New Venture Development and Management Essays

1166 Words Mar 16th, 2011 5 Pages
New Venture Development and Management

Ajay Bam Case Study

I. Introduction

Vayusa Company is a high-potential business which provides payment method through mobile phone. Inventor is Ajay Bam who earned an MBA degree in Entrepreneurship. I will use SWOT, PEST, Porter’s Five Forces analysis and Timmons’s quick screen in order to analyse Ajay’s business plan.

II. Body

Question 1: What is the opportunity presented in the case and what conditions (environment, industry, market) have created it?

Firstly, Ajay has opportunity to sign up for a four month international management internship in Munich. This help him to realise mobile phones are very popular in Western Europe. For example, people brought along with them
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Discuss the areas of high and low potential and gaps in the information base in concluding your evaluation.

According to Timmons’ quick screen, the opportunity for Vayusa is quite high because of following reasons. First of all, there are a large number of potential and reachable customers in U.S. This market growth is also high about more than 20% annually. Besides, although fixed cost and variable cost are high, the return amount is also worth investing. According to Ajay’s financial plan, Vayusa will achieve break-even in 4th year and the profit after tax in 5th year will about $49.4 million. However, the cash flow will only positive in the 3rd year, it is very difficult for company to do transactions. Generally, every factor which is mentioned in Timmons quick screen shows that Ajay’s plan is very good except they didn’t have enough funds and manage cash effectively. Therefore, if they can survive after the first 3 years, Vayusa could achieve billion profits in the near future.

Question 4: Based upon your analysis, recommend to the entrepreneurs whether they should proceed with the venture or not. If they should proceed, how should they go about implementing the opportunity? If they should not proceed, what should they do instead? Justify your recommendations by referring to your analysis.

In my opinion, the entrepreneurs should do some more work

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