Entrepreneurship Incubation Environments

Question: Discuss abut the Entrepreneurship Incubation Environments. Answer: Introduction The aim of the present assignment is to identify as well as to evaluate the possible market opportunities for a start up business in the premise of Australia. More precisely, the paper is going to recognize a relevant target market for an entrepreneurial business venture through having an elaborate market analysis and designing appropriate strategies and tactics to approach the target market. The attempt would thereafter be accompanied by an in-depth evaluation of the probable risks associated with the start up business venture in the market premise of the considered territory. For the distinct purpose mentioned above, the assignment has chosen the venture of importing handicrafts from Nepal to Australia. Therefore, the focus would be to outline possible strategies and identifying the premises for developing the considered entrepreneurial attempt. In this context, it is required to mention that in Australia, there is a bright scope for developing the import business of handicrafts. It is because of the fact that the territory is emerging as a potential business market for handicrafts. Specifically, the market zone is opening its door for the south East Asia and countries like India, Nepal, Thailand, Korea, Hong Kong and Indonesia for handicraft businesses (Thurbon 2015). It is fortunate to contemplate here that the Australian business environment of handmade crafts is hugely influenced by the ideals of the products, which are handmade. Henceforth, it can be anticipated that the scope for establishing the venture of importing handicrafts from Nepal and selling them on a profitable range in the market of Australia is high. However, the current assignment is going to focus on assessing the associated risks, which are supposedly risks regarding import permits and issues regarding custom requirements. However, it is significant to mention in this respect that, as the Australian market for handmade crafts are growing and giving opportunities to several entrepreneurs; it would not be easy to soar high immediately for the concerned business owners. Therefore, a coherent understanding about the competitors would be necessary to accomplish for the present purpose, which would be done through an elaborated market analysis. Market analysis In order to understand the ways through which the entrepreneurs would be successful in accomplishing the customer requirements, better than the existing rival organization, the assignment would now engage in making a sound competitor analysis. However, prior to identify the potential and existing business competitors and their individual qualities, it is essential to note that the economic condition of Australia is enviable as per the fact that abundant of natural resources is potential enough in attracting foreign direct investment (Kremer and Symmons 2015). Most importantly, the economy of Australia has been consistent in growing impressively for the past 17 consecutive years prior to the financial crisis. On the other hand, it is fortunate enough to indentify that Australia has concluded its highest regional trade negotiation priority in the Trans-Pacific Partnership Agreement. Along with this pursuit, the continent has prioritized Free Trade Agreements with countries like Malaysi a, Indian, Nepal, China, Indonesia, Japan and the Gulf Cooperation council. Therefore, it means that for the concerned entrepreneurs, it would not be struggling to enter into the business market of handmade crafts in Australia. However, Australia has a multi-cultural society and a fair transport operating system, which would work in favor for the business venture of the entrepreneurs (Kremer and Symmons 2015). As per the fact that the business is about importing handcrafts and selling them into the Australian market, it is necessary to contemplate that being one of the significant members of world trade organization, Australia is obliged not to increase the rate of tariff above the agreed level in trade discussions. After having a brief understanding about the current market atmosphere of Australia, it is essential now to identify the strength and weakness of the competitors and power of the current suppliers. Therefore, porters five forces analysis would be convenient for the purpose. Bargaining power of the buyers Presently, the premise for handicraft business in Australia is crowded up with several professional bodies, which mainly promotes, produce and sells woodcraft, jewelries, glass crafts and various patchwork and quilting (Kremer and Symmons 2015). Henceforth, seemingly, the industry does not possess handful of business organizations who are engaged in importing and selling handmade crafts from the South East Asian countries. Therefore, it is understandable that the possible buyers for handmade imported products would not find numerous alternatives to buy the products. Thus, their buying power will be understandably low. Bargaining power of the suppliers As per the fact that there are few business ventures those concentrate in importing handcrafts from Nepal, the suppliers from Nepal do not find too many individuals in Australia to export their products. Therefore, it is fortunate that the entrepreneurial venture would not find it difficult to procure proper suppliers in convenient price from Nepal. Hence, the supplying power of the suppliers would not be adverse. However, in the context it is to mention that the demand for Himalayan crafts is raising therefore the suppliers of Nepal should have demands from several other countries and continents. Therefore, the entrepreneurs should not neglect this fact. Threat of substitutes Unfortunately, the threat of substitutes is high for the concerned entrepreneurial venture as per the fact that currently the Australian market for handicrafts is filled with various creative and handmade products. Most importantly, organizations like Taree Craft Centre, ACT woodcraft Guild, Australian Sewing Guild, and our handcraft and Australian Craft gallery changes their price range to meet the customer demand. At the same time, they prefer to modify their creative products according to their customers needs. Thus, the threat of substitute handcrafts is high (Joseph and Southcott 2013). Nevertheless, it is still fortunate that the amount of substitute handmade crafts from Nepal is less. Industry competitors It is unfortunate that the Australian crafts are not frequently celebrated and praised on national stage. However, the continent has given birth to several creative and innovative handcraft organizations like Venice Biennale, Canberra Potters society and Adeliade Potters club are there which are some of the potential organizations selling and promoting handmade crafts in Australia. However, it is still fortunate for the concerned entrepreneurs to have a smooth market entrance as per the fact that most of the organizations of handcrafts are non-profit organization. Moreover, only Australian Sift and Homewares Association Limited is the one of the well-known non-profit organizations that is comprised with importers and wholesalers (Joseph and Southcott 2013). Therefore, it is understandable that the entrepreneurs would not find too many potential competitors in the business premise of Australia. Threat of new entrants Australia is currently concentrating on the business of handicrafts to emerge in an international premise. Moreover, the continent has already engaged in a free trade agreement due to which Australia is providing opportunities to make business with the South East Asian territories. Therefore, such a bright scope is impressive enough to catch eyes of several entrepreneurs. Henceforth, unfortunately the threat of new entrants would be high. Target market There are several handcraft selling organizations in Australia who buying products from the retailers and importers and directly sell them to the market. The concerned entrepreneurs could therefore act as wholesaler for the organization. On the other hand, the society of Australia is multi cultural who possesses interest in trying new and creative products. Henceforth, the upper class household owners of Australia would also be the potential target market for the entrepreneurial venture. The two identified target markets and relevance behind choosing them can be evaluated and segmented as per the following Target markets Geographic Demographic Behavioral Psychographic The current handcraft selling organizations As the entrepreneurs have preferred to make business in the front of Australia primarily, they would target the handmade crafts selling organizations of Australia and specifically those organizations, which belong to the urban zone (Drucker 2014). The organization, which sells crafts from several importers and whole sellers of Australia who can be categorized in both profit and non-profit organizations. Behavior wise the selected target market would understandably prefers to buy products, which are innovative as well as worth of its price (Fairlie 2013). More precisely, the organizations would prioritize in buying those products, which can fulfill the demand of the customers. It has been found that the organizations who would like to buy products from the concerned entrepreneurs are considerate about both the elite class and middle class society (Garca and Welter 2014). Upper class and middle-class household owners Similarly as the previous target market, the second target markets geographic location would primarily be the urban area of Australia (Yu et al. 2014). However, as Australias urban and rural areas are not categorized by financial affordability, the upper class families of both the rural and urban side would be the target market (Weller 2015). The products of the entrepreneurs will target both the male and female individuals whose age group can be categorized among 25-40 and 40-70. Moreover, most of them are expected to have a fair financial background to afford the products. The upper and middle class families of Australia who are preferred as one of the chief target markets have a very sophisticated taste in collecting handcrafts. Their chief motive of buying handmade crafts is primarily for decorating their house. Understandably, it would be their purchase criteria. In terms of lifestyle and class, it can be said that the considered target market the household owners belong to the upper and middle class premise. The desire to have a sophisticated interior should be prioritized (Yamakawa et al. 2015). Marketing Product The considered product for the concerned entrepreneurial venture is various kinds of handmade crafts. In this context, it is required to mention that the handmade crafts would be mainly imported from Nepal. The Himalayan hand made products can be categorized among textile and non-textile products. In terms of textile handmade crafts, the entrepreneurs have decided to import woolen, pashmina, felt, hemp, and cotton and alloy products. On the other hand, in terms of non-textile items, the entrepreneurs have determined to import and sell almost every kind of Himalayan specialties, such as metal craft, silver jewelries, bone and horn products, ceramic, leather goods, Paubha, stone, Bamboo craft, crystal products, beads item, and handmade paper crafts. The plan is here to import the products and pack them in new attire in order to grab the eyes of the target market. In this respect, it is essential to mention that the packages would clearly mention the names and details of their distribut ors as well as their manufacturers. At the same time, the packaging would enlist the ingredients used in time of making the products. In case if handicapped and marginalized people or backward communities would make the products, then information about them would also be provided on the coverings. In this way, the entrepreneurs will be able to increase concerns about the marginalized and backwards communities of Nepal in the Australian society (Read et al. 2016). In this way, there will be scope for the inhabitants of Australia to provide financial help to the people of Nepal (Oswald Beiler 2014). Pricing Most importantly, for making a fruitful marketing, the entrepreneurs would concentrate in selling the product in two different price ranges. For the organizations and shops who will directly sell the imported products, the entrepreneurs would mainly adopt promotional pricing. It is because of the fact that the prime desire of the entrepreneurs is to promote their product in the market initially (Storey 2016). On the other hand, for the upper and middle class household owners, the pricing strategy would be value pricing (Henry and Shutt 2014). The decision for choosing value pricing for the second primary target market has been taken considering one of the behavioral traits of the target market, which is to pay for value. Therefore, economy or value pricing and promotional pricing would be two selected pricing strategy for the entrepreneurial venture. Place For selling the handmade products, which will be imported from Nepal, the entrepreneurs have selected the handcraft selling organization of the urban area of Australia. On the other hand, for the selling the product to the upper and middle class household owners, the entrepreneurs would do marketing in both the rural and urban areas of the considered territory. Both rural and urban premise would be appropriate for marketing as in Australia rural and urban societies are not categorized based on money. Promotion For promoting the product in both the rural and urban places of Australia, the entrepreneurs would consider promoting the products through various trades fair and by organizing various workshops. On the other hand, for encouraging the household owners to buy the products, the entrepreneurs would use online social media like Facebook and YouTube (Hens 2015). The entrepreneurs would also use pamphlets, posters, local newspapers and radios for promoting the unique features and product prices of the crafts. Strategies and tactics The strategies for attracting the target market, which will be applicable and relevant for the funds, would mainly rest on the premise of pricing and promoting. Affordable pricing The most significant strategy, which would be convenient to apply according to the fund and buying of behavior of the two identified target markets, would be to set individual price range (Sarasvathy et al. 2014). As discussed above in the pricing section, it would be appropriate to select two different kinds of pricing methods. With the help of different kinds of pricing methods, it would be easy to catch the eyes of individual target market (Daraban 2016). It is a considered fact that people always prefer show loyalty to those products, which seems affordable to their pockets (Al-Dajani et al. 2014). From the pricing section, it is understood that promotional pricing and economy pricing would be two pricing strategy, which would be applied to the individual target market of the entrepreneurial venture. For successfully accomplish the pricing strategy, the appropriate tactic would be to make a thorough market research prior to apply the pricing strategies on the market (Hagedorn and Jamieson 2014). At the same time, the entrepreneurs would need to make a thorough evaluation of their current fund to understand whether they would be able to import and sell the products in their preferred pricing strategies. Strategies for promotion The other most significant strategy, which would be logical and relevant for the target markets as well as for the fund is the strategy of promoting the products through trade fairs and online marketing. Online marketing or e marketing is one of the most convenient ways to reach to the customers in the contemporary world (Berry et al. 2014). As per the fact that the business venture has chosen the upper and middle class household owners, online promotion through YouTube and Facebook would be appropriate as per the growing habit of using internet among the society. On the other hand, promotions through various trade fairs would attract both the small and medium sized enterprises who are interested in selling handmade crafts (Tsang and Blevins 2015). Besides, due to the new trade agreement made by Australia, there would be impressive number of trade fairs in the following year. Critical risks For any entrepreneur, risks of competitors and the risk of losing money are two most significant constraints. Besides them, economical risk, and risks regarding importing products would be probable for the concerned entrepreneurs. Financial risks It is a possibility that the concerned entrepreneurial venture could not meet the expectations of the segmented target markets and lose the entire fund. The prevalence of encountering the particular issue is high as per the fact that the imported goods from the Himalayan zone may not attract the target markets (Hisrich et al. 2016). Moreover, there are already several organizations selling various handmade crafts. Economic risk It is fortunate that the current economic situation of Australia is stable though economic recession is a possibility that can take place any time. Therefore, the entrepreneurs need to have a firm management upon cash flow and supply chain (Henrekson 2014). At the same time, they should have the ability to predict demand and financial affordability of the target market. Competitor risk The entrepreneurs are desiring to establish a business of importing handicrafts from the Himalayan zone Nepal. However, as per the fact that the Australian market are currently having several profit and non-profit organizations selling handicrafts, there is strong chances that the entrepreneurs would have to face failure in attracting their respective target markets. The existing strategies of the rival organizations may beat the strategic operations of the present entrepreneurs. Risk regarding importing It is a strong probability that the valuable handmade products coming from Nepal may be damaged in time of importing. Due to inappropriate transportation and inappropriate handling, the products would be lost or completely ruined, which could make huge financial loss for the concerned entrepreneurs (Parry and Mallett 2015). Besides, sudden changes in foreign exchange and in currency value can also prove detrimental for the business venture. Financial Estimate of the business venture: Net cash inflow 49,000.00 52,025.00 49,148.00 Considering the above income statement, it can be said that the organization is expected to earn profit from the business amounted to $26,355 which is expected to increase in subsequent second and third years. Further, certain costs of the business organizations are expected to diminish in the future years that includes advertising cost while the distribution cost is expected to increase. Similarly, financial position of the business reflects current ratio more than one in all the three years, which represents that the organization has the capacity to pay off its current obligations through the current asset resources. In addition, the organization is expected to have positive cash flow from its business operations, which represents increase in the second year. Conclusion The assignment chiefly focuses on the entrepreneurial venture of importing handcrafts from Nepal to Australia. According to the assignment, in order to accomplish the aim of establishing the business in the premise of Australia, the entrepreneurs would select the small and medium size organizations selling handmade crafts and the upper and middle class household owners who have a sophisticated choice for interior. Moreover, the assignment has indicated that the entrepreneurs would select promotional pricing and economy pricing for their individual target markets. 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