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Тhis Subjесt is Аbоut Еntrерrеnеurshiр 8 Page Revision
Тhis Subjесt is Аbоut Еntrерrеnеurshiр 8 Page Revision
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Statement as an Entrepreneur
Based on the business plan, it would be prudent to understand that the charging of phones
in rural areas through the use of advanced solar technologies in Kenya is not new (Hope, 55). For
example, there are those charging systems that besides charging close to ten mobile phones at
once, they also provide light for families (Tenenbaum, 39). However, despite this reality, due to
the electricity problems among many families in the rural Kenya, the demand for this type of
The organization structure of the company is well structured. Firstly, the fact that the
design and other technical aspects of the project will be done in the UK through the mother
company is a prudent decision since the Newco UK has been in this industry for lone and has
necessary personnel for the initiative. The Kenya structure of the business is also great since the
senior officials will be recruited from within the country. However, the plan fails to provide skills
and experiences of individuals who will drive the entire project forward.
On the business protection, one of the forms of protection that the company can use in
securing the initiative is through licensing the product from the local authority. Although this
does not provide any legal framework to protect any such idea, it creates the ownership aspect of
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the business (Obudho, 93). Secondly, although the case implies that patenting the product might
be costly in Kenya; this is the only sure way that the intellectual property law has been applied.
However, trademarks are also instrumental in protecting an idea but they mostly focus of the
design or packaging of the final product, which might give room for someone to “steal” the idea.
Unlike some of the African countries such as Ethiopia, Kenya’s trading environment is
liberal such that one is not restricted to do business in certain areas of the country (Jerven, 49).
The government does not own the monopoly of controlling all aspects of the markets (The World
Factbook). In this way, an investor is allowed to work any part of the country provided laws are
followed (The Report: Kenya 2014). Therefore, the innovation by the company can well be
used by Newco, the downstream industry could be either concentrated among few firms or
fragmented. In the case of Newco distribution strategy, the distribution will be fragmented on a
given local town center in rural Kenya. Notably, there are kiosks and retail business in almost
every town center in rural parts of Kenya. If Newco is distributed through such outlets, the
accessibility will be easier for the end users, thus fragmented distribution in local town centers.
The market timing in the business plan is not realistic. Critically to note is that Kenya
now is in the process of electrifying its rural area under the “last mile connectivity project”
(Brook, 63). The connection charges to the electricity network has been reduced by more than
half to about USD 150, which is coincidentally the same price tag for the product, Newco. In the
next five years, the government expects to have connected eighty percent of all areas in the
country. Currently, all public schools in the country have been connected to the power grid
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(Gillett, 65). Evidently, with this rate of connection, it is clear that the rural community will be
charging their phones in the homes, which will harm the success of Newco. Therefore, although
the project is viable at the short term period, it may not be sustainable in Kenya.
As an entrepreneur and based on the content of the business plan, the viability of the
initiative is also questionable on the basis of the cost of the entire process. For example, more
than 50% of the total cost will be spent on human resources. As a starting venture, it would be
tricky to direct half of the cost of paying the personnel. In this way the marginal profit of the
product will be affected. In fact it is not realistic to increase salaries every year to managers
especially the first years of the business. This will harm the sustainability of the initiative.
Additionally, the total fixed cost is also expected to increase from year one to year five from
twenty to forty percent. The higher volume expected to counter the fixed cost increment is
hypothetical, which may drain the business. In this way, even if valuation of the initiative may
Strengths
The strategies put in place to ensure that the end user benefits from the product are
convincing enough. In the business plan, direct sales have been noted as the most viable method
of distributing the product to the local people in the rural Kenya. Preferably, direct sales to local
kiosks and business owners will make the Newco accessible at the closet point to the people.
Further, the value proportion explained in the business plan is clear. To the local
consumer, it is clear that Newco will be instrumental in alleviating poverty to the local small
business owners in that they will be able provide for the relatives, families, as well as expanding
their retails outlets. By making the local people able to charge their phones all through, the
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economic progress of such areas would be fastened. For example, Mpesa, which is a mobile
transfer service, will be frequently used and Mpesa businesses will be able to get more customers
The pricing model has been well explained. Accordingly, the pricing model adopted
provides for flexibility. Notably, the income levels of local people who are in most remote areas
in Kenya are almost the same. In this way, having a fixed price tag of USD 150, which is
approximately fifteen thousand Kenyan shilling will be fair enough for the retail businesses
owners to afford? At the same time, the fixed charging price of fifteen shillings is good enough
for local people in rural areas to charge their phones. At a personal level, one price strategy is a
suitable pricing model for this initiative. Further, the flexibility of the pricing strategy has been
stated in the plan by switching to skimming pricing strategy and to maximum market share based
The market roll-out plan described in the business plan, based on the sales and
situation of the rural Kenya where makeshift business establishments are common. The
distribution of the product using this retail business such as kiosks is a wise strategy.
Weaknesses
Ironically, the business plan for the NEWCO fails to provide the sources of funding that
is expected to finance the entire project. In the financial analysis, the business plan has provided
for the two types of costs, which are fixed and variable coast. On this two, the plan has detailed
the financial expenditure but has not provided for their sources. At the same time, the plan has
not included the protection cost for the product thus rendering the entire initiative and idea
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vulnerable to not only duplication but also copying. In this way, the financial plan fails to allow
for a protection strategy. One of the key aspects that are not included in the plan is the timelines
based on the milestones that the project will take. Provision of project’s milestones is critical in
analyzing the feasibility of a project. The failure to provide timeless has made this business plan
The business plan only outlines different departments and divisions such as sales and
marketing. In this way, it limits attempts to understand individual skills and abilities, including
the finances that goes into the hiring the team. The organizational structure was well formulated
but the entrepreneurs would have provided the necessary skills that are needed in order to
On the other hand, from the business plan, the Newco does not control the assets for
distribution of the product to the local consumers. In fact it would be very difficult to acquire the
complementary assets that are needed for the product to reach the end user. Notably, rural areas
in Kenya are expansive and remote sections of the country which makes it challenging for even
established firms such as Coca Cola to reach all their potential customers in such areas.
Additionally, since the company will be earning from the sales made on the product as
well as the direct sales to the end consumers, on the context of Kenyan scenario this strategy may
not work. The government of Kenya has embarked on an aggressive process of rural
electrification (Leys, 19). At the same time, in most of the rural areas the retail business owner
will find it cheaper to use electricity in charging phones for local, thus disregarding the purchase
of the Newco.
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Moreover, the entry strategy of the company could be tricky for the business. As a new
company in the region, starting off by covering all rural areas in Kenya could lead to failure.
Based on the plan, it is clear that the first three years will be difficult and the company may not
be able to cover all its starting capital as well as making profit. Critical to note is that the level of
competition that is likely to come and its degree is not known, which means that if the
competition will be stiff, the company may not be able to reach the break even and make profit,
In reference to the business plan, the entrepreneurs did not use the dual approach method
in coming up with the market size of the initiative. The only method used by the entrepreneurs is
by assuming that if there are approximately twelve million people in the rural Kenya with mobile
phones, this means that they all need to charge their phones, thus making a considerable market
size. However, this assumption is flawed since some of the rural people already use solar panels
to light their homes as well charging their phones including watching TV among others.
Therefore, the twelve million people could be way too high to consider as the market size.
Notably, as noted above the entrepreneurs failed to make proper market segmentation. They
would have designated the specific areas that the product would be needed. Instead, the
entrepreneur used a general assumption about the market segment as the whole of the rural
In any project, it is always prudent to include the monitoring and evaluation measures
which measures the progress of the project based on the initial objectives (International, 84).
However, this business plan does not also provide for any tools that could help in assessing the
outcome of the project and the success level of the product. As a recommendation, it would be
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wise of balanced scorecard was used in measuring the progress and the outcome of the project.
Balanced score card is considered as a management and strategic planning system that is used in
aligning business or organizational functions to the vision and mission statements. Based on the
four variables of this method, which include an internal business perspective, the customer's
perspective, the financial (or shareholder's) perspective and learning perspective, the project
stakeholders will be able to assess the success levels during and after the completion of the
initiative.
In order to ensure that the distribution is easier, it would be prudent to get into contract
with the local retail shops and property owners which will allow Newco to decorate some
buildings with their colors thus displaying the presence of charging service by Newco. This way,
customers will be able to easily spot where to charge their phones (Ikiara, 38). The strategy has
In light of the entry mode, it would be prudent to start small in a given locality such one
county in Kenya before scaling up to other regions. In this way, the company will have
The approach towards potential market segment has been flawed from the beginning. In
this way, the entrepreneurs would have done more on designating different market segments in
Kenya instead of concentrating on the general overview. As a starting step, the initiative would
have concentrated on a specific area such as one county with the intention of scaling up
gradually to other sections of the market size. Covering the entire nation would be costly for the
company and the high cost may not be recovered due to the electrification programs and other
1. Provide an overview of the way you initially would distribute the shares, before external
investment.
The starting position would be to have the key player in a given type of share take the
fifty percent. However, the deal was that the key shareholders take forty percent while the rest
share equally the remaining shares.
3. Shareholders Agreement
The increment of the capital will be based on if there will be other interested players.
The final distribution of share will be conducted soon after the commencement of the
project.
Categories of shares
Capital shares
Founder shares
Technology shares
Management shares
The voting powers will be based on the number of shares held at an individual basis.
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Works Cited
Brook, Penelope J, and Suzanne Smith. Energy Services for the World's Poor. Washington, DC:
Hope, Kempe R. The Political Economy of Development in Kenya. New York: Continuum
Ikiara, Gerrishon. Economic Situation in Kenya: Presentation and Analysis. Nairobi, Kenya:
International, Business P. U. Kenya Energy Policy, Laws and Regulation Handbook. Place of
Tanzania, and Zambia, 1965-1995. Oxford [England: Oxford University Press, 2014.
Print.
Tenenbaum, Bernard W, Chris Greacen, Tilak Siyambalapitiya, and James Knuckles. From the
Bottom Up: How Small Power Producers and Mini-Grids Can Deliver Electrification
The World Factbook 2007. Washington, D.C: Central Intelligence Agency, 2007. Print.
The Report: Kenya 2014. Nairobi]: Oxford Business Group, 2014. Print