Engineering Management Business Plan for Polyethylene Terephthalate

Question: Discuss about theEngineering Management Business Plan for Polyethylene Terephthalate. Answer: Currently, plastics have become essential item in the manufacturing industries and in homes, together with increased consumer understanding about the solid waste recycling, has led to an increase of demand for the plastic products. One of the most collected plastic materials collected for recycling is the Polyethylene terephthalate (PET). It originates from post-consumer beverage and water bottles. Due to the high demand of recycled resins and the availability of market for the plastic packaging markets, the founder of the Replay Plastics Company decided to put up a polyethylene terephthalate cleaning and refining plant. They decided to locate the plant in western United States where there are no such companies. On the other hand, Application Technologies Inc. is a company that is looking forward to produce packaging technologies that will be able to better effectiveness and simplicity in topical consumable products. It is planning to use Appli-K Pouch packaging technology. Appli-K P ouch is a usable patent-pending packaging that has built-in applicator that uniquely separates it from the previous packaging technologies. (Operations Strategy for Application Technologies Inc., 2017). Application Technologies Inc. company is mainly driven by the unique opportunities offered by their first packaging technology. The company believes that their product will solve all the problems that other pouches have not been able to tackle. However, for these two companies to be successful, they must have a business plan. Business plan is a written guide for a business that outlines its objectives and details on how it plans to achieve those objectives. It outlines the structure, the products, customers, financials, and the growth potential of the business. Therefore, this paper intends to produce a report that analyzes and evaluates Replays Plastic Company and Application technologies Inc. business plans. Three Strongest Components Some of the three strongest components of Relay Plastics company business plan include the companys Management team, market analysis, and financial plan. When referring to the Relay Plastic management team, the company has the most experience personnel in relation to recycling, manufacturing, and marketing of plastics. Because of such experienced employees, the company is better positioned to compete with others as quality and efficiency is concerned (Zhouying Ying, 2011). Additionally, the company has done an extensive market analysis. Their research has shown that there is a strong demand for recycled plastics and that major users of plastic packaging have started incorporating some recycled plastic content in their products; hence, increasing market for recycled plastics. Apart from high demand, the business has also been located in a strategic location where there are no proximity compactors. It is located in Western United States away from Northern 16 major recycling companies (Plastics Recycling, 2017). Moreover, the company has put a superior financial strategy by using important financial assumptions, break-even analysis, and the projected profit and loss accounting. Besides, it has a well-planned projected cash flow, which can help them in arranging how to pay for the companys long-term loan. On the other hand, Application Technologies Inc. company three strongest business plan components include financial projection, risk management and reduction, and management team. The company has put in place a commendable financial projection. Even though the product is new, the company focuses a self-sustaining operation with positive cash flow that should occur a year later after the initial production (Operations Strategy for Application Technologies Inc., 2017). The company has a positive projection of superior sales within a period of four years of which they also expects profit of $11.6 million and $20.8 million cash on hand. Besides, the company has also laid down strategic risk management and reduction plans through the use of risk factors such as insurance among others. They have also made sure that all of their products and ingredients have been approved by the FDA. Other than financial projection and risk management, Application Technologies Inc. also has competent manage ment team that comprises of seasoned professionals with significant experience in all elements needed for the success of Application technologies. For example, Johann Verheem who is the CEO and Vice President of New Product Development has twelve years working experience in developing such products. Three Weakest Components Some of the three weakest components on the Relay Plastics Business plan are the competitive comparison, potential conflict, and financial summary. When comparing Relay Plastics with the other plastic manufacturing and recycling companies, it is evident that it offers its product at a cheaper price (Plastics Recycling, 2017). Being that its products are cheaper, customers might be of the opinion that they are of low quality and might opt for going an extra cost to acquire quality product (Ludwig, 2001). The price should have remained the same as of its competitors being that it is located far away from the major recycling companies and that its products are of high quality due to its experienced personnel behind the production. Other than that, the potential problem that may arise is the conflict of interest. Sam McGuire being one of the executives and has been awarded tendering of acquiring equipments from Company A and yet he is a principal stakeholder in the same company. Moreover , under financial summary, it is evident that the company is seeking almost half of its financial support from a single source. What can happen to company in case it fails to meet the agreement as stipulated in their contract and decides to withdraw his support? This could lead to a major setback to the entire company. It is because the company business plan lacks exit strategy. On the other hand, the three weakest components of the business plan of the Application Technologies Inc. Company include operational strategy, target markets and competition, and investment and return. In the operational phase, the company main goal is to acquire the four licenses for its operations; however, it is not able to have its labeling department within the company. Having labeling department within the company could have helped to produce a complete product without lying on the private labeling company. The private distributor could have given the exclusive right to distribute the completed product, but not to function as one of the departments of the corporation. Other than that, the Application Technologies Inc. is also facing a direct competition R.P. Scherer Company that has sales of almost $ 700 million (Operations Strategy for Application Technologies Inc., 2017). Therefore, it could have been wise thing for company to clearly make a different labeling of its product s being their product offers extra built in application. Being that the product is new; the company should have taken the first step to educate the consumers though advertisement for it to compete with the rest of companies that offers almost same products they produce. Moreover, Ways of Improving the Business Plan The two companies could improve their business plans by not hiding their weaknesses, but instead address them. Most of the investors pick out the potential flaws in the business; therefore, there is need for openness (Card, 2017). It is better for businesses to point out the potential drawbacks and provide an explanation on how the company will overcome them. For example, Relay Plastics has not put in place any exit strategy in case the investors wants to leave the company before the end of the investment contract. On the other hand, Application Technologies Inc. also has not fully explored ways through which the consumers shall know more about their new product and new features. It is also evident that the two companies have outlined their goals but have not factored in the human resource. Defining goals should go in hand with a comprehensive employee-focused management strategy, which makes an integral part of strategic management (Card, 2017). t. It means that a company should analyze the major initiatives and translates them into reasonable and workable goals. Moreover, the two companies should have looked a better way of keeping their customers. The two business plans have not clearly mention the methods they intend to use in keeping the already acquired customers. Therefore, I would be best for them to create a system that they may use for getting and keeping customers for life. Furthermore, it is vital for any business to focus on what it can control. For example, Replay lies heavily on the low cost post-consumer PET bottles from a single company from California without considering an alternative in case there happened to be high competition for the same raw materials. High competition for the same raw materials can lead to higher price of the materials; hence, affecting the production cost (Fox, 2010). It is therefore, vital for Replay Plastics to avoid relying on a single source just for them to be on the safer side as raw materials supply is concerned. It would be essential for Application technologies to improve in their marketing strategy because of the stiff competition they are facing from various companies that produce the same products. Therefore, the company has to make a clear distinct between what they are offering from what others provide for them to succeed by performing thorough consumer education. Challenges and How to overcome them There are various challenges that businesses face. These challenges may include paying the loans, ability to keep customers, the economy, accountability, and increasing customer purchases, handling health insurance, increasing sales and business development among others. Getting customers may be easy but to maintain may prove to be difficult. It is therefore, advisable for a business to build a network that will maintain the invariable ebbs and flows of the business (Syrett Economist Newspaper, 2007). Also acquiring financial support by the larger businesses may not be hard, but hiring employees than can truly help the business to grow is a major challenge. As a result, the company should give its employees a sense of wanting to build and grow with it. It is important that the companies research what their employees want for them to make enough profit that will enable it to pay its loans. Additionally, the business should ensure that their financial projections have catered for any economic instability. The biggest challenge facing businesses to day is awful economy. it is not an easy thing to get new consumers and generate sale when the business and people are not spending. It is the reason why a company needs to make its business different and better for people to benefit from doing business with it than they cannot get from somewhere else. Besides, the businesses that turn out successful are those ones with high performing employees, however, the biggest impediment is lack of accountability (Van der Heijden, Selsky Rami?rez, 2008). Therefore, it is vital for a company to employ with objective and quantifiable goals. The goals they set for themselves define the outcome of what they are expected to achieve. Lessons Learnt The five lessons that have come out clearly from the two business plans include putting audience your first, developing a brief plan, the plan should not be overrated, looking for a strategic location, and having financial projections. Firstly, the two companies have considered their consumers and the investors who are the primary audiences. Therefore, they have written their plans putting in mind their audiences. For example, Replay Plastics have shown that the business is lucrative by providing the evidence from the companies in the Northern that are doing so well. The company has also outlined their financially summary showing the sales amount, profit, and how much an investor will earn after the first year of the business transaction. These projected incomes are meant to attract investors. Replay Plastics also has affordable products that intend to use as the basis of customers attraction. On the other hand, Application Technologies Inc. made sure that their Appli-K pouch was unique and different from the other products offered by other company. They did this to ensure that they get customers and investors. Secondly, the two business plans shows that it is important to prepare a plan that is simple and easy to analyze. It should cover the main points of the business, interesting to read, and show that a lot of consideration was taken through the opportunity (Barrow, 2009). From the two business plans, it is also evident that enough interesting plan attracts investors. Both the plans have attracted external investors because they believed in the goals and the objectives of the business as shown in the plan. The third lesson from Replay Plastics and Application Technologies Inc. is that business plan is a marketing document and should get lenders and investors exited. Although, the intension should be to excite investors and customers, one needs to be careful not to load a business plan with exceptional. It is not advisable to say that the company has the best technology, world-class management team, among others (Holbeche, 2009). Quoting such compliments without supporting facts can take away the credibility of the plan if at all anything goes wrong. This is clear from how the two businesses have described their management teams. The companies have described them as experience but not the best in the world. The fourth lesson is that businesses can sell the same product but still succeed depending on where the business is located. For example, Replay Plastics decided to locate their business in the Western United States to avoid competing with the major companies that offer the same prod uct in the Northern United States. The last lesson is that with the right financial projections that are in line with the companys objectives are in place, the company could determine their cash flow as time goes. With positive cash flow the business could manage to sustain its operations. Competencies Competencies are the integrated skills, judgment, knowledge and attributes the makes people perform their duties as required. Therefore, defining set of competencies for every role in the business will guide workers in knowing the kind behaviors required by the company to help it meet its objectives (Turner, 2001). Some of these competencies that the two companies were to demonstrate include: Sufficient expertise Recruitment and selection of new staff more successfully Evaluation performance more efficiently Identifying skills and competency cracks more successfully Providing more customized professional development and training Planning adequately for succession The extent to which such competencies should have been demonstrated was through the inclusion of the competency framework to the talent management program. Competency framework is developed by collecting and combining competency information. Having competency framework helps in outlining the specific tasks that one need to do to effectively perform their roles (How to Develop a Competency Framework, 2017). It also clearly establishes how their roles are connected to the organizational goals and success. To ensure that the framework is used as required, it is vital to make it relevant to the people who will be using it for them to feel owning it (Tenney Marquis, 2017). For any business to efficiently develop a framework, it needs to consider involving the people doing the work, communicate, and use relevant competencies. To conclude with, it is evident that business plan provides a direction, future vision, Attract financing, attract stakeholders, and manage businesses. Because of th is, it is vital for every company to have a business plan and follow it fully for it to meets its goals. Justification Definition of business plan is in last part of the first paragraph. I have changed the headings as required I have also rephrased the introduction as requested Formatting style is apa 6th edition reference Recommendation is in the second paragraph of competencies References Barrow, C. (2009). Get Backed, Get Big, Get Bought : Plan your start-up with the end in mind. 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