Discuss about the Critical Evaluation of a Hypothetical Business Opportunity.
This essay is purposed to identify a hypothetical business that if I had the necessary resources like time, drive and finds I would pursue as a business start-up. A hypothetical business refers to an imaginary business. This essay contains information about the business in terms of organizational structure, size, strategy, risks and different functions among other features. It also tackles the business environment, both internal and external as well as their effect on the business. Business risks and functions are also covered. In the identification of a business of a business opportunity, much has to be considered to ensure that what is arrived at suits the existing market policies and structure. If I had the above-mentioned resources, I would start a watermelon production plant. This is one of the businesses that would maneuver up well owing to the fact that many people in the world love consuming them.
About the hypothetical business
This is a business that would involve the primary production of watermelons both for the local and international market. I would purpose to establish the biggest farm that would cover not less than 500 acres of land. I would ensure that I establish the business in an expandable environment which would help me expand my business anytime the need arises.My business would be specialized in the provision of solely goods and not services. The industry of this business would be goods selling. I would also join the cooperative units of the other entrepreneurs who deal with the same commodities for oneness and working together.
A research conducted on the growth of watermelons show that Turkey is one of the leading countries in the large-scale production (Edurkar, 2016). Therefore, I would suitably locate my firm in Turkey to serve the local market and the neighboring countries like Greece, Bulgaria, Georgia, Armenia, Iran, Iraq, and Syria. I would also purpose to expand it to serve the whole world in the long run. I would also establish a good management and organizational strategy to ensure that my business excels. The vision of my firm would be acquiring the top position in watermelon production and giving the best to my clients.
The organizational structure of the business
Business organizations usually have well defined organizational structures that influence their running. The way a business is organized really affects its performance. A well-organized structure provides the environment for establishment and growth. There are several business organizational structures. The matrix structure is one of them. This involves different functions within the same region specialized to perform their specific task (Garratt, 2016). Among other structures is functional, geographical, customer, product organizational structure, and many others depending on the type of the business. In my business, the best organizational structure would be the geographical structure. This is characterized by different geographical regions reporting to a central oversight person in the country or region of the establishment. Due to the fact that my business operates in more than one country, I would suitably have a central management in the production country and have the rest of the countries reporting to that center.
Internal and external business environment and their impact on my business
Internal business environment refers to those factors that affect the business from within itself. These include resources, owners, and business structure and business culture. Resources are very critical in any business. They include technological, physical, financial and human resources. Availability of these resources will keep my business growing and be running well. The absence of these resources will fail my business. Owners are the entrepreneurs (Worthington & Britton, 2006). In this case, I will be the owner. I will have to make informed decisions to be able to see my plant doing well. Poor decisions will negatively affect my business. As the owner, I would also be required to provide the necessary resources o start and run the business smoothly.
Business culture is also a crucial factor. It is an inborn character found in the entrepreneurs. An entrepreneur who is industrious and has a good business culture will have his business succeeded as opposed to those with poor cultures. The business structure also dictates the possibility of a business achieving its long-term goals (Clarke, Li, & Xu, 2016). If a business has a good management structure then it is likely to do well. As the entrepreneur, I would ensure that my business has one of the best organizational structures to enhance its performance.
On the other hand, external environment refers to those factors that affect the business from outside (Frost, 1985). They include competition, physical, culture, economic and legal political environment just but to name a few. Competition affects the quality of production and the sales volume. There are two types of competition, generic and enterprise competition. If my business will be able to compete favorably, it will succeed.If the physical environment like water, climate, roads are favorable then my business will do well. If I use advanced production technology my plantation will yield high-quality products. However, if I use poor technology, my business will fail. Again, the population growth will affect my business. If the population grows, my sales volume is likely to increase but if it decreases the sales volume goes low.
The economy is another factor. If the people have the ability to buy my products, my business succeeds but if they are not able it is likely to fail. Legal requirements will also affect my business. The set legal restrictions will dictate whether I will be able to start the business or not (Wu, 2015). If the government by any chance prohibits the production of watermelons I won’t be able to start it. Culture will also dictate whether or not to start the business. If the societal norms are against the consumption of watermelons then it will be difficult to run such a business.
Risks that will confront my business
There are a lot of risks that might confront any business. These are perils that occur either due to intentional or accidental actions. For example, theft would be one of the risks. If by any chance there is theft in my farm, then a lot of losses would be incurred. Another risk would be the invasion by wild animals. In some countries, wild animals like elephants invade farms and destroy products worth millions of money. Compliance risk would also compromise my business. It might be difficult to cope up with the legal requirements or adjust when they change abruptly. The strategic risk would too confront my business. Sometimes the well-laid business structure proves non-functional at some point thus negatively affecting the businesses (Tuominen, 2016). Lastly, there would be a failure in the day to day activities. This is known as operational risk. This might affect the business negatively.
Business practices I would adopt to ensure organizational performance
In the business context, there are a number of practices that enhance the organizational performance. For instance, proper setting of objectives enhances the organizational performance of any business. Goals should be laid well and all the employees should strive in reaching them. Good customer relation is another practice that enhances performance (Weick & Quinn, 1999). If the customers and clients feel respected and appreciated, then the business does well and is easy to manage. Team work is another major practice that promotes performance. If all employees work harmoniously then the performance would be improved.
All people involvement is another important practice. If all people are invited to make decisions concerning them and the welfare of the business they feel part and parcel of the firm (Mohamad, 2012). This gives them a sense that they belong to the business and this improves the business performance. Again, getting the best team is important as far as organizational performance is concerned. This involves serious vetting and interviewing to arrive at the best people to work with. Therefore, I would ensure that I get the best team to work with so that the organizational performance is improved.
The most important functions and how they relate to the business performance
Watermelon production, like any other business, usually has to be under a strict management to ensure that the business objectives are achieved. This management involves action by all the business functions that work together to make the business a success. These functions include production, marketing, purchasing, human resource management, research, and development as well as the financial and accounting function. The marketing function sells the products and brands the business (Shani, Pasmore, & Woodman, 2013). The purchasing department, on the other hand, deals with matters concerning purchases. The research and development sector conducts market research. The human resource rocket manages labor whereas the financial and accounting function keeps financial records and provides the relevant financial statements. The ability and willingness of every function to conduct its duty as desired and work harmoniously with the rest determine the performance. If all the functions cooperate and work well then the business performance improves.
To conclude, There is no a business opportunity that is to be referred to as being small. Every business opportunity under good management and entrepreneurship has the capability of being the next biggest business. However, there is internal and external business environment that affect it negatively or positively. Therefore, an entrepreneur should focus on getting the best out of his opportunity. There are also business threats that may confront any business and one should work wisely to overcome them. Again, all the functions of any business should work harmoniously for the well-being of the business.
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