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Discuss About The Business Model For Transforming a Coal Mining Asset Into a Rent Generating Resource.

Market Gap

In the modern business environment, it is important to appreciate the fact that there are many unseized business opportunities that could be turned into million earning premises. That calls for brainstorming and opening business eyes to see and perceive what is happening around the world and what is capable of being turned into a business idea. With the contemporary changing world, business ideas sprout daily, giving fresh chances to contemporary investors to bring together factors of production and seize the opportunities. The change in people’s way of life, introduction of new gadgets, changing tastes and preferences of consumers as well as change in price of some consumer goods gives a clue to an entrepreneur on a potential business opportunity. Seizing the opportunity is usually accompanied by a thorough research to ensure that if the opportunity is turned to a business it will record a positive impact to its owner and the society it is established in. As a result, it is very critical to ensure that the opportunity to be turned into a business fills an entrepreneurial gap that has been left out open. In consideration of such factors, mechanization of charcoal production using organic was arrived at as a viable business opportunity.

Most of the households, if not all, use fuel daily, whether paraffin, wooden charcoal, cooking gas etc. This fact provides a feasible business idea for an entrepreneur who is capable of investing in the industry. A research carried out by (Clawi, 2018) on the nature of fuel consumption by households shows that most of the fuels used are non-renewable and thus capable of getting finished and or having hazardous effect to the environment. Another research as carried out by (Martins, 2018) on the consumption level and the amount of income spend on fuels for households shows that consumers are forced by circumstances to unwillingly allocate a big budget to fuels for the purpose of cooking and heating in homes. It is therefore due to this reason, that we saw it necessary to come up with a cheap alternative source of fuel to replace the existing costly and hazardous fuel. However, this idea has been bought by a few individuals as discussed in (Kater, 2018), they have not gotten into it with the mighty it deserves. The business aims at mechanizing the production of charcoal briquettes from organic waste such as saw dust, certain leaves, and banana peelings among other organic waste materials.

Benefits generated by the idea

Large scale production is usually associated with high return on investment if handle wisely. This business will see the owner earn a considerable amount of income that will see their status improve and start getting ranked among the world’s richest individuals. A research done by (Katimba, 2018)  and (Rasam, 2018) says that individuals who invent commodities that are cheap and necessary for a large percentage of population have a more likelihood of getting richer than the inventors of huge commodities that cost fortune to have and thus consumed by less people. The owner of the business will get a chance of attaining self-actualization as a result of huge revenue coming from the business (Tumali, 2018).

The employees in the business will also earn income inform of wages and salaries and start living good lives. The employment opportunities created by the business will see a large number of people get employed thus the reducing dependency ratio thereby reducing the poverty level. The society will be ae to get an alternative source of fuel that is affordable and thus slash the budget allocated to fuel. These saved funds could be invested elsewhere or used to finance other projects (Maau, 2018) and (Nanlohy, 2018). The charcoal, so produced, does not pollute the environment like paraffin and the wooden charcoal that produces carbon monoxide gas that is fatal when inhaled. The business will also clean the environment by recycling waste that could have otherwise been a pollutant.

High production technology will be used to ensure that the final briquettes are quality enough to guarantee customer satisfaction as was suggested in (Wekan, 2018). This alternative source of fuel will enable the consumers save a substantial amount of money that would have been spend in buying other expensive fuels. Since the commodity is environment and pocket friendly, it is certain that it will do well in the market.

This business opportunity targets the common man whose primary fuel is either paraffin, wooden charcoal of cooking gas. The target market will be given the due attention and the public relations department will create close relationship with the customers to ensure that they enjoy the service since good public relation equals high sales volumes (Kiseli, 2018). The briquettes will be of a high quality to ensure that they have value for money and that consumers don’t feel fraud upon purchasing them. As a result, it is believed that the target market will respond appropriately to the launching if the business.

Feasibility evaluation

Since the business will be an organization like any other, it will be divided into departments that carry out their specialized functions. The organizational structure will be built in such a way that there is proper communication from the top level to the bottom level employees. That is because proper communication is the key secret behind the success of any organization (Fujisawa, 2018). The idea of chain of command and span of control will be put into account to ensure that the business is effectively and efficiently running. Every department will be accorded the necessary support to ensure that it delivers.

This business does not need to start using huge capital as it is expected to grow overtime to become the world’s leading domestic and industrial fuel producer. It will require 200k USD dollars to begin and this money will be gotten from the entrepreneur's saving and the renting and leasing of personal property as advised by (Douglas, 2018). Upon implementation, the business will make the first sale in the first day and operate for three weeks to reach the breakeven point. The business will reinvest realized profits to grow and maintain its operations.

This business targets mostly the households that use other sources of fuel as opposed to those using electricity for heating and cooking. However, the business idea not exclude them because they have an opportunity of opting for these briquettes and leaving the electricity whose bills are very high as compared to the price of the briquettes. The most profitable customer segment is households that are above the poverty line as they have funds to finance their basic requirements. This is the customer segment that needs an alternative source of fuel so as to cut on the expenses of fuel to channel the excess funds into other projects (Bookeh, 2018). Therefore, this customer segment will be targeted in the provision of value propositions. That calls for the use of long tail business model that targets this most profitable segments in the provision of value propositions. The value propositions are after sale services and discounts for routine buyers (Camila, 2018). The key activities involved in the business are collection of raw materials, production and marketing of the commodity. The appendix summarizes the business model canvas in detail.

In executing the business idea, care will be taken to ensure that the established business produces high quality products that meet the customer needs and thus can satisfactorily substitute other sources of fuel. The business will also develop strategies of using internal resources wisely to be able to produce large volumes of the product at a cheaper price. Provision of a cheaper and good quality source of fuel will improve consumption. The business will also motivate its employees for the purpose of improving performance and hence productivity. Division of labor and specialization will be taken as a priority as suggested by (Bookeh, 2018). Every employee will be entitled into doing what they are best at. That ensures that there is high production rate and hat the final product is of a desirable quality.

Target market feasibility

Conclusion

There has been a debate on whether a business can operate without stiff competition and whether a business can be beneficial to not only the founder but also the public. The fact remains that it all depends on the chosen idea. For instance, coming up with an original idea and patenting it gives the founder monopoly benefits thereby preventing unnecessary competition. Again, a business idea that provides a more quality or a cheaper alternative product is beneficial to the clients and eventually the general public. That assures that a business can avoid competition and be beneficial to the public by coming up with a unique idea. For instance, our chosen idea is not widely used in many parts of the globe and thus little or not competition is expected. The business earns the owner income and helps the public save on consumption as well as prevent environmental pollution. Coming up with this idea was accompanied by identifying a market gap to be filled and ensuring that there are benefits attached to it. It is therefore sure that the business will do exemplary well in the market.

References

Bookeh, N. (2018). A literature and practice review to develop sustainable business model archetypes. Journal of cleaner production, 56(7), 69-78.

Camila, R. (2018). Benchmarking the firm's critical success factors in new product development. Journal of product innovation management, 4(7), 55-67.

Clawi, R. (2018). Crafting business architecture: The antecedents of business model design. Strategic Entrepreneurship Journal, 4(7), 78-94.

Douglas, E. (2018). Interaction between feasibility and desirability in the formation of entrepreneurial intentions. Journal of Business Venturing, 6(8), 50-79.

Fujisawa, K. (2018). The critical success factors for ERP implementation: an organizational fit perspective. Information & management, 4(8), 46-69.

Kater, T. (2018). How 3D printing is changing business model innovation. Technological Forecasting and Social Change, 35(7), 65-89.

Katimba, P. (2018). From business model to business modelling: Modularity and manipulation. In Business models and modelling, 56(8), 68-89.

Kiseli, F. (2018). Investigating the feasibility of supply chain-centric business models in 3D chocolate printing. Technological Forecasting and Social Change, 3(6), 34-57.

Maau, Y. (2018). BPMN-based business process model feasibility analysis: a petri net approach. International Journal of Production Research, 67(7), 34-46.

Martins, K. (2018). Unlocking the hidden value of concepts: a cognitive approach to business model innovation. Strategic Entrepreneurship Journal, 7(89), 44-67.

Nanlohy, H. (2018). Management and Feasibility Analysis of Smoked Fish Business in Ambon. In IOP Conference Series: Earth and Environmental Science, 3(6), 46-72.

Rasam, S. (2018). Business model for transforming a coal mining asset into a rent generating resource. A study under multiple strategic frameworks. Resources Policy, 5(7), 67-78.

Tumali, R. (2018). Energetic and economic feasibility associated with the production, processing, and conversion of beef tallow to a substitute diesel fuel. Biomass and Bioenergy, 3(88), 66-83.

Wekan, F. (2018). Investigating the feasibility of supply chain-centric business models in 3D chocolate printing: A simulation study. Technological Forecasting and Social Change, 76(4), 35-55.

Yew Wong, K. (2015). Critical success factors for implementing knowledge management in small and medium enterprises. Industrial management & Data systems, 24(77), 78-93

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