Read Case first then answer questions 1-5. Explain your answer Jim Boothe has in

Question

Read Case first then answer questions 1-5. Explain your answer

Jim Boothe has invented dozens of different products in his 25 years as an engineer to a large research and development lab. For some time, he has been thinking of leaving his current company and starting his own but has never seemed to have the nerve to do so. Jim feels that with his children grown up and their own, now would be a good time to start his own business Having been an avid bicyclist for many years, Jim had invented an automatic derailleur for a 15-speed This can be easily attached to any bi bike. derailleur cycle. The user does no shifting as the bicycle shifts the gears of the bicycle automatically (depending on ter- rain) much like the automatic transmission on an auto mobile. Jim feels that this invention has significant mar- ket potential, particularly since he has observed a rapid growth in the bicycling industry. This growth has been elated to Lance Armstrong's success in the Tour de France, increased interest in physical fitness, and tech nological improvements in bicycles allowing for off road travel as well as more comfort for longer-distance riding. In his cycling club alone, the membership has doubled in the past two years and to his knowledge is consistent with a national trend. Jim feels that all he needs to do is to write a business plan and submit it to his bank to obtain the estimated $100,000 needed to get started. He is willing to support this by taking out a second mortgage as collateral. Jim feels that he can subcontract the manufacturing of the derailleur and the bicycle separately; then upon receiv- ing the items, he can complete the final installation and fabrication functions before shipping to customers. Jim's wife Nora is a little skeptical about him leaving a good job for the purpose of fulfilling one of his many fantasies or lifelong dreams. She is the more practical of the two and is concerned about their financial future and the commitment that will be required of Jim in the first few months of the start-up. Taking a second mortgage on the house makes her uncomfortable. She is also not sure Jim is the entrepreneurial type. In spite of all the concerns, Jim has prepared business plan that he expects to submit to his banker in the next few days. The business plan consists of six parts: a one-page summary of the plan, a detailed de- scription of his invention, forecasts of growth for the bicycle market, a one-year profit and loss statement, plan for the manufacturing and final fabrication of the derailleur and bicycle, and an appendix which con tains surveys with some of his friends who own ten- speed bikes

. 1. Does Jim have a complete business plan ready to be submitted to a bank?

2. What types of risk would someone like Jim assume if he decided to develop this invention into a business venture?

3. Research is very important to the entrepreneur. Jim's surveying his friends that have 15 speed bikes should be enough data, correct?

4. If surveying friends is not enough: Who would be the target market? Where can you get data about this market? How will he get the derailleur on a bicycle?

5. What group of consumers would be an ideal candidate for this product?

Explanation / Answer

q1) No there are some missing parts from business plan:

1. Financials for no less than three years with month to month projections in the primary year. The financials need to incorporate something beyond a benefit and misfortune articulation. Income explanations, income projections, and financing necessities for the wander can be useful in getting ready spending plans and controlling expenses.

2. A market investigation of the bikes particularly those with a derailleur. Jim can incorporate an assessment of the market size, highlights, and the rivals in the business. He can survey where his entrepreneurial wander may fit, benefits different players are getting a charge out of and his anticipated piece of the pie.

3. Market procedure: Jim can disclose how he intends to advertise the bicycles. His strategy for success ought to build up his expected advertising approach. It can incorporate advancements, publicizing procedures, and strategies he plans to use in enhancing advertising in an offer to keep up cheerful clients.

4. It is essential that Jim play out a doormen five powers investigation available and discover its lucrativeness. He can layout a thorough examination of his organizations potential qualities, shortcomings, openings and dangers. This can be useful in knowing his comprehension of the endeavours potential dangers and openings, which he can suitably address. This examination can enable him to distinguish what he has unique in relation to different suppliers, his upper hand over different players, and where more power lies in the business.

Q2. Budgetary hazard –

This is the most evident and can influence not just the $100,000 that he expects to acquire yet in addition the cash that he would have earned with his present position as an architect. They may emerge from monetary structure, the exchanges made, and the budgetary frameworks Jim may utilize.

2. Consistence chance this includes the laws and directions representing the business Jim expects to wander and his business tasks. He should take after every single set law in tax assessment, wellbeing and security, and reasonable exchanging among others.

3. Vital hazard These are the dangers that may emerge from vital choices made that influence Jim's organizations capacity accomplish the objectives he has recorded in his marketable strategy. They might be caused by impacts in changes in client requests because of the exercises of contenders, for example, aggressive estimating, or mechanical headways. They could represent a noteworthy risk to Jim's business as far as how clients will see his bikes e.g. they may consider them to be being overrated or dull and obsolete which might be inconvenient to Jims wander.

4. Operational hazard These dangers emerge from part of Jim's organizations operational systems. They may incorporate off base record keeping, old or damaged IT frameworks, or interruptions to his store network. These dangers if not legitimately controlled may influence Jims clients to consider him to be inconsistent, or he could lose every one of his information.

Q3) Jim's study of his companions that possess 15 speed bicycles isn't adequately dependable. The quantity of individuals in his investigation appears to be low contrasting and the huge populace of the American natives. The proportion appears to be deficient and may give him false or deluding data. Jim needs a higher number of individuals to examine on to make a reasonable and more dependable end on anticipated request of his bicycles.

Q4( Jims target market can comprise of expert cyclists to individuals who cycle for the sake of entertainment. He can get information about this market from makers and sellers of bikes in the nation. They can offer canny measurements and data about the market. From here, he can know expected market development rate, changes, and inclinations in the market buyers, and guidelines he should maintain. Is he going to fabricate the entire bike with the derailleur, would he say he will buy the bicycles and join his derailleur himself, or will the derailleur be produced independently and sold to be connected on the bicycles by the clients? Does he know as of now how this will function? Jim feels he can subcontract both the assembling of the bike and the derailleur independently. Being a designer, he wants to then append the derailleur himself before transportation the bike to the clients. Jim to some level knows how this establishment will fill in as he appears to be prepared to settle the derailleur on to the bikes.

Q5 ) Bicycle clubs, for example, his can give a perfect market to his item. Youngsters who have or are building up a diversion of cycling would be keen on the new development because of its creativity and comfort.

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