Research Methodology
What Is The Efficiency In Cloud Computing Environment?
Semantic Software is a company based in Australia that deals with research on software and development and the company focuses on Artificial intelligence technologies. The company was established in 2008 and can be categorized as a Small and Medium Enterprise. It is the leading company in Australia in semantic technology and seeks to grow and expand to the international scene. Semantics is a language used in programming while Artificial Intelligence is intelligence installed in machines (Kasemsap, 2017). The level of intelligence installed in machines cannot reach that of the human brain but the machine makes up by quantity since it is installed with all categories of knowledge unlike a human being who s restricted to one specialty or a handful. The company service involves developing search engines on the web to comply with the user’s answers or feedback also known as artificial intelligence since the web is only using metadata to place information into its correct context. The company’s products are storing and retrieving mega data for large firms. The main market target for Semantic Software is the Medical industry, e-commerce, intelligence security agencies and the financial industry in countries which are well endowed with technology and use of internet. It also seeks help customers retrieve large amounts of data stored online. Its main focus is on e-commerce where buyers and sellers transact online. Customers who shop online give a description of commodity they want to buy and the search engine will give an outcome of what the customer is expecting. The medical industry is growing and is also known as digital doctor involves patients asking question or giving symptoms of their disease and the web has a mega data which places the question in its context which is predetermined by being analyzed in a mega data storage and then matched against a knowledge graph which then gives an automated answer to the question. There is also synchronization of patient information by the doctor and other medical personnel for easy retrieval and quick diagnosis of the patient’s history. The company will also focus on the intelligence community where individuals’ profile can be accessed all at once like their social media account and criminal records. Semantic Software seeks to enter the international market thus it has to have a market strategy. Market strategy is the method that a company intends to use to distribute its products to the targeted market by establishing contacts in the targeted country and making the targeted market aware of the product to be offered. The literature will explore how to come up with the international business plan (Johnson, 2016). The primary entry strategy to be used will be direct exporting. That is; the company will use its own resources to sell its services directly to the targeted market. Then, the company will hire agents to represent the company’s interest thus their choice should be considered carefully since they will be the face of the company in the country they are hired to represent. In this case the country of choice is USA.
Situational Analysis
This refers the method of research used to come up with the marketing entry strategy and main target market internationally. The method of research could either be qualitative or quantitative. The method used was quantitative research since the method used to collect raw data was via online questionnaires and surveys as it less expensive and more comprehensive in this situation. Quantitative research involves statistical measurement of the raw data using statistical tools to draw conclusions. The tools to be use are descriptive statistics to analyze data from samples and inferential statistics to analyze data from random variations such as sampling. (Keusch, 2015).
This is how companies do their analysis in their internal and external environment to help evaluate their customers, their capabilities and their business environment. Internal environment also known as macro environment is factors that affect the company from within and the company has control over but external environment (micro environment) involve factors that affect the company from outside and normally the company has little control over. Examples of external environment include government policies, change in technology or competition.
This involves the process via which a company conducts a deep or thorough analysis of itself to gain details of its past performances and future expectations. Here, Semantic Software puts into consideration its past performance and also incorporates their missions, values and goals both present and in the future. After putting all this in a report we are able to know the Semantic Software’s health(Teigeler & Hahne, 2014). . There are three types of analysis in company analysis namely; internal, external and ratio analysis. Internal and ratio analysis will be used by Semantic Software to gain insight into gaining market share and evaluate the company’s financial status to gauge the companies past and future performance. External analysis will be done on rival firms to gain knowledge on their SWOT and improve where necessary and take advantage of their weakness.
This involves the evaluation of the market Semantic Software seeks to penetrate in a bid to gain insight of the markets’ dynamics and reason for its attractiveness. It involves qualitative and quantitative evaluation of the USA market. It looks at competition, customer buying patterns, market size (number of consumers of the service), quantity of sales volume and requirements for entry into the market and barriers restricting entry. Since the company will be offering similar services to its rivals, it has to look into product differentiation so at to make their products look more attractive. Market analysis includes the following:
- Political environment
Company Analysis
In the international business plan, political environment refers to activities the foreign government (in this case USA) undertakes that may positively influence or hinder business operations in their country of jurisdiction. USA is a free economy and therefore this means that there is minimal or no political interference in their business environment and that the economy is mostly influenced by the laws of demand and supply. Also, it USA have policies that encourage Foreign Direct Investment therefore there are minimal restrictions for entry of foreign companies into the American market. The USA also enjoys a stable political environment meaning that there will be no interruption in the businesses or insecurity for their assets and employees.
- Regulatory environment
These are rules and regulations that are set by the authorities that govern how businesses are to be conducted. In the USA, since it is a federal state, rules and regulations pertaining to business operations are governed differently since it constitutes of 50 States and each State has its own laws governing the regulation of businesses in their particular areas jurisdiction. Semantics Software has to review all the fifty states and see which states are feasible to establish their business and which are not(Cai,et al ,2014)..
- Economic environment
In this case, Semantic Software will focus on current and future trends and conditions. The USA GDP has been expanding thanks to tax cuts and increased government spending. This means there is more disposable income in the hands of the public. Inflation is also very low meaning the prices of commodities is relatively cheaper making them more affordable to wide range of potential customers (Teigeler & Hahne, 2014). Also there has been a rampant increase in the use of internet and e-business meaning that the consumers have confidence in the e-business platform. Also, online payment services like PayPal have been on the rise meaning that that there is a lot of on line business happening. This means it is safe to invest in the country.
- Social and cultural environment
These are set of behaviors and norms that exist in a given population. The values and attitudes of American consumers fluctuates very often meaning tastes and preferences change quite often. That is to mean the Semantic Software Company must always be updated with what is trending so as to enable it adapt to the changing trends it if the business is to stay relevant.
- Demographic environment
These are trends that can be used to identify the consumer preference and buying behaviors so as to identify the target market group. In the USA women tend to spent much on e-commerce with 58% than men who account for 42% of overall online shopping. The age group of men focused on e-commerce ranges from 18 years to 34 years and they do most of their shopping online. On the hand, men tend to be more price conscious than women. The company needs to come up with a balance to in exploring the two genders to the maximum.
- Technological environment
Market Analysis
Technology is an art that requires application of science. Technological environment are ways in which products are upgraded to match what is trending so that they cannot be obsolete with the rapid evolving and advancement of technology. USA is a country well endowed with technology and it keeps on advancing frequently thus the Semantic Software Company has to be on their toes with regards to technology. Also, since this is a software company and given the rise of cyber crime in the USA it has to be upgraded frequently with top tier security measures to enhance the security of both the potential customers and the Semantic Software Company.
- Physical environment
These are infrastructural indicators that affect and support a business. They may be referred to as touchable and non touchable materials around a business which include land, air and buildings. It should be noted that a healthy and clean environment is crucial for the well being of the people around it. With regards to this, the USA has adequate infrastructure which meet world standards to support the business. The physical environment includes network connection which is crucial to the company and in USA it is very strong. This also means that their employees are able to access world class services like housing and transport network thus making them more productive.
Extent of the market is directly proportional to the nature of demand in the given market. The extent of the market usually depends on the nature of the commodity, that is; whether the product is perishable or non perishable. Since Semantic Software is to offer services based on technology which in non perishable since it is a service that is regularly updated, then the extent of the market is huge. Since the Semantic Software tend to focus on the bio-medical industry which entails online diagnosis of a patient’s symptoms and prescription, it has found responses from questionnaire that the product is in demand due to the distance, expenses and time involved in visiting hospitals for medical care that can be deemed as not quite critical and doesn’t need the attention of a doctor.
All business passes through four main stages as elaborated below:
- Introduction stage – this is where the company launches a new a product in the market and it could be the most expensive. Semantic Software is in this stage of product life cycle.
- Growth stage – here, the company has started its operations and its main trait is recording of sales and profits (Stark,2015).
- Maturity stage – at this stage, the company is already well established in the market and is has a goal of maintain the share of market it holds (Liao,et al, 2015). Here competition is stiff and is characterized by vigorous advertisement and product differentiation.
- Decline stage – here, the market is shrinking due to factors such as entry of new players in the market.
Semantic Software has to take into consideration of all this stages so as to have counter measure for each of the stages.
It involves looking at the wider business environmental (micro environment)factors also known as PEST analysis that affect a business and that the business has little or no control over for which include:
- Political – this include factors such as government policies which include taxation and interference in private business. Factors such as elections dates and government regulation on corporate policies (Cai,et al ,2014).
- Economic factors and this include rates of inflation, level of unemployment and stability of the foreign country’s currency among others.
- Social – cultural – this are factors such as the population growth rate, taboos and lifestyles of the potential customers that may influence the way of business of the company.
- Technological factors which include new technologies emerging or being used by rival companies.
Political Environment
It is very important to consider the PEST analysis as it helps the company identify business opportunities that may fail to materialize due to reasons which are beyond control of the company. A PEST analysis should help the company come up with measures which it will put into place to try and navigate these external forces that affect their business.(Ho,2014).
Competitors are business rivals who offer the same services as Semantic Software. It is critical to monitor their activities so as not to lose clients to them. The more the similarity in the products offered, the stiffer the competition will be. In a free market like the USA competition may be perfect, oligopolistic, monopolistic or monopoly. In this situation, the completion is monopolistic since the rival firms offer similar products that are differentiated but serve the same purpose.
Semantic software operates in the Information Technology software industry particularly dealing with artificial intelligence. It involves feeding a computer with information and with the data already installed in it, the computer will “think” and through its search engines, the computer will filter the information providedand will give you a particular answer to the question asked. Via regular updating, the computer can be said to be “learning” to adjust to new needs and changing trends. The industry is particularly important to the medical industry in synchronizing patient information, intelligence community in profiling people, finance industry in integration of data and adding meaning to it without any human interception. Semantic Software main competitors in the USA include, Cambridge Semantics, IBM Watson, Amazon and theGoogle and Yahoo.
The huge and main advantage of Semantic Software is that it is an already well established company dealing in semantics and is currently leader Australia in artificial intelligence technology. It also has a large capacity in its servers to accommodate many users without delays. Also, it search engines are advanced and filter data to give only what is relevant to the client. The company seeks to make a breakthrough in the bio-medical industry where patients will not have to go to hospital for diagnosis but instead will get a detailed prescription and diagnosis from Semantic Soft ware.
Following the response of questionnaires from potential customers, they view the product in a positive way especially due to the bio-medical product (“digital doctor”) which will be a huge breakthrough.
SWOT analysis basically stands for the strengths, weaknesses, opportunities and threats of a business enterprise. Strengths and weaknesses are micro while opportunities and threats are macro.(Bull, et al 2016)
- Strengths
- It has a strong and unique product image which is also has patent rights.
- It has a potential to accommodate many clients since it seeks to grow.
- It work force is well trained and thus their productivity is quite high so is their quality of work and dependability.
- Weakness
- The company depends on internet to provide its services thus it depends on other companies for it to operate. Its users also need internet, connectivity to access their products and thus cannot expand its services to third world countries or areas where internet connectivity is inaccessible. This is the biggest challenge it faces in a bid to expand to the international horizon since it limits it market size.
- Its physical presence is only limited in Australia which mean as it want to expand internationally it will have to set up physical structures which will be quite expensive.
- Opportunities
- Given the large population in the USA which is well adept in technology, this can be seen as opportunity to tap into the market.
- Most companies have not fully implemented an online platform for medical diagnosis and prescription and with this being the its main entry product for Semantic Software which is also quite refined, this can be seen as an opportunity.
- There are also a lot of software firms willing to partner with us this way the company can cost share on expenses and also share recourses.
- Threats
- Its competitors are quite acquitted to the needs USA market since they have operated here for many years successfully.
- The competitors like are well endowed with resources since it is a blue chip company and this is a major threat.
Regulations and Laws
Semantic Software strengths shows it is well endowed with strengths and capitalizing on it would mean that it would penetrate the market successfully. Its notable main weakness is physical presence hence it would be advisable to consider partnering with another well established company in the USA so at to cut on the costs of opening a physical enterprise wholly and they can also share resources. The major opportunity is the that USA has a large population that is quite proficient with technology and due to the high cost of health in USA, the “digital doctor” will be a great success if implemented correctly. Its major threat is stiff competition and the solution to this problem is matching the rival companies’ strengths and capitalizing on their weaknesses.
This is what the company wishes to accomplish both in the short and long terms.
Following the SWOT analysis, the company has identified opportunities it can exploit in the international market and after evaluation of their strengths, the company has deemed itself viable to compete in the international market and have a share of it. The following are its objectives:
- Be recognized as a world class company in semantics by offering products and services that are unmatched by any other.
- Having a lion’s share of the semantic or artificial intelligence in the international market thereby amassing as many customers as possible which leads to increased profits.
- Create employment opportunities for the many unemployed educated youth and exploring their untapped talent and put it to good use where both parties will benefit.
- Through its bio-medical product (“digital doctor”), it seeks to partner with medical experts to take health care to the next level by making it digital.
- Giving back to communities by coming up with social welfare projects to aid the community. This will also be a form of advertising.
- Create an approach that will lead to the development of international e-commerce and improved telecommunications and information services.
- Coming up with tools that are capable of improving the quality, dissemination, productivity and efficiency of research.
- Winning an award for being the best company internationally.
Since Semantic Software is a national company based in Australia, it has not yet made a breakthrough in the international market as for now thereby it doesn’t have a share in foreign countries but it dominates the home markets in Australia and has the lion’s share.
These are the market objectives of Semantic Software:
- Create awareness of the company and its products and to reach to as many people as possible.
- Educating potential customers on how to use and access our products especially the bio-medical product which could be somehow tricky to use.
- Providing tailor made services to different markets with different needs and improving our services in accordance to customer feedback via the company’s dedicated customer care team.
- Differentiating our products to stand out from the rest since the company offers similar products with those of rival companies.
- Convincing the customer that the company’s products are superior and second to none other and also encouraging them to explore the company’s products.
- Expanding the company’s products to area that have not been exploited before.
- Acclimate to changing market trends so as to keep up with changing market trends.
This is the game plan intended to be used to attract potential customers to use the company’s products.
This can be divided into five segments namely; demographic, behavior, benefit, geographical and psychographic. The following subdivisions are discussed as follows:
- Demographic segmentation
With regards to semantics, this is dividing a market according to income, education, gender and age. Income will be important so as to know how to harmonize prices so as to favor all brackets of incomes. The company will also consider the level of education which will aid on the kind of answers to give from search findings and the level of technicality to use that will be easily understandable to all users will varying levels of education(Tomczak, Reinecke, & Kuss,2018).. As discussed earlier, females tend to spend more in online shopping and for age there is a particular age that uses internet intensely and this enables us to target them.
- Behavior segmentation
This is group of customers based on their behavior patterns traits when making purchases. Here, the company will evaluate the potential customers’ attitude towards our product and this will achieved by posing questions in the form of questionnaires. Their attitude towards the product will affect their patterns of spending with regards to the product. If they have a good attitude, they will spend more and if they have a bad attitude, they will spend less on the product. This will help access the target group where advertising will be directed and come up with measures to curb bad attitude.
- Benefit segmentation
Current Trends and Conditions
This is dividing the market based upon the level of value that the potential customers attach to the products of Semantic Software. It can be based upon quality of products, customer care services, performance among other. This will help the company know its flaws and the areas to improve on.
- Geographical segmentation
This is categorizing customers with regards to their area of location. Different clients have differing needs with regards to where they are located. This will be crucial to consider since the Semantic Software seeks to serve a wide range of customers from diverse locations.
- Psychographic segmentation
This is dividing the market into the potential customers’ lifestyles, personal traits and interests. This will be insightful when engaging the product design and the manner of marketing.
This refers to the place a product occupies in the consumers’ mind and how they different it with similar products from those of the company’s rivals. This will help to create a product image that will help identify how best to create a positive image of the product in the consumers mind.
This is forecast method that will be used to deliver or distribute products to a new target market. In entering overseas market, entry strategy may differ with the degree of risk involved. In the case of Semantic Software, the strategy to be used is direct exporting and it involves the company selling its products directly in the USA since it is the targeted market. In this scenario of market entry, there are intermediaries involved and the company is in direct contact with the clients.(Leih& Teece,2014)
Marketing mix is a set manageable and shrewd tools that a firm uses to get to their set goals and expected responses from their potential market and clients. Marketing mix is crucial as it multiplies a firm’s profits.
There are several marketing strategy mix but in this case Semantic Software will use price, product, promotion and place commonly known as the 4P’s of marketing. The following is a brief elaboration of the 4 P’s:
To come up with a product branding strategy, the company has to first identify which services it will sell to the potential consumers. The products are software services that are intangible and since they will be similar to other products in the market, they will be highly differentiated to convince the potential customers that we offer superior products from the rest. It is crucial to understand this so as to make the product more marketable.
Consumer Behavior and Attitudes
The company has to find a location that is convenient to both the customer and the business. In this case, the location will be an online platform. Factors that will influence location are security especially given the high rate of cyber crimes and the site should be attractive among others. This helps turn potential customers to actual customers.
Once we have made an elaborate decision on the products to be offered which will match the market needs, the product branding strategy and distribution strategy, we will now look at the prices to be set. Price is very important since it will affect demand and profitability ratio. Also same product may have varying prices due to the services accompanying them. We will compare the price other rival companies charge for the same products and come up with a price that can compete with them favorably both for the potential customer and the Semantic Software Company. Also, the company will put the perceived value of our product into consideration and the information will be gained from interaction with the potentialcustomers (Johnson, 2016).Also the company should take into consideration that USA is a free market and the law of demand and supply also dictates the price of commodities.
This is the final P of the 4Ps in the market mixing strategy. After setting a price, the next step is promotion which entails making the customers aware of the products we will offer and the prices set for them. Methods of promotion will depend on the targeted market and they include social media, newspaper adverts and billboards among others. Since this a monopolistic market, advertising will be done vigorously and a lot of resources which include financial and manpower obligations will be deployed to achieve this successfully (Utaka, 2015).
A budget is a tool that seeks to show the financial plan over time for a business organization.
Planning assumption involves estimating the amount to be expected from sales and that that will be incurred as the cost of doing business in order to achieve the projected profits. The planning should be done with regards to the dollar since USA is the targeted market and it uses the dollar as currency. The company assumed the following:
- The value of the dollar will not change or fluctuate much.
- There will be no extra expenses incurred rather the ones projected.
- Customers’ will respond positively to the company’s products thus achieving the projected sales.
- Market conditions will not change from our analyzed market.
The revenue forecasted in terms of sales of the company’s product is expected to be $ 10.2 million. This is a lucrative industry and our products are in high demand and that is how we come up with the projected value of sales.
The forecast of expenditure will be as follows:
- Market share – in the first year, we anticipate to have a market share of about 15% which translates to the $ 10.2 million.
- The initial capital to be invested will be $ 5.0 million.
- Advertising will be $ 2.5 million since advertising will be vigorous.
- Operating costs (which included wages and salaries, miscellaneous expenses and all other expenses) will amount to $ 2.0 million.
Total expenditure will amount to $ 9.5 million dollars.
The overall budget will be as follows:
Dr($) Cr($)
Capital 5,000,000
Sales 10,20,000
Advertising 2,500,000
Operational costs 1,200,000
Other expenses 800,000
Net profit 700,000
The company is expected to make a profit of $ 0.7 million.
Breakeven point for a service business is where revenue is equal to cost (T.R.=T.C.). Clearly the business has broken even as it has made a profit.
This is a plan used to guide on the execution, monitoring and control of the project. Recommendations will be drawn from what was learnt and this will come in handy to give the an idea of what perceived as weak more attention to come up with measures to curb them. The recommendations will also what is positive in the business plan or alternatives suggested.
An action plan is a document that entails all the necessary steps to be undertaken to accomplish a certain goal. Its main purpose is to elaborate clearly what is requires to attain the set goal within the projected timeline advocated for the project an which specific tasks need to be completed to achieve this and the amount and value of input required. Therefore, monitoring of the action plan refers to evaluation of the success of the details contained in the action plan (Tao, et al 2015).
Conclusion
The business if implemented as planned will lead to a net profit of $ 0.7 million meaning that the business will be able to break-even as per the projection. The means the business idea is viable. However, the business made some assumption in the hope that nothing will change Certeris Paribus hence the company has to come up with counter measures in case of any changes. Of note is the introduction of the bio-medical product which is expected to be the entry product and most of the projected sales will be based on the product. In the budget, all unnecessary cost has been avoided (Meyssonnier,2015).. To cut on cost the business should also evaluate the idea of partnering with a well established company in the states and some have already approached Semantic Software for this. Medium of advertising and methods used to differentiate the company’s products should be chosen carefully since this is what will be the game changer as the products produced will be similar. If the business plan is followed and implemented to the dot, then the company is expected to make a strong food hold in the USA in the IT Industry with specialization on semantics and artificial intelligence. Evaluation of the business will be done after a fiscal year of its establishment although quarterly statement will have to be provided to monitor progress carefully.
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