Evaluation Criterion for New Businesses
Section A)
The evaluation criterion should give a clear appreciation for whether the business is likely to yield supernormal profits (Begg and Ward, 2009) from an investment. The 5 key criterion for Cork 'd are; 1. Invest-ability of the entrepreneurs, 2. Differentiated market position, 3. Scope for growth, 4. Ability to attract users, 5. Ability to attract vineyards.
Invest ability of entrepreneurs
In such a specific market, knowledge of the industry, key contacts and a network of vineyards and wine experts is important. The tacit and implicit knowledge (Schmit and Hunter, 1993) of the entrepreneurs is a key asset. This active network needs to be married with a proven ability to manage and grow businesses. Finally, for such a niche industry, the entrepreneurs need to truly believe in the business opportunity and be passionate about it (Chell et al, 1991). This combined with the tenacity to overcome potential failures is important because this is a relatively new e-commerce market.
Differentiated position
Considering the market from a resource partitioning perspective (Caroll, 1995), it already has a few competitors, but is certainly not saturated. However, the 'generalist ' criterion is certainly being cover, and therefore there does need to be a clear unique selling point for Cork 'd to be successful. This could be a generalist USP that has not been adequately exploited yet or something completely new. This USP will lead to a position within the market. This position shouldn 't be too limiting, but it would be advantageous if it was clearly different to the rest of the market. The positioning should be apparent in every aspect of the organisation, such as the brand, copy, imagery and user experience. Ideally the USP and positioning combined will create some competitive protection and create pure barriers to entry, or at least strong impure barriers (Sullivan and Sheffrin, 2003).
Scope for growth
The business must have scope and
The evaluation criterion should give a clear appreciation for whether the business is likely to yield supernormal profits (Begg and Ward, 2009) from an investment. The 5 key criterion for Cork 'd are; 1. Invest-ability of the entrepreneurs, 2. Differentiated market position, 3. Scope for growth, 4. Ability to attract users, 5. Ability to attract vineyards.
Invest ability of entrepreneurs
In such a specific market, knowledge of the industry, key contacts and a network of vineyards and wine experts is important. The tacit and implicit knowledge (Schmit and Hunter, 1993) of the entrepreneurs is a key asset. This active network needs to be married with a proven ability to manage and grow businesses. Finally, for such a niche industry, the entrepreneurs need to truly believe in the business opportunity and be passionate about it (Chell et al, 1991). This combined with the tenacity to overcome potential failures is important because this is a relatively new e-commerce market.
Differentiated position
Considering the market from a resource partitioning perspective (Caroll, 1995), it already has a few competitors, but is certainly not saturated. However, the 'generalist ' criterion is certainly being cover, and therefore there does need to be a clear unique selling point for Cork 'd to be successful. This could be a generalist USP that has not been adequately exploited yet or something completely new. This USP will lead to a position within the market. This position shouldn 't be too limiting, but it would be advantageous if it was clearly different to the rest of the market. The positioning should be apparent in every aspect of the organisation, such as the brand, copy, imagery and user experience. Ideally the USP and positioning combined will create some competitive protection and create pure barriers to entry, or at least strong impure barriers (Sullivan and Sheffrin, 2003).
Scope for growth
The business must have scope and
References: 1. D. Begg and D. Ward (2009), Economics for Business, Third Edition, McGraw-Hill, London 2. Schmidt, F. L., & Hunter, J. E. (1993). Tacit knowledge, practical intelligence, general mental ability, and job knowledge. Current Directions in Psychological Science, 2, 8-9. 3. Chell, E.; Haworth, J. and Brearley, S. (1991) The Entrepreneurial Personality, Concepts, Cases and Categories London: Routledge 4. Carroll, G.R. (1985) 'Concentration and Specialization: Dynamics of Niche Width in Populations of Organizations ' American Journal of Sociology, 90, pp. 1,262-83 5. Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall 6. Thorburn, David and Jenkins, Henry (eds)(2002) Rethinking Media Change, MIT Press, Cambridge, Massachusetts 7. Carl Shapiro and Hal R. Varian (1999). Information Rules. Harvard Business Press. 8. Malcolm Gladwell (2000). The Tipping Point: How Little Things Can Make a Big Difference, Little Brown Atrill, Dr. David, Maclaney, Peter (2010) Accounting and Finance for Non-specialists with MyAccountingLab Prentice Hall 9. Huczynski, A.A & Buchanan, D. A. 2007). Organisational Behaviour. London : Prentice Hall