Business forecasting and financial analysis are critical considerations that need to be taken into consideration when discussing risks that may impact the organisation as it reaches a new market. There is always space for quality items to find their market share, considering the desire for health beverages just bubbling everywhere.
The purpose of this report is to focus how the organisation is going to make a way into the global market. It would also illustrate numerous sources of funding that could be implemented by the organisation to finance the new foreign venture. All criteria surrounding new business projects and the imperative problems they have to contend with are taken care of by the study. The full decision to enter into the business would be apparent by the conclusion of the report.
The Business Concept Employed by Balance-Wellness
The corporation is a company with restricted responsibility, with the capacity to own land, prosecute and be sued on its behalf. It has an eternal succession as well. This corporate arrangement was picked because the responsibility of the owner to creditors and other third parties owing by the firm is restricted to the amount of cash injected into the company by the owner. For firms starting out, it is appropriate that it is not obvious if the same would be.
The Company is Going to
The company will be in the manufacturing of soft drinks. Wellness beverages can be processed and eventually transported to separate customers in New South Wales. If the firm progresses, it will open other production and bottling facilities. The business would still start with less than ten workers, but as time goes on, the same will be increased. This comes in an attempt to conserve on expenditures. The prices of the company would be extracted from the assets of the owner, and the shortfall will be filled by a bank loan to be received. It is, however, appreciated that the funding to be pursued has an expense that must be in the form of interests dependent on the venture. For firms starting out, this is quite sensitive that the section needs to be charged irrespective of whether the company produces gains or loses. This places the organisation at danger.
Balance Wellness’s Present Position
The Canadian market should be identified as the highest growth potential that the organisation can pursue, due to the rising demand for energy and soft drinks. Because of many variables that will help to explain the underlying reasons for settling for the country, this targeted sector. These explanations and the challenges of different dockets shape what can be categorised as a market study that takes into consideration all principles, from social engagement to the political system and policies that exist in the nation in question (Seagrove, 2016). Provided the novelty of the drink, the market would readily embrace it.
Under the ‘Balance-Wellness’ trademark, Balance Wellness Drink goes on the market. The organisation seeks to break up the Canadian wellness drink business, which will be fair to label Redbull Drink very monopolised. To grab control of the sizeable consumer segment, the latest drink would enter the market.
Balance-Wellness wants to consider the global views too plainly, despite knowing all the Canadian business criteria. Risk identification aims to address the risks that may impact the enterprise after it has reached a new sector. There is already space for quality goods to find their market share, with the market for health beverages just bubbling everywhere. The purpose of this analysis is to highlight danger issues that may occur during the introduction of the Balance wellbeing drink in the Canadian sector.All criteria surrounding new business projects and the imperative problems they have to contend with are taken care of by the study.
Due to many variables that help explain the underlying reasons for settling for the country, Canada was determined to be the target market to move into. These explanations and the challenges of different dockets shape what can be categorised as a market study that takes into consideration all principles, from social engagement to the political system and policies that exist in the nation in question (Seagrove, 2016).
Under the ‘Balance-Wellness’ trademark, Balance Wellness Drink goes on the market. The organisation seeks to break up the Canadian wellness drink business, which will be fair to label Karma Wellness Drink very monopolised. To grab control of the sizeable consumer segment, the latest drink would enter the market. Yet Balance-Wellness has to fully grasp all the conditions of the Canadian sector in order to get a successful run and stronger opportunities to avoid a miss at the beginning of the initial stages of initiation.
Risks that are Strategic, Legal and Regulatory
The required paperwork and checks were carried out by Balance-Wellness before the drink could be enjoyed on the Canadian sector. Via its Food Inspection Service, before granting them a nod to perform sales in Canada, the government performs numerous checks on food and drink samples. The terms of the legislation enable the materials, their length, concentration amount, and conformity with the requirements laid bare for those within the sector to be properly disclosed.
Failure to maintain the rules and principles of the regulator will make the business struggle from its initial steps in the industry. In the food and beverage sector, the government of Canada has specifically defined clauses and provisions (Healy & Palou, 2012).
The corporation is expected to obtain a work permit to run a subsidiary of an American company with an American company growing into the Canadian sector. The danger includes fails to consider and comply with local Canadian business laws. Canada provides one of the strongest industry cultures in America for pure politics, with very few municipal business legislation. A favourable climate for the flourishing Balance-Wellness Drink should be created by modest legislative measures placed on small and expanding companies.
Exchange Rate and Threats in Currency
There are random valuation swings in the Canadian dollar, with the latest scenario seeing a much much lower value in seven months in a row. For a company venturing into the Canadian sector, Canada’s low dollar valuation can imply a great deal. The low dollar value implies more expenditure on Balance-Wellness Drink than American tourists flocking to Canadian destinations, thereby investing some dollars. The poor dollar in Canada ensures that exports seem to be much cheaper and that imports are very costly.
We appear to see an abundance of goods entering the Canadian market while the dollar is up in value, mainly because of the low cost of getting the items to the Canadian market. In essence, this will provide a strong chance for the Balance-Wellness Drink to stamp its dominance on the emerging sector and battle experienced competitors like Karma Wellness Drinks against rivalry. Financial Summary for Balance-Wellness
While the Canadian industry is dominated by wellness beverages, Balance-Wellness should consider investing in maintaining bull’s dominance in the sector. To advertise this drink to numerous provinces in Canada, the business wants to recruit millions of dollars.
Ericson & Doyle (2004) claim that, owing to the elevated air temperature, Canada has a strong market for beverages. Energy beverages, in comparison, are healthy body coolers. The financial summary that is planned includes:
Financial Summary Planned
As this continent has a strong appetite for beverages, this financial summary attempts to bring and advertise Balance-Wellness Drink to the Canadian industry. As it significantly contributes to the total demand of the region, the organisation can also suggest narrowing down to the Canadian regional sector. The capital needed in the advertising, the establishment of depots and the expected labour costs would be significant.
Financial preparation is important if expenses of an organisation are to be used intentionally. The mechanism enables businesses to establish, execute and monitor their monetary strategies by economic powers. Different variables influence how the business works (Olson & Zeckhauser, 1966).
When starting off on a project, the organisation aims to produce a particular goal within a given timeline. A company, for instance, could be driven by an idea to capture a certain consumer niche. Therefore the expenditure choices may be driven by a desire to invest in strategic divisions of operations. This ensures that any aspect that impacts the institution’s ultimate sustainability is effectively tackled in the long term (Farmer, 2002).
New technology greatly influences the financial planning processes. To effectively compete in the industry, the company must adopt new concepts as these concepts avail resources required to provide greater understanding by the planners.
Demand is the key aspect that informs financial decisions to be adopted by a company. For institutions offering financial services, they have to determine whether target clients can afford or need the company’s services. For example, there may not be a direct relation between a clients’ success and the company’s financial services.
Allocating more resources through the financial planning division helps a company eliminate many factors that may affect its overall profitability. Adequate resources will influence the level of leverage the firm operates with, subsequently resulting in huge margins. Setting up of deport
Setting up deport will cost the company around $10,000,000 inclusive of labor. The company can also consider importing the drinks from the operational country before setting up an active industry in the country. Importation of the glasses to the target country will slash the expected capital by about 10%.
The company needs to employ about $500,000. This will cater to all sort of the advertisements, remember the initial stages of introducing products to the market remains one of most challenging things.
The company will need to major in personal selling and product promotion as the primary marketing mix. This is because a new product being introduced will encounter much opposition; thus, marketing the product directly to the customers will create a positive impression. It will help in increasing product awareness and brand acceptance.
Financial Aids that Might Boost Their High Demand in the Capital
Aid from international monetary institutes; the influence of such massive institutions cannot be undermined in the business world. The International Monetary Institute (IMF) is responsible for creating economic forecasts, providing advisory and enforcing monetary policy upon the member stat financial to get the desired outcomes.
Such bodies give the view of economic prospects as growth estimates, hence inviting or scaring away business from a particular economy. With a healthy economy and low population, the picture depicted in the Canadian economic map is still very robust and has excellent growth opportunities. Besides, these international financial institutes might aid in giving financial help to the company.
Issuing out shares, the company ought to issue ought shares to the public. This will help raise capital for the global venture, but it will also increase better management since claims bring ownership. The more the number of shareholders, the well the company will be governed (Seagrove, 2016).
Considering investing in another real estate, the company should consider supporting other forms of the business. This will increase the cash flow in the industry hence providing more capital.
Exit Strategies Which Will Be Fit the This Type of Venture
If the company needs to exit from the global market, the joint venture would be most appropriate. This is because the joint venture will allow the company to decrease competitive power hence reducing competition. The reduced competition will mean decreased supply, therefore, increased profits.
Besides, if any losses will be incurred, which might have a low probability, the company can also decide to pull out of the market.
The below flow chart is a current sample situation in an enterprise. The flowchart is useful in depicting flaws and areas which might need improvement. Once the circle is complete, each process’s efficiency and effectiveness can be determined, and an appropriate decision made upon analysis.
To analyze the competition level and the stance taken by Balance-Wellness in a bid to stand from the competition can be summarized as an aggressive strategy. The company seeks to weigh in all the risks associated with marketing the new product into the Canadian market with zeal, aggressiveness, and determination. It may not be easy to dislodge a seasoned brand like Karma Drinks, but taking hold of the customer base captured will keep the company focused on standing a chance of earning a sizeable market share within the initial stages of inception.
Furthermore, the formula utilized in producing Balance-Wellness Drink is far much better than those of other several wellness drinks in the market. The unique formula and way of making the product keeps it apart from the rest and helps set the high bar in prospecting. Healthy competition is what the company advocates for, with ethical values highly observed beyond any meaningful doubt.
Taxation and Double Taxation Risks
Canada has an agreement with several countries include the United States of America. This agreement helps deal with the issue of double taxation, meaning that money would be taxed double if the deal never existed. Canada has the least taxes than the US, meaning that business stands a better position to gain their ground in the market relatively easy and faster than their American counterparts. Lower taxes are incentives to both new and small businesses, with the Federal government maintaining a considerable tax rate throughout (Ericson & Doyle, 2004). Illustrative graphs tend to depict the following trend;
Assessing Social and Ethical Risks
Canada has an almost similar culture to the United States of America. However, the US culture is quite more vibrant and more interactive than the Canadian one. The Balance-Wellness product would strive to taste and feel inclusive to the Canadian culture while engaging in ethically healthy competition in the market. Canadians are known for their love of wellness drinks, with the Balance-Wellness brand seeking to lift their passion and culture of taking wellness drinks further.
Taking into account that both America and Canada have culture and ethics which can be reflected as global from a bigger picture, it would be safe to state that the ethical values emphasize throughout the branding process would be in line with the culture and ethical parameters outlined in the business ethics practices of Canada. Balance-Wellness Drink brings people together through its uniquely formulated taste and formula, taking social aspects to another level. Our uniqueness ought to be our survival strategies in the new marker venture.
Cyber and Technology Risk
The new Balance-Wellness Drink is well placed in protecting the uniqueness in its branding and formulation aspects. The real risk may be posed by hackers who could manipulate the system in search of damaging information or coping strategies. However, the right measures seem to be in place for the safety of the product’s authenticity and protecting the business part in the sense of marketing strategies and new developments (Mullins, 2012).
The risks associated with technology here should be addressed through marketing strategies. The products would utilize all relevant technological media to launch its assault on rivals in the market. Technology will only be used to our advantage, but care must always be exercised to avoid conflicts of interest.
Tariffs and Tariff Barriers
Canada requires business operators to fully define their product to qualify for a unique code for the product. This code is used for setting tariffs or duties on imports coming into the country. With the Canadian Trade Tribunal in place, there is nothing to worry about as the body reviews a product that the importers may deem to have been miscategorized, hence getting the wrong tariffs.
The Role Played by the International Financial Institutions
The influence of such massive institutions cannot be undermined in the business world. The International Monetary Institute (IMF) is responsible for creating economic forecasts, providing advisory and enforcing monetary policy upon the member stat financial to get the desired outcomes. Such bodies give the view of economic prospects as growth estimates, hence inviting or scaring away business from a particular economy. With a healthy economy and low population, the picture depicted in the Canadian economic map is still very robust and has excellent growth opportunities.
Better Prospects Mean Better Business
With the IMF posting improved forecast on the Canadian economy, Balance-Wellness Drink has a foreseeable future of success in the market. The direction of the two institute’s economy plays a massive role in asserting faith in the economy and investors seems to assure their returns in a short period. Thus, Balance-Wellness seeks to push through the risks and lay a firm market base in the promising wellness drink industry, previously dominated by just a few products. It will allow the organisation to make a quick and effective entrance into the Canadian market and ensure the results in the study are well taken care of.
Having a good idea is one thing, but knowing where to take it can be challenging. Venture capitalists who operate in one sector have economies of scale, develop many contacts, and connect firms across their portfolios. They can open doors, create synergies across companies and provide entrepreneurs with access to top talent. Options are empowering, and the connections can create a snowball effect that can facilitate rapid growth (Mejia & Gonzalez 2010).
With the emergence of technical innovation, because of the cost savings involved, internet tools such as social media are increasingly becoming an effective advertisement tool, especially for potential businesses. Therefore, by opening up Facebook accounts and Twitter trends for the firm, the company will utilise social networking.
There will also be a well-structured platform for the firm where clients and vendors will contact it to discuss market instruments. It would also save employee expenses for the business since an individual will only come to the company premises when they know the goods. The tour would be for corporations to decide.
It would also carry out print and radio transmissions. The broadcast that would be used would be on the local media so the priority of the business on the launch of operations will be that. This will, though, be assessed in time to ensure that it helps the business since it is considered to be rather costly relative to other promotional strategies.
The company’s workers would also serve as the company’s representatives of goodwill. This ensures they are supposed to wear corporate t-shirts and get their vehicles labelled at their order. This would encourage third parties to get a more detailed understanding of the business.
The usage of billboards is another manner in which the business will market its services. This expire after a certain time, and cost-effectiveness should be weighed before resorting to the same business. This billboards would be positioned at strategic positions where the future clients of the organisation will be identified. This includes preliminary review of the sector.
Based on the above finding, I would highly recommend that the company venture into the global market since it will significantly increase profits. This will also help the company to bridge the gap in demands and supply.
Better prospects mean better business with the IMF posting improved forecast on the Canadian economy and global soft drink industry at large, Balance-Wellness Drink has a foreseeable future of success in the market. The direction of the two institute’s economy plays a massive role in asserting faith in the economy and investors seems to assure their returns in a short period.
Thus, Balance-Wellness seeks to push through the risks and lay a firm market base in the promising wellness drink industry, previously dominated by just a few products. Ensuring the findings in the analysis are well taken care of would help the company make a smooth and successful entry into the global market.
- Barrow, C., Barrow, P., & Brown, R. (1998). The business plan workbook. Kogan Page.23-78
- Ericson, R. V., & Doyle, A. (2004). Uncertain business: Risk, insurance and the limits of knowledge. University of Toronto Press.
- Healy, P. M., & Palou, K. G. (2012). Business Analysis Valuation: Using Financial Statements. Cengage Learning.
- Heckman, M. A., Sherry, K., Mejia, D & Gonzalez, E. (2010). Energy drinks: an assessment of their market size, Comprehensive Reviews in food science and food safety, 9(3), 303
- Mullins, J. (2012). The new business road test: What entrepreneurs and executives should do before writing a business plan? Pearson UK.317.
- Seagrove, K. (2016). The complete guide to business risk management. Routledge.