BUSINESS PLAN

For the period 2010 to 2015

 

Vision IT Solutions

September 2010, snapshot updated October 2010

– Prima Donna for SME’s

www.companywebsite.com

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Snapshot

VisionIT plans to be one of the vertically diversified reseller and digital application developers across Oman, with growing market presence and penetration in Middle East. The company has recently entered into reseller agreement with VMware for distribution of core virtualization software packages to B2B customer base in Oman. It will offer development and distribution of customised mobile application solutions such as money transfer, browsing, gaming etc. VisionIT plans to venture into proposal writing segment for entrepreneurs to reduce dependency on core business activities i.e. virtualization and mobile application on long-term basis in next 10-18 months.



Mobile application design and development across multi platforms will be the flagship business activity of VisionIT. The company will focus on providing and developing mobile applications such as money transfer, instant messaging, browsing and advertising. The customised solutions development hub will be based in Oman offering cost advantage on long-term basis.

In May 2010, the company signed reseller agreement with largest virtualization software provider i.e. VMware. VisionIT will be henceforth promote and distribute VMWare’s flagship brand “VMware Infrastructure Enterprise” in Oman on licensee basis. The company plans to aggressively expand its footprint as reseller of VMware along with acquisition of mobile application development contracts across Middle East. On long-term basis, it plans to venture into grant proposal writing segment to provide value proposition to end consumers.

The company’s vision is to set up development base in one of the low cost destination such as Oman. It is privately held corporation, with XXXXX controlling 100% of equity (September 2010). VisionIT brand was incepted in January 2010.

In next 4-5 years, the company plans to focus on virtualization and mobile application segments contributing 85% of group revenues on year-on-year basis. On the other hand, the company plans to reduce dependency on Oman marketspace in next 4-5 years and expand Middle East portfolio to minimise market risks and expand Pan Arab World brand equity. The top management plans to expand mobile application and virtualization business segments across home market i.e. Oman along with Pan Arab World such as Bahrain and UAE with international segment constituting 50% of group revenues by 2014. VisionIT is now looking for external investment in the order of US$1 million for enhancing brand penetration, contract acquisition marketing and enhancement of presence in Pan Arab World and Oman for its core business activities i.e. virtualization and mobile application development. The investor is offered 45% in preferred stock for the investment.

Company details

Registered name:               Vision IT Solutions

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EXECUTIVE SUMMARY

VisionIT will position itself as one of the vertically integrated reseller and digital platform supplier for virtualization and mobile application stakeholders in Oman; with operational base in low cost industrial free economic zone such as Sur Industrial Estate. In 2010, the company signed reseller agreement with largest virtualization software provider VMware and penetrated Oman mobile application marketspaces via affiliate partnership program.

VisionIT is currently operating as a privately held company with headquarter based in Oman with development and operational centre at thirteenth leading free economic zone industrial cluster at Sur Industrial Estate. The company currently has one employee and plans to enhance the work count by December 2010. In the initial stage of inception the founder is responsible for the promotional, contract acquisition for mobile application development, reselling supply chain integration for virtualization software of VMware and business development for grant proposal writing contracts. The share capital is solely controlled by the founder “Please Fill In Founders Name”.

The opportunity

VisionIT has potential target marketspace worth US$13.2 million in next 4-5 years (2010-2015). The mobile application design & development along with reselling marketspace of VMware flagship suite “VMware Infrastructure Enterprise” are the core business activities in Oman, Bahrain and UAE. Grant proposal writing will provide gateway into marketing research segment on long-term basis.

Mobile application development and virtualization reselling & distribution segments are highly fragmented with low regional and local penetration in Oman, Bahrain and UAE. There have been negligible presence and volume sales of virtualization software suites in SME’s due to poor local distribution network. VisionIT serves this gap of enhancing VMware’s local penetration across Oman.



On the other hand, mobile application marketspace is fast moving from nascent to growth stage. This will enhance requirement for niche customised mobile application developers and cost effective solution suppliers across the globe. VisionIT with low cost centric development team in free economic zone based in Oman serves this gap. On the other hand, the company can easily serve specific needs and demands of SME’s as compared to large organisations with limited budget for applications (between US$20,000-40,000). Majority of large and medium size mobile application organisations target customer base between US$0.05-0.1 million. There are very small number of solution and service providers in below US$0.05 million mobile application segment majority freelance individual software developers. Thus VisionIT can easily have niche market positioning.

Finally, decline in global IT spending will hamper net margins of niche brand such as VisionIT. Thus, the company plans to venture into grant proposal writing to provide packaged pricing model to entrepreneurs i.e. proposal writing embedded with virtualization software to enhance cost synergise from incorporation.

There is a need to be filled, and the market to be tapped. This gap serves as the entry strategy for SME centric solution provider such as VisionIT.

Organisation Structure

VisionIT plans to grow to 10 member organisation in next 3-5 years (2015). The company will have five member team in Oman managing mobile application development and proposal writing along with virtualization suite marketing professionals for Oman, UAE and Bahrain marketspaces. The proposed organisation structure for 2012-2015 is as follows:



Organisation-Structure

Exit Strategy

Majority of virtualization resellers and mobile application developers are acquired by customer base as support activities. The acquirer will divest non-core activities such as grant proposal writing and retain primary businesses such as virtualization suite and mobile application development. Three exit scenarios for VisionIT and its primary shareholders:

  • Wholly owned subsidiary of mobile application service provider or closest competitors i.e. Softwyre, Sybase, Macronimous etc in Oman or Bahrain.
  • Regional subsidiary of VMware on long-term basis.
  • Merger with similar diversified service portfolio into mobile application and content write up provider centric to market research.

Competition

Mobile application development and virtualization suite reseller marketspaces are highly fragmented. In the virtualization reselling space for VMware the company faces steep competition from existing 49 resellers (2008-2009). Although in grant proposal writing segment VisionIT faces indirect competition from large marketing research organisations such as Kantar Group, Phoenix Marketing International, Service Management Group etc it faces steep competition from freelancers and niche providers such as Benjamin Services Corporation, Abbey Content Services, Abbey Content Services etc. Economies of scale (higher volume sales) and lower operating costs are important for survival in these segments. VisionIT had been late mover in the segment faces steep competition in all the three operational segments:



market-category

Revenue Model

VisionIT will have diversified and differentiated dual revenue model due to vertically integrated business activities. In virtualization marketspace the company will generate revenues via commission from VMware. On the other hand, mobile application development and grant proposal writing will be fixed bid fees oriented revenue mix.

Entry Strategy

VisionIT plans to venture into virtualization software and service segment via reseller agreement with global leader “VMware”. The company will be one of the early resellers of VMware software and service portfolio predominantly in Oman and moving forward expanding to other neighbouring geographies such as Bahrain, UAE etc. On, the other hand, pure play mobile application developer and grant proposal writing service provider is the entry strategy for the company in other two segments. The company will focus predominantly on SME customer base due to need and gap based opportunity analysis.

Proposal

The promoter of VisionIT has fully financed the establishment and initial marketing, business development activities beginning 2011. The company has unique market presence and positioning; due to its vertically diversified business activities along with operations into one of the fastest emerging segments. The company further plans to reduce market risk via brand penetration in other Middle East markets such as Bahrain, UAE etc on long-term basis. Cost synergise based value proposition is provided due to development and distribution activities in Oman.



In order to capture market share and enhance brand equity VisionIT is looking for growth capital. This opens an attractive investment opportunity for the investor community to invest in a fully differentiated business model with a large national and international market potential.

On the broader basis, VisionIT will utilise the external capital funding for the following:

  • Market expansion into other Middle East markets such as UAE and Bahrain for VMware reselling agreements and mobile application development contracts
  • Expansion of grant proposal marketing & advertising budget to improve secondary business activities.

Investment scenarios

  1. Fully invested in accordance with the plan US$1 million with the possibility of a two-phased approach

ORGANISATION AND LEADERSHIP

Top Management Profile

Please put Name, Managing Director and Chairman of the Board

Please put Name of the founder of VisionIT



The VisionIT top management team as of September 2010 comprises of founder and plans to increase to three by end of 2011. The founder has mix of complementary skills and experience, diversity, competence and determination.

Please put Name – Concept and Architecture

In brief: Age –, Nationality – British, Education – PhD in Computer Engineering

He has a total experience of more than eleven years in Marketing & sales and computer hardware and software service. Expert knowledge in project management, product design, data management, and overseeing the regulatory and safety aspects makes him an aggressive entrepreneur. He was actively innovative in designing and developing new products that have resulted in new product applications including mobile and web content management tools. He has a proven record of managing employee performance, assessment and cost analysis, inventive cost savings initiatives and handling management and contacts.

He was Assistant Product Development and application architect with Oman Mobile later moved as Marketing & Sales Manager for Western Territory across Oman. Early in his career he was primarily responsible in introducing product line Green Building Exchange with push towards solar power. He also introduced the system as a kit for modular housing market. He has worked for a year with P & F Distributors as International Sales Manager. He was predominantly responsible in increasing the account base by 80%. He established new markets in Philippines, S. Korea, Nigeria, India and Qatar to improve the company’s market presence. He has a collective work experience of ten years in Caliente Systems, Inc where he started as Production & Operations Manager and moved all the way to Sales & Planning Manager. He managed a team of sales representative to improve the product service sales. He established new markets to the Virtual software application for a small company in USA and the Far East. He also designed and sold a custom solution for the British Ministry of Defence.



He holds a PhD in Computer Engineering from the University of Teesside, Middlesbrough (United Kingdom) and Bachelors from Teesside Polytechnic Middlesbrough (United Kingdom). He has five years of experience as Part time teaching assistant in the University of Teesside, Middlesbrough.

COMPANY BACKGROUND, MISSION & VALUES

Historical Development of VisionIT

VisionIT formation brand idea evolved on offering consumers one stop shopping basket to understand market dynamics and help secure debt financing backed by State of central government (i.e. grant proposal writing), enhance operational efficiency (virtualization software & services) and finally mobile application development (i.e. buzz of the day). The founder of VisionIT started foremost on acquiring reseller agreement for virtualization software and services of market leader “VMWare” with global market share of 78-80% for entire Middle Eastern block.

Post acquisition of reselling agreement, the founder identified most popular mobile application developments and their unique demand in Oman such as mobile adspend, social media and money transfer. Beta version of each of three was development and forwarded to leading customer base such as Oman Mobile etc to enhance word of mouth marketing. Finally, the Chairman enhanced via acquiring human capital for grant proposal writing to lower dependency on core segments.

In 2010, the company aggressively is planning to promote its brand and acquired small mobile application development and grant proposal writing contracts in Oman. To reduce dependency and improvise on early internationalisation the company expanded into Bahrain and UAE for joint venture agreements initially for VMWare virtualization software and services.

Mission & Values

The guidelines for our actions in fulfilling our responsibilities to our customers, our employees, the community and our shareholders lie in our values and mission. The corporate culture of VisionIT is shaped by our values, which we collectively believe in and is reflected in our actions. A clear definition of our values will strengthen our foundation and help us reach our objectives with integrity.

VisionIT’s stipulated mission statement will be

“Virtual mobilising the global marketspace”

In other words; we supply mobile applications and virtualization software and services along with debt financing content writing service portfolio to diverse corporations, which are simple to implement and maintain (cost, customised and end-to-end service).



And we maintain our values of:

  1. Personal Empowerment with responsibility

We trust each other for our capabilities and our devotion towards the organization, and we believe that it’s our responsibility to live up to this respect, given to us by our colleagues. We aim to live up to the trust given to us by our stake holders and we strive to maintain this by being responsible in our actions.

  1. Strive to build valuable and lasting partnerships

We believe that our success lies in developing long term reseller and distribution partnerships and alliances with all our stakeholders. We at VisionIT are dedicated towards developing sustainable relationships that create long term value for the organization.

  1. Cost effective distribution model that create value

We strive for cost benefit solutions that have the potential to create value for all our stakeholders and help us live up to our vision.

Product Strategy & Description

VisionIT business strategy will rest on offering customised and standardised mobile applications, virtualisation software & services and grant proposal content and documentation for diverse customer base across cross segmentation. The stipulated creation of value based content and platforms network is the final goal and is represented in the diagram below.

product-strategy-diagram

VisionIT’s estimated and future product portfolio will be on similar guidelines as mentioned below:



product-portfolio

Competitive Standing (SWOT)

Before we formulate a strategy for our actions in the future, it is essential to review our standing with respect to the market landscape. By comparing VisionIT with the major competing corporations in the target market we have gained much knowledge about their, and our, strengths and weaknesses. This will aid us in the marketing and sales, and distribution penetration areas.

The S.W.O.T analysis of VisionIT service portfolio and business model presented below is a result of our combined understanding of the business case and the competitive landscape, and how this applies to us.

business-model

Growth Strategies

To build a sustainable advantage we need to look at the competitive advantages that VisionIT currently enjoys and build a strategy to make them sustainable in future or transform them into other new sustainable advantages

  • Unique value for money mobile application and virtualization bundled pricing model: VisionIT is the first and the only true service provider in Oman offering virtualization and mobile application platforms. Thus bundling and enhancing recurring revenues will enhance long-term sustainability along with aggressive diversification of customer base (No large customer will contribute substantial revenue mix in near future).
  • Cost Leadership: The unique (low cost country based) mobile application, grant proposal and virtualization solutions will allow VisionIT to penetrate locally and nationally across Oman and other Middle East markets with ease.

Defensive Strategies / Barriers to entry

1. Creating value based propositions: Cost advantage will diminish with time in Oman mobile application and grant proposal segments. Investing further in developing a unique, win-win relationship with IT solution and platform providers along with market research organisations across the globe (mainly into emerging economies) will provide barrier to entry for new entrants.

MARKET STUDY

Integrated cost synergies centric IT solutions & service portfolio

Strategic assessment

VisionIT is operational in one of the fastest emerging and niche marketspaces across Oman (including Middle East) i.e. mobile application and virtualization. The direct target market for the company is worth US$5.5 million in 2010 growing to US$13.2 million in next 3-5 years. The secondary marketspace is grant proposal writing part of marketing research segment worth US$5 million in 2010. Total indirect and direct market opportunity for VisionIT is US$10.5 million in 2009-2010.

Positives

  • The company offers end-to-end packaged cost advantage based IT solution chain i.e. grant proposal writing for new start ups along with provision of virtualization suites in collaboration with market leader “VMware” to reduce operating costs in initial duration of inception.
  • The company has highly vertically diversified revenue model into one of the fastest growing segments such as mobile applications, virtualization (globally enterprises focussing on cost savings) and grant proposal writing (economic recession is followed by entrepreneurial wave).

Risks

  • Breach of reseller agreements with VMware and consumer lawsuits due to failure of grant acquisition in proposal writing segment.
  • Mobile application development and marketing is moderate-high cost acquisition. Decline in demand for mobile application developed by VisionIT will hamper sustainability.

Global Mobile Application Snapshot

Global mobile application market is worth US$4.23 billion, with advertising constituting 5% of total segment in 2008-2009. The growth has been primarily due to aggressive usage and downloads of mobile applications such as money transfer, location based services, search, browsing and health monitoring across advanced economies. On the other hand, smart phone sales stood at 139.2 million, with year-on-year growth of 13.9% in 2008-2009.



The market is stipulated to reach US$16.5 billion, with CAGR of 40.7% (2009-2013). Advertising on mobile applications will contribute 25% of total marketspace by 2013. Apple has dominant market positioning into mobile application retail sales with market share of 99.4% in 2008-2009.

market-share

Oman Mobile Telecommunication Market

In 2010, Oman mobile telecommunication subscriber base stood at 4.63 million with year-on-year growth of 17%. The growth prospects appear to be fairly robust, with MVNOs accounting for a healthy proportion of organic growth, while the network operators focus on moving subscribers to long-term mobile broadband plans where they can. Nevertheless, it is clear that the market is predominantly made up of prepaid customers and, as such, is also thought to include a large number of inactive SIMs. Also, with such a high penetration, there is also likely to be a large multiple SIM base, with some people taking one for home and one for business, and perhaps another solely for internet through a dongle or a smartphone platform.

telecom-market

Oman Mobile Application Market Outlook

Oman mobile application market is worth US$3.5 million with year-on-year growth of 36% in 2009-2010. The growth has been predominantly driven by higher demand from financial institutions and advertising marketspace requirement for mobile application platforms in past 1-2 years (2008-2010). The market is stipulated to reach US$6 million by 2014. Mobile advertising constituted 10% of total application marketspace with free downloads accounting for bulk i.e. 90% of segment across Oman.

On the other hand three leading mobile applications in high demand across Oman are money transfer (predominantly driven by financial institutions), social networking (Facebook, Youtube) and location based services (google maps etc).

oman-mobile-app-market

Global Virtualization Market Snapshot

Global server virtualization software & associated services market is worth US$13.5 billion, with year-on-year growth of 23.8% (2008-2009). Server virtualization software segment contributed 26% (2007: 19.5%) of total in 2009. Server virtualization associate service market will be the fastest growing with CAGR of 16.6% (2007-2012E). In 2012, global market is stipulated to reach US$20.4 billion. VMware is the largest server virtualization software provider worldwide, with market share of 89% (2008: 85%) in 2009. Microsoft is the second biggest with share of 7% in 2008-2009.



global-virtualization

Oman Virtualization Market Snapshot

Oman virtualization market is stipulated to reach US$2 million in 2010. Service segment targeted primarily by VisionIT will be the largest segment accounting for 75% of total marketspace in 2010. Changing business environment post economic downturn in 2008 and 2009, the market demand for higher-level efficiency to remain competitive, regional enterprises are recognising the potential of ‘virtualization’ to streamline the way to manage and utilise IT resources, and by doing so build flexible, scalable and economical infrastructure thus reducing time to market. UAE is largest virtualization marketspace in Middle East.

virtualization-market-uae

Oman Grant Proposal Market Sizing

Oman market research segment stood at US$5 million, with year-on-year growth of 6.2% (2009-2010). The segment witnessed employment base of 315 slightly higher than 2009.The Nielsen Co, Kantar Group and IMS Health Inc are the three largest marketing research organisations across Oman in 2010. There has been aggressive growth in government funded new start ups in Oman post economic downturn in 2008 and 2009. Majority of government funding venture and seed capital organisations require high documentation such as business plan and grant proposal as initial stage of debt financing. VisionIT has indirect competition from large market research organisations such as Kantar Group, Nielsen Co and IMS Health Inc but niche positioning across grant proposal writing marketspace on long-term basis.

oman-market-research

MARKET STRATEGY

Promotion Mix

Advertising

  1. Objective

The objective behind advertising of VisionIT brand across Oman and Middle East is 



  • To enhance regional and local awareness and penetration of mobile application development capabilities and virtualization licensing agreement with world leader VMWare. On the other hand, the advertising based promotional campaign in nascent stage market will improve early move advantage.
  • To develop brand recognition and curiosity to a level that can be combined by direct marketing approaches to create an entry point into the prospective organization.

2. Media Mix

Since VisionIT plans to establish itself as a B2B virtualization software & service re-seller targeting entrepreneurs and knowledge workers in SME’s and large scale corporations; it will be advertised through specialized and industry specific channels. We have identified three distinct media channels for direct advertising of VisionIT solutions mobile application development, virtualization reselling and grant proposal writing end-to-end service portfolio:

  1. Internet yellow pages: Internet yellow pages across the globe are the fastest growing digital medium. In order to enhance brand equity. Pan Arab media market is worth US$6.9 billion with year-on-year growth of 9.2% in 2009-2010. Traditional print media i.e. newspaper & magazine control dominant market share accounting for 57.7% (2007: 62%) of total landscape (2010). Internet advertising market is the fastest emerging across Pan Arab media marketspace, with CAGR of 107% (2007-2010). The internet adspend on regional basis stood at US$0.12 billion stipulated to reach US$0.27 billion by 2013. As internet adspend is the fastest growing, VisionIT Solutions will be promoted via stipulated platform such as Jeeran to enhance awareness and improve return on investment.
  2. B2B publishing & trade exhibitions: B2B publishing is core for targeting SME’s which are primary customer base for VisionIT’s markets mobile application development and grant proposal writing service portfolio. Globally, B2B publishing adspend US$47 billion stipulated to reach US$50 billion by 2014. The top management executives will attend trade exhibitions and promote the VisionIT brand across ANGLER @ GITEX 2010 Trade Show in Dubai and Mobile Apps World Europe 2010 Show in Oman. These trade shows normally enhance local and regional penetration with high volume of attendance from SME corporations seeking unique mobile applications and web based IT solutions. In future IT based business meets could be targeted to increase reliability and ROI on marketing.
  3. Direct Mailing (DM): DM will be used as a tool to maintain our existing contacts over time and keep them in touch with VisionIT’s new key developments and press releases. Example: VisionIT development of mobile game in action genre will be forwarded as update to all prospective (active & passive leads) will enhance chances of the same being purchased in another region. This provides high recurring revenues via optimisation of knowledge base. We will also run periodic DM campaigns for the brand to fuel our marketing efforts.

The indirect advertising channel is equally crucial to the media mix for VisionIT. This will be in the form of press releases at appropriate times and if possible in the form of articles in business newspapers.



3. Message

The marketing message that will be promoted during our various efforts will be centred on some key differentiating factors of VisionIT business segments as compared with closest competitors will be

  • Dream SME value network
  • One-stop packaged shopping basket offering grant proposal writing, mobile application and virtualization for entrepreneurs.

The VisionIT punch lines for the purpose of marketing is

“Changing the face of the internet & mobile landscape”

“Changing the face of the internet landscape one stop service portfolio at a time”

Direct/Personal Selling

Backed by advertising campaigns, direct selling and understanding new trends and cognition of domestic and overseas entrepreneurs (segment with largest number of businesses registered in a single fiscal year) will play the most important role in converting a prospect into a real client.

Through in-house sales force

In the short term, VisionIT will rely on its own sales personnel to contact potential clients and generate sales. This is due to stringent cost implications for new start-ups in market research and moderate capital intensive industry. The sales force will initially only sell in Oman and Bahrain via leads generated by existing customer base and top management personal contacts. A major part of our marketing expenditure will be directed towards training and deploying a small but effective sales force.

Through value added affiliate partnerships

Direct sales will be supported by a small network of value added affiliate partners, consisting of consultants, independent business individuals and support companies in the realm of the mobile application and reselling space across Oman and Bahrain. This will allow the brand to divert more resources towards market expansion and fuel a faster growth. The affiliate partner commission offered is 10% on each mobile application and virtualization contract based sales.

Revenue Model

VisionIT’s revenue model rests on commission and contract based sales of virtualization software & services, mobile application and grant proposal writing bids to B2B customer base across Middle East. The company has dual revenue streams i.e. commission from VmWare virtualization software and services and flat bidding for customised contracts of mobile application and grant proposal writing for SME’s in Oman and Middle East. In 2010, the company will aggressively expand virtualization reselling and mobile application services into Bahrain and UAE initially. Hence forth the revenue model will be diversified on market basis.

Unique Value to Shareholders

For Every Benefit You Receive a Tax is Levied (Ralph Waldo Emerson).



This seems wrong in the case of VisionIT. The company will be based in Oman in special economic zone; with tax exemption till 2014 i.e. free tax zone. Sur Industrial Estate will serve as the cost structure (i.e. research and value creation) and goods will be sold in the registrar (Oman) and cost generator hub (Oman). Thus low lead delivery time and high customer service assurance. This will create higher shareholder value; without taxation. The average net profit margins industry wide stood at 10-15%; with VisionIT giving stable returns at more than 30% (2010-2015)-Please refer the next section for financial statements.

FINANCIALS

Table A: Income Statement (2010-2015)

financial-chart

Table B: Balance Sheet (2010-2015)

balance-sheet

Table C: Cashflow Forecast (2010-2015)

cashflow-forecast



Chart A: Revenue & Growth Statistics (2010-2015)

revenue-forecast

Chart B: Average revenue per employee (2010-2015)

revenue-per-employee