Course for business strategy use in setting up business and they challenges face

CAVENDISH UNIVERSITY UGANDA
Student Name: Abraham Ayom Ayom
Course: BBA – Generic
Student ID: 02/00315/123532
Lecturer: Bamu Charles
Module: Business Strategy
Module Code: BBA 211
Year of Study 3rd
year, 1st
Semester
Assignment Number: One (1) First Assignment
Session Long Distance Program
Date Issued:
Due Date:
Assignment Brief: 1st
Assignment coursework question
Q1. Examine different strategy that are used in setting up business of your choice and the challenges they are
likely to face?
Guide to Students
1. Maximum 10 pages word processed
2. Use Times New Roman
3. Font Size should be 12
4. 1.5 Spacing
5. For referencing purposes use the Harvard Author-
Date System
Instructions to Students
1. This form must be attached to the front of your
assignment
2. The assignment must be handed in without fail by the
due date
3. Ensure that the submission form is date stamped at
reception when you hand it in
4. Late submission will not be accepted unless with
prior agreement with the course Lecturer/Tutor
5. All assessable assignments must be word processed
1 Presented by Abraham Ayom Ayom, email: abraham.ayom@yahoo.com, or Tel: +211 927 034 102
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course for Business Strategy

Table of Contents
• Introduction -----------------------------------------------------------------------------------------2
• Business Strategy-----------------------------------------------------------------------------------3
• The strategies used in setting up business------------------------------------------------------
3
• The challenges faces in setting up business----------------------------------------------------5
• Conclusion--------------------------------------------------------------------------------------------8
• Referees-----------------------------------------------------------------------------------------------8
Introduction
A business strategy typically is a document that clearly articulates the direction a business will
pursue and the steps it will take to achieve its goals. In a standard business plan, the business
strategy results from goals established to support the stated mission of the business. A typical
business strategy is developed in three steps: analysis, integration and implementation.
In the analysis step of business strategy development, one of several methods is used to
analyse a firm’s market, resources, obstacles to success and specific advantages. The goal of
strategic analysis is to identify what a business wants to accomplish, the strengths it can bring to
bear on accomplishing the goal and weaknesses that need to be addressed prior to integration and
implementation. Strategic assessment methodologies can include evaluating the business
environment, naming various competitive scenarios, determining what market forces are at work
and rating competitors, among others.
Integrating a business strategy usually is one of many steps in a larger business planning
process. A business plan begins with an overall vision. From the vision, a mission statement for
the business is constructed, usually the shorter and more precise the better. A mission leads to
specific goals the business will achieve to accomplish its mission and that in turn leads to
strategy to achieve goals. Specific tactics are usually then developed to support the business
strategy. This process usually begins with senior managers who then communicate the strategy to
respective teams. Each team is made to understand how the strategy will affect its daily
activities. Taking the business strategy to the lowest level of the company possible helps
integrate the strategy throughout the firm. Business strategy can be applied to small businesses,
too.
Implementation of the business strategy typically follows assessment and integration.
Individual teams in the company, which understand respective roles in bringing the strategy to
pass, implement the specific tactics developed to support the strategy. At the implementation
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stage, individual business units or teams often have a subsection of the business strategy on
which they focus.
Business Strategy
According to Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows:
"Strategy is the direction and scope of an organisation over the long-term: which achieves
advantage for the organisation through its configuration of resources within a challenging
environment, to meet the needs of markets and to fulfil stakeholder expectations".
In other words, strategy is about:
Where is the business trying to get to in the long-term (direction?)
Which markets should a business compete in and what kind of activities is involved in such
markets? (Markets; scope)
How can the business perform better than the competition in those markets? (Advantage)?
What resources (skills, assets, finance, relationships, technical competence, and facilities) are
required in order to be able to compete? (Resources)?
What external, environmental factors affect the businesses' ability to compete? (Environment.)?
What are the values and expectations of those who have power in and around the business?
(Stakeholders)
The strategies used in setting up the business of your choice
Establish and write your vision statement
Address your reason for starting the business, what you hope to accomplish and what market
need your business will address. Describe your product or service. Write a business plan. Form
goals and objectives for your new company. A successful start to any business requires a detailed
outline of what you plan to accomplish.
Perform a market analysis to determine who will buy your product or service and where.
This includes the gender and age of your anticipated clients and where they are likely to buy (for
example, city, local mall, your retail outlet, over the Internet). Do your market research: Just
because you build it or sell it doesn't necessarily mean anyone will buy it. The first essential step
is to research your potential market. Who needs what you are offering? Is there space for your
product or service in the market or is the market saturated? Is the market national? Is it a niche?
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Can you define your ideal customers? These are all questions that need to be answered before
you even consider starting a business. Too many entrepreneurs have found out the hard way that
there were not enough market shares for them to capture. Others have realized that their target
market audience was far too limited to make their business work.
Identify and analyse your business proposition against your competition.
A SWOT analysis will help you determine competitive advantage and create a plan to position
your product against your competitions. Protect your company's name. Businesses file names on
a per-state basis, so other companies may be using the same or a similar name in other states.
Conducting a trademark search ensures that your unique company name isn't already in use.
Use the research and information you gathered in Steps 2 and 3 as a guide for developing
your business strategy.
Your strategy should include actionable step-by-step activities and plans. Evaluate and determine
how you will position your products and services to meet the strategic objectives you established
in Step 4. For example, assume you established a clear vision of your product or service in Step
1. Your SWOT analysis and strategy may require you to focus initially on only one aspect of
your product or service or one specific market segment or demographic.
Write your marketing plan. Include both local marketing and Internet marketing
Include marketing ad copy, separating ad copy into groups by target demographic. You should
find writing your marketing plan relatively simple after you properly complete Steps 4 and 5.
Determine and write the operational plans necessary to carrying out your business plan.
Include operational structure, office facilities, number of employees, office equipment required
and start-up inventory needs. Hire a good business attorney: You don't necessarily need to have
an attorney on a retainer, but you'll want to hire an attorney experienced with new businesses to
help you get started. Your attorney can advise you about such things as drafting contracts,
reviewing your lease and determining the right business structure. "A good attorney will know
what it is that you are trying to do and help you structure your business in a way that will be
beneficial to you
Research and determine the capital you need to fund your business. The more detailed you
are in Step 7, the more accurately you can estimate your capital requirements. Obtain start-up
capital. Whether you use your own savings or obtain loans, starting a business requires money.
The loan process can take months to complete, so start early. Lenders often request a completed
business plan prior to approval of funding.
Write your executive summary.
Bankers and potential investors or venture capitalists will read the summary to decide whether or
not to take a closer look at your business plan for funding. Use the summary to condense the
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research and information you gathered in Steps 1 through 8 into a convincing proposition.
Include your core business concept, products and services, the market need you are addressing,
critical success factors and your funding needs.
The challenges face in setting up the business
There are major business challenges entrepreneurs faces when starting a small business from
scratch. How do successful entrepreneurs and drop out billionaires handle these business
challenges? An entrepreneur faces business challenges when starting a business
Starting a business is like jumping out of an airplane without a parachute. In mid-air, the
entrepreneur begins building a parachute and hopes it opens before hitting the ground
Challenges faces when setting up a business are:
Developing the Vision and Business Idea
Developing a business idea is usually the first challenge faced by every entrepreneur when
starting a business from scratch. Finding the right business opportunity or creatively developing
an idea is certainly not an easy task. As an entrepreneur, you must possess the ability to see what
others cannot see. While others see problems, you must see opportunities.
“There is far more opportunity than there is ability”
But seeing opportunities is just the beginning. The main business challenge is going to be your
ability to forge that opportunity into a business idea. I see this as a business challenge because
the process of transforming problems into business opportunities is like trying to turn lead into
gold. I call it the entrepreneurial process of “Creating Value out of nothing”; a process that
brings innovative products into existence. Below is an illustration of how the process goes.
Identifying a problem > seeing an opportunity in the problem > Coming up with a solution >
Forging the opportunity into a business idea > Integrating your solution into a business plan
A good businessman must have nose for business the same way a journalist has nose for news.
Once your eyes, ears, nose, heart and brain are trained on business, you sniff business
opportunities everywhere. In places where people see a lot of obstacles, I see a lot of
opportunities. At times, there is something instinctive in me that tell me a business opportunity
exist even at a place where others see nothing. That is what makes me different, maybe unique.
A good businessman sees where others don’t see. What I see, you may not see. You cannot see
because that is the secret of the business… the entire world is a big market waiting for anybody
who knows the rules of the game.
Raising Capital for your Start up
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After developing your idea, the next challenge you are going to face when starting a business
from scratch is that of raising capital. As an entrepreneur, you are the only one that knows
business your idea to the core. You are the only one that knows the story of the future.
“Capital can do nothing without brains to direct it”
Trying to convince investors about something that doesn’t exist is definitely a challenge. Trying
to make them understand that you are trustworthy and equal to the task is not child’s play
especially when you are building your first business.
“If you want to know the value of money, go and try to borrow some”
There is more to raising capital than just simply asking for money. Most investors want to invest
in already established businesses with minimal risk and they want to be sure that they get returns
for the risk they took. Most brilliant business ideas never scale through the venture capital stage
because the entrepreneur is either not prepared or lacks what it takes to raise the needed capital.
The world is filled with brilliant ideas and excellent products but the world lacks seasoned
entrepreneurs.
Assembling a Business Team
“Eagles don’t flock, you have to find them one at a time”
The third business challenge you will face in the course of starting a small business from scratch
is assembling the right business management team. When I talk about a team, I am not talking
about regular employees. I am talking about a “strategic round table business team” that will
meet regularly to brainstorm on ways to grow your business.
“Individuals don’t win in business, teams do”
The process of building a business team starts even before the issue of raising initial start-up
capital arises. Remember I said that most brilliant ideas never scale through the phase of raising
venture capital. Well; this is where most budding entrepreneurs miss it. Most brilliant ideas and
products never get funded because the entrepreneur is trying to raise capital as an individual. A
business team is a vital, yet often ignored key to raising venture capital successfully.
“Business and investing are team sports.”
As an entrepreneur, you are bound to have strengths and weaknesses. That is the more reason
you need a business team to cover up or compliment your weaknesses. A team is a necessity for
building a successful business. Now finding a business team is just the second hurdle,
transferring your passion and vision to your team is the next piece of cake.
“Teams should be able to act with the same unity of purpose and focus as a well-motivated
individual.”
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Your strategic business team should comprise your banker, financial adviser, accountant,
attorney or legal adviser and any other specialist that will be of tremendous impact to your
business. A question on your mind right now might be “how am I going to pay this team” My
answer is I don’t know. You will have to figure it out yourself or better still, you can consider
bringing them on board as partners.
Finding the Right Business Location
Finding a good location is a business challenge. I don’t know but what I do know is that finding
a good business location at the right price is definitely not easy. How do you get a location that
has a rapidly growing population, good road network and other amenities at a good price? Well,
you will have to figure out yourself.
Finding Good Employees
“If you own a butcher shop, don’t hire vegetarians. To hire the right people, you have to let the
wrong people go.”
Most writers and managers crank up the process of finding good employees as an easy task.
They define the process of finding an employee as simply presenting the job description and the
right employee will surface. But I think it’s more than that.
“The competition to hire the best will increase in the years ahead. Companies that give extra
flexibility to their employees will have the edge in this area.”
Business owners know how difficult it is to find a hardworking, trustworthy employee. Most
employees want to work less and get paid more. Finding a good employee who will be
passionate about delivering his or her services is quite difficult. Finding good employees is a
minor task compared to the business challenge of forging your hired employees into a team. You
may have great employees but if they can’t act as a team, they are worthless and will yield
nothing but stagnation. A football team may have great skilful players but if they fail to play as a
team, their possessed skill is useless.
Finding Good Customers
The sixth challenge you will face in the process of starting a small business from scratch is
finding good customers. Note the keyword “good customers.” In the process of building a
business, you will come to find out that there are good customers as well as bad customers. You
must be on guard for bad customers. Good customers are really hard to find. A good customer
will be loyal to your company and will be willing to forgive you if you make a mistake and
apologize. A good customer will try to do the right thing that will benefit both himself and your
company mutually.
Bad customers will always look for loopholes in the company’s policy to exploit and make a few
gains. Bad customers will always try to exploit the company’s goodwill and look for ways to rip
off the company. Bad customers are responsible for bad debts. Good customers build your
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business and bad customers will always try to liquidate your business. Just as you fire
employees, you must also be prepared to fire bad customers without hesitation. Remember the
story of the customer that sued McDonald’s claiming the coffee was too hot.
Overcoming Competition
“In business, the competition will bite you if you keep running. If you stand still, they will
swallow you.”
Competition is the next challenge you will face when starting a business. Most individuals see
competition as a plague but I see competition as a good challenge. I see competition as a
benchmark for creativity, the main engine that stimulates innovation and production of quality
products at great prices. Without competition, there will be no innovation and without
innovation, the world will be stagnant.
Unforeseen Business Challenges and Expenses
“Smooth seas seldom make good sailors.”
Just as a sailor prepares for unexpected storm, just as a pilot is always on the watch for
unpredictable bad weather and thunderstorms, so must an entrepreneur prepared for whatever
comes. Unexpected challenges can come in the form of: Unexpected law suits, inconsistent
government policy, Not being able to make payroll, unpaid bills and taxes, unexpected
resignation of staff from sensitive office, bad debts from customers, loss of market share,
dwindling working capital, inadequate stock of inventory,
“A company’s ability to respond to an unplanned event, good or bad is a prime indicator of its
ability to compete.” – Bill Gates
These business challenges, if not handled properly can ruin your plan to build a successful
business. Another challenge you must expect is an unforeseen increase in business expenses. If
not handled properly, it might result in constant negative cash flow and eventually; business
failure.
Keeping Up With Industrial Changes and Trends
“In three years, every product my company makes will be obsolete. The only question is whether
we will make them obsolete or somebody else will.” – Bill Gates
Change in trends is a challenge you must be prepared for when starting a small business. Trends
have made and broken lot of businesses. I know a lot of profitable businesses that have been
wiped out by slight industrial changes and trends. A typical example is the Dot com trend, where
many established industrial based businesses were wiped out by new web based dot com
companies.
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“How fast a company can respond in an emergency is a measure of its corporate reflexes.” – Bill
Gates
When the Dot com era began, business owners were left with only two options. Either they join
the dot com train or they get crushed by the dot com train. Seasoned entrepreneurs know that
trend is a friend and are always willing to swiftly adjust their business to the current trend.
Keeping your eyes open to spot trends is really a challenge but the big task will be your ability to
quickly use the trend to your advantage.
Exiting the Business
“In the world of business and investing, your exit is more important than your entry. A good
thumb of rule is this; exit before you enter.”
When building a business from scratch, you are going to face the challenge of determining your
exit strategy. Just as the quote above states, you have to plan your exit strategy before you even
start the business. Most entrepreneurs run their business without any plans to exit and even if
they have an exit strategy, they find it difficult to implement it.
Conclusion
Companies in general are not willing to admit that they might be in trouble, that their company is
not a place conducive to work, or that they are having trouble retaining and keeping good staff.
You may be in just such a company and already have experienced being unacknowledged while
upper management keeps up appearances. Mistakes are being committed left and right, goals not
achieved, employees left to themselves without any idea of how they may be contributing to the
company’s success or their importance to the overall mix. Confusion reigns. Left unmanaged,
the entire company would probably end up crumbling.
Business Strategy may just be the one crucial activity that could assist the company refocus itself
and get it back on track to achieving its original goals. How Business Strategy works is to
mentor and train management to make ensure that the management constantly has their focus on
the company’s objectives, clearly defines all the steps needed to complete its plans, implements
structures / systems to formalize procedures and trains the staff to take on leadership and
ownership within the company.
Reference
http://www.ehow.com/how_5030986_set-up-business-plan.html#ixzz2AoGlrm63
https://www.incorporate.com/completing_startup_tasks.html
http://www.entrepreneur.com/article/202106
http://www.inc.com/guides/2010/07/how-to-start-a-business-in-china.html
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