Concept of Innovation and Entrepreneurship

Question: Discuss about the Concept of Innovation and Entrepreneurship. Answer: Introduction This assignment has aimed to focus to the concept of innovation and the entrepreneurship. In this context, this study would make a business plan, which includes the innovation for this new business of health care centre. As per the case study, it can be mentioned that the members of this newly opened health care centre are looking for funding in order to explore their business in the market. In addition, this study is helpful to discuss the reason of choosing this business. On the other hand, this study tried to highlight the basic information regarding the location and the competitors, which are assumed to be important for a start up business. Investors also identify the competitive advantage of the start up business. Moreover, in this study a predicted financial budget plan has made, which would be benefitted to the investors and to the shareholders. From this budget plan, the shareholders could identify whether the health care organisation would be able to return their investment after one year. In this connection, this study also provides a SWOT analysis, which would be helpful to predict the strength, weakness, opportunity and the weakness of the organisation. Reason behind choosing the business CareUlta has planned to start a new health care centre in Queensland, Australia. Initially, it can be mentioned that they have a medical store in that region. In order to explore their business, they have planned to develop a new health care centre. As per the statement of Amit and Zott (2012), it can be stated that they are willing to provide health care service in turn of affordable prices to the patients. In addition, they have a competitive advantage in case of selling of medicines. Therefore, they aimed to start a new venture in the same field. Moreover, Beine and Parsons (2015) mentioned that CareUlta has a good reputation for their service in the market. On the other hand, it can be mentioned that the limitations of the health care industry are minimum due to the rising of demand from the patients for greater service provides. This will effectively enhance the profitability statement of the business and the organisation can generate higher revenue. Therefore, it can be stated that CareUlta is a good option to earn revenues as the start up venture. Basic information regarding the position and competition of the business According to Berman et al. (2012), it can be stated that a start up business is depending upon some important factors. In this connection, it can be mentioned that it is depending upon the location, competitors and regional support. Boons and Ludeke-Freund (2013) mentioned that Queensland is the second largest as well as third most population state of Australia. Queensland has a greater communication with the rest of the state of the country. Therefore, it can be added that an advertisement regarding this newly opened health care centre can promote about the service of CareUlta (Chesbrough 2013). In addition, it can be mentioned that the clients will be able to know about this health care centre. In this purpose, the organisation has planned to put hoardings in the congested roads, so that the customer attention will increase. It can be mentioned that CareUlta is quite popular for their previous business. They have been providing a greater service. Therefore, CareUlta will get the regional support, which very important for exploring a business and also important for a start up business. As opined by Dodgson, Gann and Phillips (2013), regional support is helpful for a start up business, which will encourage the organisation. The encouragement will be in terms of loan availability, rules and regulations, other local support groups among the others. These tools are necessary for the organisation by providing a greater business atmosphere. On the other hand, Halme, Lindeman and Linna (2012) mentioned that the presence of competitors in the market, may be critical for a start up business. In this context, it can be stated that MaxiHealth was performing the role of monopolist. It provided their health care services since five years. On the contrary, it can be mentioned that their customer service is not good; therefore, the service takers do not like to take the service from this service. Key objectives In this purpose, it can be mentioned that the investors will invest on a new project when they will be ensured that their investment will be returned from the business after one year. Moreover, the investors also aim to identify the future profitability statement. In this connection, it can be stated that CareUlta requires to highlight their competitive advantage and their business objectives, so that the investors will willing to fund in their business. According to Dodgson, Gann and Phillips (2013), it can be mentioned that there are a number of health care centres and MaxiHealth play the role of monopolist among them. Therefore, to make a good position in the market, CareUlta requires to take different strategies, which make the business successful and the investors also want to invest in this project. The business innovation of CareUlta, which they have planned to follow, can be highlighted briefly in the following: This organisation has already a good reputation in the market in case of selling medicines. This trust and loyalty of the consumers will be essential for starting a new business. The consumers will willing to take the service of CareUlta. There will no political partys intervention in case of the service of CareUlta. Careulta will try to provide practical and moral support and will also help to motivate the patients by taking of more responsibility. This will improve the continuous service of the organisation. These strategies will be helpful to enhance the consumers attention; therefore, they will want to take the treatment from this organisation compared to the other organisations. As a result, it can be predicted that the start business will be successful. The organisation will earn more profits. Based on this prediction and the business innovations, the organisation will invest in this project and will expect their return after a certain time. Impact of financial decision on business In the words of Johnston and Bate (2013), it can be stated that financial decision will help to maintain the flow of liquidity, which will be needed for exploring a business. Moreover, it can be mentioned that strong financial statement is also required for a business in order to operate the business performance optimally. In addition, Link, Ruhm and Siegel (2014) added that financial decision will be benefitted to evaluate the growth prospect of the organisation. Nevertheless, it can be argued that the forecasted financial budget will not consider the change of the inflation rate. SWOT analysis Strength CareUlta has good reputation in the medicine business. The organisation will hire experienced and skilful staffs, who have clinical knowledge. The organisation will use new and updated technology and machines. Weakness As it is a start up business, sometimes patients will feel reluctant to take the service from this health care centre. They do not have idea about the service. Opportunity Identifying all of the limitations of the other health care organisations, McGuirk and Jordan (2012) pointed that CareUlta will follow some innovative strategies. Therefore, it can be mentioned the organisation will have the opportunity to make the business successful. Threats Based on the weakness, it can be mentioned that the organisation may not earn higher level of revenue. As a result, the profitability earning of the organisation may be decreased. In addition, due to the presence of the competitors in the market, the revenue earning by CareUlta may be declined. Table 1: SWOT analysis (Source: Created by author) This SWOT analysis will be helpful to the investors. They will be able to identify the strength, opportunity, weakness of the organisation (Onetti et al. 2012). Identifying these factors, the investors will be capable to take decision whether they will invest in the start up business or not. In this connection, it can be mentioned that as the organisation will follow some innovative business strategy, therefore, it can be predicted that the investors will show their interest to invest in this new venture. Start up cost for the proposed business According to Qian and Haynes (2014), start up cost is required for the business of CareUlta in order to run the business operation smoothly. The elements are space for build the organisation, purchasing of new machineries, and payment to the staffs. Space for the organisation: In order to build the organisation, the CareUlta will initially require efficient space and then the organisation require huge money for developing the building. Moreover, it can be mentioned that initially the health care centre can take rent; however, the cost of rent is approximately 12,000 per year. This will be costlier to the organisation. Nevertheless, Rafols et al. (2012) criticised that the overall business turnover from the business will be decreased. Therefore, it can be inferred that instead of taking of rent, CareUlta needs to build new clinic or building to minimise the overall cost structure. Purchase of new machineries: In the point of Qian and Haynes (2014), it can be mentioned that CareUlta requires to purchase new machineries for the treatment and other scientific tests. Medical equipments are needed to monitor the treatment of the medical conditions. On the other hand, Trad and Kalpi (2013) mentioned that initial investment will be benefitted to maintain the work flow in case of start up business. However, it can be argued that increasing investment will minimise the liquidity of the start up business and therefore, it can be predicted that the service by the organisation will be damaged. Forecasted financial budget Year 2017 2018 2019 Total asset 25000 2000+ 30000 =32000 7500+ 40000 = 47500 Cost of machineries 5000 5200 5200 Cost of medicines 7500 7800 8500 Payment to the employees 8000 9000 12000 Other expenses 2500 2500 2700 Total profit = 25000-( 5000+7500+8000+2500) = 2000 = 32000-( 5200+7800+9000+2500) = 7500 = 47500- (5200+8500+9500+2700) = 19100 Table 2: Forecasted financial budget plan (Source: Created by author) From the above table, it can be predicted that the profitability statement of the business will be increased. In this context, it can be mentioned that, initially at the starting of business, total asset of CareUlta is 20000. At the end of the year, the revenue earning by the organisation will be 2000. This prediction has been made based on the present cost of the equipment. Therefore, the management of the organisation has planned about the cost structure and their expenses in the business (Schaltegger, Ludeke-Freund and Hansen 2012). On the other hand, it can be also predicted that after the first year of business, the investors will invest more in the business as they will get their share from the organisation. Moreover, it can be observed that the cost of the equipments will be increased with the rise in time. In this purpose, Trad and Kalpi (2013) added that the cost of medicines will also increase, as most of the patients will want to take the service from the organisation. Acc ording to Chesbrough (2013), it can be mentioned that by exploring the service of the organisation, the organisation will want to open their new branch to the several state of Australia. Conclusion This study has highlighted the concept of business and entrepreneurship. In this context, this study has mentioned some innovative business strategies for a health care start up business. The importance of the location of the business and how the presence of the competitors influences an organisation has been discussed. On the other hand, this study is also benefitted to highlight the forecasted budget plan. From this budget plan, it can be predicted that the organisation will earn more revenues with the rise in time. Recommendation In order to get greater source of funding, CareUlta requires to adapt the above mentioned strategies. In addition, it can be recommended that the organisation also requires to consult with a business expert, who is eligible to give ideal suggestions to make the business successful and the investors also invest in this new venture. References Amit, R. and Zott, C., 2012. Creating value through business model innovation.MIT Sloan Management Review,53(3), p.41. Beine, M. and Parsons, C., 2015. Climatic factors as determinants of international migration.The Scandinavian Journal of Economics,117(2), pp.723-767. Berman, S.J., Kesterson-Townes, L., Marshall, A. and Srivathsa, R., 2012. 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