Existing Good or Service Business Proposal T. J. ‘s Corporation Business Plan Tresa Milton ECO 561 March 25, 2013 Dr. Guthlac Kirk Anyalezu T. J’s Corporation Business Plan T. J. ’s Corporation Business Plan In today society the development of technology, which are items that individual normally use being transferred into a different era. These are the items which, individual’s use every day newspapers, magazines, and now books has been supplementary to the technology world in the form of Kindle, Nook, eBook, or on CD’s. T. J. s Corporation will produce a technology which, will take a book, which the corporation can use and scan it into an eBook along with an accurate synthetic voice for individuals to listen. However, T. J. ’s Corporation will show how the revenue will increase, determine the profit-maximizing quantity, and marginal revenue to maximize profit. Also T. J. ’s Corporation will analyze mix of pricing and non-pricing. T. J. ’s Corporation will be looking for a location to work on the proposal and have the supplementary employee’s to help with transference of books to the digital format. T. J. s is currently working out of a small building and with the new proposal needs something bigger. Working in a small building puts the employees in the situation where he or she is working with little run to work. With the new location it will allow T. J. ’s Corporation to work on the new design and have the consumer’s product out faster. Assumptions and Market Structure Although other corporation have books out in eBook, the books are merely only accessible in the merchandise provided by that company. T. J. ’s Corporation merchandise consumers will have the option of reading the book quite or read along with the digital sound track.
Since, T. J. ’s owns a patent on their technology their company is considered monopoly, because T. J. ’s is permitted the only business that is selling this type of merchandise (McConnell, Brue, ; Flynn, 2013). Also there is an assumption that any employee which will be working in a month is about $300 based on sales. T. J. ’s Corporation has to generate another digitizer for their workers to have so more books can be downloaded quicker. Growth of Revenues TJ’s Corporation requires an improved marketing strategy for their digitized books this approach will allow sales to increase. If T.
J. ’s changes the prices of their books their revenue will also increase. T. J. ’s Corporation is using a small website and on the sight the prices are as follow: $10 for books with failed copyright (old books), and $15 for books containing an copyright (new books). T. J. ’s Corporation sold 1,000 old books and 2,000 new books in the first six months. T. J. ’s did some research, found the new books could be brought for $5 charge and CD are $20 (R. L. Copple, 2013). With this information the company can rise their new books price to $18 to add a $3 profit and lower their older books to $7.
The change in price could actually help boost the sales of the books because the older books are at a lower price which could increase revenues and the increase in price on the newer books will increase the profit. In addition, if Bury were to market his books to high school and college students there could be an increase of revenue. Bury would need to add text books to the books being digitized but if students have the option of listening to someone read the books the information might be easier for them to understand.
The pricing on the books would have to be increased because of the actual price of the textbook and a higher copyright fee. The addition of the books would help to increase revenue and bring more traffic to his site for the other books. Profit maximizing Will Bury would need to look at his fixed costs (those costs that do not change the output) and the variable costs (costs that do change based on the level of output). Bury’s variable costs are the five dollars for the copyrighted books that will help to expand his catalog and the costs associated with his website.
This can be in the form of number of transactions or purchases and the fees associated from them. In addition, Bury will need to hire an assistant and the $40,000 that he pays will include taxes and benefits, the purchase of $14,000 in computer equipment to advance his technology, and $6,000 in advertising. This would be $60,000 a year or about $7,000 a month of fixed costs. Marginal costs and marginal revenue If there is an increase in output there will always be a raise in profit as long as marginal revenue is greater than marginal cost.
There will always be a need for books to be digitized so there will always be one more unit of good to be produced and sold. There will always be new books being written and this means that there will be a constant need for books to be digitized. There will be many choices for customers especially when new books are released. Pricing and non pricing There are many types of pricing that Bury could use and needs to take a look at all to see what would fit his business. Bury could offer single or multi unit pricing, quantity discounts, and any specials or discounts that he feels he could offer during holidays.
Bury could offer promotional discounts as a way to increase revenue and bring in more customers. If Bury was to look at when book fairs or sales occur he could set up a table with information and computers for customers to purchase or look at his database. With non pricing the strategy is to make the price less of a factor with customer purchase and make product difference a greater factor (McConnell, Brue, & Flynn, 2009). Marketing research, new product development, and advertisement could be considered non pricing competition because Bury is trying to find ways to increase his sales. Barriers to entry
Since, Bury’s business is considered a monopoly and is the only one with the technology then there should be no barriers. A barrier occurs when there are other companies that exist in the marketplace and have established patents that will make it difficult for the product being copied (McConnell, Brue, ; Flynn, 2009). Since, Bury does have a patent that means that he will out skill his competitors and with his new technology he will dominate his industry. With these barriers there could be a problem at the beginning but once the company is establish Bury wont have any problems. Product Differentiation
Will Bury’s product is very different from what is out in the market because it is a digital and voice synthesized is more convenient than eBooks or books and CD’s. With his product he offers customers a more convenient way to listen and read books in one place. In addition, for those avid readers the introduction of eBooks will allow for multiple books to be housed in one location. Minimized costs Mr. Bury will need to find ways to minimize his costs so he can increase his revenues. At the present time Mr. Bury will not be able to hire a full time assistant but once he has an established revenue then he can hire a full time assistant.
Another way to save money would be to have his children or wife help with digitizing the book. In addition, if Bury was willing to train and work with high school and college students he can have multiple people to work part time and can have the books digitized faster. This means that he can increase his catalog of books fast and he will be able to offer more books for his customers. Conclusion At present, Mr. Bury has many options available to him that he can implement to have a successful business. The main item that he has to consider is the price, cost, and the manufacture level for creating the digital books. Mr.
Bury has done a great job of identifying the costs associated with copyrighted material and the price that he would want to sell his books. One item that he would want to consider is the fact that he could change the price of the old and new books to increase his revenue and he can look to see if could lower the price that he pays for the royalty of the book. Currently the market is small and with Mr. Bury being a monopoly with his patented technology, he can really expand his market. The one item the Mr. Bury has to watch is the economy and has to remember that he has to stay on top of the competition. References Copple, R. 2012). How do ebooks cost. Retrieved from http://graspingforthewind. com McConnell, C. R. , Brue, L. S. , ; Flynn, S. M. (2009). Economics: Principles, Problems, and Policies (18th ed. ). New York, NY: McGraw-Hill Company. New Good or service business proposal This assignment focuses on introduction of a new product in the existent line of business and explains the method for development of goods for generating more revenue. The concepts of elasticity of demands, market structures in addition to profit maxi maximizing techniques are also discussed which are helpful for the good and also to counter the barriers