or not he should commence on his business, a visionary analysis seems inevitable. It seemingly seems very crucial to have a SWAT analysis table first to best categorize the strengths, Weaknesses, opportunities and threats. Accordingly, it’s needed to go over each of them and conclude on the case if it’s feasible for him or not to start up his venture. SAWT Analysis Table: (based on the facts in the case)
Strengths • Strong background in both construction and equipment management industry (P1, P1) • Strong background interest in software applications (P1, P1) • Having Expert knowledge as a CEO about the construction and heavy equipment industries Weaknesses
Opportunities
• Having been able to have buyers and sellers together online by means of an application (P2,P1) • A quite large market with having a significant concentration on both the East and West Coast. (P2, P3) • Huge market size on Heavy Equipment Parts (Table A) • Huge market size on construction equipment. (Table B) • Forrester research estimated that the e-‐ commerce marketplace would reach 3.2 trillion by 2003, with 85% of this being business-‐to-‐business commerce. (P3,P1) • Aberdeen forecast of early adopters of internet procurement (P3,P2) • Early players in this emerging industry were receiving a high market valuation; CommerceOne (P3,P3) • Offering decreasing the order and distribution cost to one-‐third. (P2,P2) • Offering benefit to buyers (Exhibit 1) • Offering benefit to sellers (Exhibit 2) • Competing in the midsized industrial business segment because it was a relatively underdeveloped e-‐commerce category (P4, P1)
Threats • Finding a right product positioning that satisfies both buyers and sellers. Suppliers might be worry about the implication of a service that gave too much bargaining power to the customers. • Close competitors: Ariba.com, CommerceOne.com (Exhibit 3) • Potential Customers: Selling software applications limited to searching out product from large databases. (Exhibit 3) • Market-‐Entry Threats: Very large technology and e-‐commerce players with the capital to duplicate an industrial intermediary service model. (Exhibit 3) • Supplier E-‐commerce Sites: There are industrial suppliers that have their own e-‐ commerce capability for them. (Exhibit 3) • B-‐to-‐B E-‐commerce Software Companies: Offer business-‐to-‐business e-‐commerce solutions (Exhibit 3)
Strengths and Opportunities analysis As it derived form the SWAT Analysis Table, Kurt Condi is able to be very confidant on the start up his venture thorough his very strong background in both Heavy Equipment and construction industry. He has great knowledge of the market as of being a CEO for a company in a related industry. For a pioneer is very significant to have a strong knowledge on the essence of the industry. In addition as it’’ stated in the case, he has a strong background of interest in software application. This positive attribute will definitely assist him to keep the pace with the idea strongly since he finds out his own passion involved. Furthermore, as the case exhibits there are ample of opportunities that he could utilize to aim his objectives. Mainly, the feasibility of the job; Presently the world is on the initial stage of e-‐commerce. People have already come to believe theta there ‘s an alternative path to run their business other than it traditional way. So consequently it’s doable to have buyers and sellers to trade on-‐line. Also, it’s worth to mention the huge market size which offers a massiveness as much as 124,260$ M for the heavy equipment parts as well as a tremendous market size of 154,140$ M for construction parts industry. It is worth to north that market segment is scattered from the West to the East coast which can be a grand area for presenting a popular brand image. Based on the surveys been delivered by Forrester, there will be a huge expansion of market size for e-‐commerce industry by 2003. It brings about a rational understanding when the survey says that B-‐2-‐B commerce will comprises 85% of the market capability. Accordingly, Aberdeen forecasts indicate the benefits for the early adopter of e-‐commerce industry. Looking back at the background of CommerceOne and how took over his share at 80$ and how the share sharply went up to 1000$ the same year in 1999, should urge Conti not to waste the time He’s advised, as pioneer, to commence on his endeavor prior to his competitors capture the scene of midsize industrial business as it still underdeveloped in e-‐ commerce area. Based upon on the case, there are some certain benefits for the suppliers and buyers by adopting e-‐commerce (Exhibit 1, 2) . Supplier could decrease their ordering and distribution cost to one-‐third. Also they could have more customers. Also by adopting Conti’s solution they are able
to enjoy a larger order size in a lower cost. Plus, it makes them to be more informative and helps to keep the trend and market analysis. Consequently it will prompt them to have a more sophisticated system. Furthermore, buyers are so privileged in this system. e-‐commerce enables them to each for their option and savor having more options at a lower price and yet saving more money .the system will help them to avoid time-‐killing paperwork and offers them a tailored content. More significantly it permits them to pick their choice on payment method and keep up the pace with their historical purchasing analysis. To conclude, it will guide them to have a more sophisticated system likewise.
Competitors Analysis On the merge of his venture, he needs to keep an eye on his competitor wisely. Based on five forces theory presented by Porter, He needs to position the products in a way, which satisfies both parties of suppliers and sellers. He’s strongly advised to keep a fair balance in order to prevent some future cumbersome circumstances in which one or both sides are unsatisfied. Like giving too much bargaining power to the buyers might brings about reluctance of the suppliers to take part in e-‐commerce business. One single indecent issue could conclude to a long-‐lasting bad reputation for a pioneer in relevant industry.
Potential competitors can be threating Conti ‘s venture by offering search engines to the buyers, which enables them to browse and search for their part and supplier. However they are not powerful enough to have the both parties involved at the time. In addition. There definitely be some mega-‐sized companies willing to duplicate his software and sale it . Bus since they are rooted in the industry the do not seem to be major threats. Likewise there are some b-‐2-‐b commerce software companies that might be as of threats. How ever since they do not present mostly a strong capability on the targeted business they could lack of confidence against one that’s been there for many years.
Some Supplier might have own-‐managed e-‐commerce websites. However, du to the lack of option in them customers might not be willing to go and select the item from them. However, there are always some close competitors that have the ability to imitate the software and sell to a side which desiring an e-‐commerce business. . Conti is strongly advised to take efficient action to illegalize misuse of his solution through Copy Right terms and conditions to prevent such competitors.
Conclusion Conti is strongly urged to commence on his intermediary e-‐commerce business as he has a good touch of the background business, which is the heavy, and construction equipment. He’s taking account numerous advantages and opportunities, which make him confident to have a strong, start up. However, he should always monitor his competitors. 