Question 1: What are some big outside things, like government rules or the economy, that can really change how Apple UK does business?
In startups, there are different sources of risk and uncertainty: markets, technology, teams, capital, and many more. Getting funding to support the business is going to be one of the major obstacles. One must persuade possible investors that, despite the dangers involved, their money would be well spent in this business. In the business of Salesphere.com, five such uncertainties have probably been noticed.
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Inexperienced Team
As mentioned in the case study, the team currently consists of four members ly Leung, Wilfred Lei, Alfred Shang, and Huksun Li. As per the understanding, it is felt that except for Leung, the other three members were not ready for full-time operation. Moreover, all the founders were in their academic phase with no on-field experience. Leung prioritized high university affiliations thinking that this youth business could attract investors. However, for a startup professional experience matters as based on this the entrepreneurs can understand the probable challenges and opportunities in their future business, thus making minimal loss. As opined by Stancil (2014), many think that a startup's prospects of success are significantly increased by experience. Advocates of this perspective cite research such as Aileen Lee's well-known "unicorns" article, which discovered that the majority of billion-dollar businesses were founded by seasoned entrepreneurs.
Capital investment and source of revenue
Getting funding to support the company is going to be one of the main obstacles. Despite the obvious dangers, SaleSphere founders must persuade potential investors that the company is worthwhile. Lueng has planned to get financial investments from investment banks, angel investors, and venture capital funds. Angel investment or bank loans are a viable means for businesses to secure substantial funding without being limited by the conditions associated with obtaining a loan (Lake, 2023). The primary drawback, on the other hand, is that it necessitates giving up some ownership of the business. Although rewards-based crowdfunding provides a solution to that problem, the costs can mount up rapidly.
The online auction concept is not new. The technologies that will be used by this company might already be implemented by the existing companies in Singapore or China. The e-commerce industry is fiercely competitive, and website speed and performance are critical factors. Being ahead of the competition requires more than just having appealing offers and product choices. In addition to these two disincentives, user experience plays a significant role. Innovation with the latest technologies can only help the company to sustain itself.
Doing a startup in Hong Kong may pose some challenges besides unlimited benefits
Figure 1: Challenges
As per 2019 statistics, the above challenges have been witnessed in this country and thus these uncertain events are to be kept in mind while doing business as these issues are quite common in any Asian country (GuidemeHongKong, 2020). However, Hong Kong's tax benefits and capacity to attract investors from all over the world have made it a popular destination for anybody looking to launch an eCommerce firm.
Privacy and security uncertainty of technologies
The platform might need to gather customer and seller data, product details, and finance data. Malware, phishing scams, and data breaches are often encountered risks to data privacy in the e-commerce business (Kuruwitaarachchi et al., 2019). Without creating explicit data privacy rules, training staff members on data privacy issues, and putting robust security measures in place to protect consumer data Salesphere can face uncertainty.
Question 2.1: If a hotel like Glencoe House wants to understand its workers better to help them do a good job, what's one way they could try to do that?
The startup Salesphere.com intends to provide sellers and buyers with a one-stop online platform that can be used for product selling and purchasing with convenience in terms of time and money. However, the product has two identifiable weaknesses which can put the company or the users at risk. The weaknesses are:
Poor team management
To ensure a startup's long-term run/survival, the founders are in charge of putting together a strong staff. As elaborated by Prohorovs, Bistrova, and Ten (2019), it would be easier for the team to address challenges if the members had complementary abilities to one another. However, in this case, only Leung forces himself to take this plan forward, even thinking about replacing the other founders can cause serious consequences. An "Absence of Leadership" situation is the most frequent aftermath of a co-founder's departure from a firm. This can have an impact on the harmony and balance between the other co-founders and the team members. A further circumstance is the increase of equity- and law-related problems.
Online auction companies are vulnerable to fraudulent activities, including money fraud, product misrepresentation, and phony vendors, which can harm the auction house's credibility. There are no security and privacy specifications mentioned for the proposed project.
Logistic plan unclear
In the given case study, there is no clear information regarding the logistics operations. The logistics and supply chain area plays a vital role in such online business. However, with no proper strategy and model, the company may face threats from acquiring new suppliers or sellers.
Opt for a decentralized instead of a centralized model
A single, senior leader or leadership team is usually in charge of strategy planning, goal-setting, budgeting, and talent deployment in centralized companies (Sreeramareddy and Sathyanarayana, 2019). On the other hand, official decision-making authority is shared by several people or groups in decentralized organizations. Leung among the four founders is consistent and hence with a decentralized model, any business decision-making can be problematic and time-consuming.B2C and B2B2C models are to be considered beside B2B or C2C
With only a B2B and C2C model, Shakespeare cannot directly get connected to the buyers. With the C2C model, the company cannot have regulations on quality control with the possibility of fraud and payment issues (Alharbi et al., 2022). Similarly, with B2B there are challenges like a small target market, a protracted decision-making process for purchases, and customer negotiating power.
Purchasing products from manufacturers
Leung's business proposes that he will purchase products from retailers or manufacturers at minimal price or no charge and advertise them on Salesphere.com. However, if any product is not sold then the inventory stock will be overloaded resulting in financial loss.
Question 2.2: What's one thing that Carl's Jr. does really well that helps them stand out from other fast-food places?
In SaleSpehre's business plan, the two business areas that need to be given attention are:
Logistics
There is no proper plan of logistics. Leung planned to hire a few salespeople to visit the SMEs and get pictures of the auctioned and fixed-price selling products. However, he has no estimation of how many people might be required or the costs associated with this operation. As mentioned by Bhalla (2017), it is important that to save money and time Salesphere like Amazon should obtain product photos from the companies who make or distribute the goods they offer for sale. Typically, these producers or suppliers offer high-quality product photos suitable for usage on the website. The following steps are to be maintained while delivering any auctioned product:
order selection and dispatch
Inventory management
Warehouse storage
Shipping/ Transportation, and
Delivery of products
The details of these stages are to be placed strategically to have a smooth supply chain and logistics operation.
Management
There are different areas under operation management such as:
Quality Control and Assurance
Supply Chain Operations Management
Project Operations Management
Service Operations Management
Inventory Operations Management
Allocation and Utilization of Human Resources.
In the case of a Salesphere business, HR management needs to consider recruiting staff. The company should be hiring professionally skilled and experienced workers with practical and real-time knowledge regarding similar business models (Abdalla Hamza et al., 2021). This would help the company do better decision-making, R&D, leadership, organizational culture, operation management, and customer service. With good hiring the other operational management will be swift and effective generating productive performance.
Question 3: What's one possible problem that a new online business like Salesphere.com might face with the people who started it?
The business plan of Leung's online auction site has the potential to make a success rate, however, with the consideration and improvements of the identified weaknesses, uncertainties, and business areas. There are some significant reasons which could attract investors in raising funds for this startup project. The reasons are listed below:
Hong Kong is suitable for Tech business
With its superior infrastructure, pro-business laws, and advantageous location, Hong Kong has been ranked as having the world's freest economy by the "US-based Heritage Foundation" for 25 years running. It is also the best starting point for businesses of all sizes to take advantage of opportunities in mainland China and other parts of Asia. As mentioned by Fintech News HK (2021), Hong Kong's famed spirit of initiative and unlimited energy, in addition to its long-lasting commercial benefits, make it the ideal place to launch a firm. Strong networks of accelerators and incubators, a large pool of seasoned angel investors and venture capitalists, and a friendly startup community connected by many conferences, networking events, and associations all promote the local startup scene. It should not be surprising that Hong Kong is the most vibrant startup destination in Asia; it is home to eight unicorns and an increasing number of companies across a wide range of industries, including fintech, retail technology, health tech, IoT, and smart city technology.
Figure 2: Startup ecosystem in Hong Kong
The number of startups in Hong Kong has increased steadily throughout the years, with a 6% increase expected to reach 3,360 by 2020. This is a 57% increase over 2017, as per the 2020 Startup Survey by InvestHK. Over 10,600 people worked for Hong Kong's tech firms in 116 co-working spaces, incubators, and accelerators (Fintech News HK, 2021). With favorable trade laws, low taxes, robust capital inflow, and globally recognized progressive regulators, the city presents a plethora of lucrative financial services market prospects for both startups and established enterprises. Hong Kong's colleges are a dependable source for employing fresh talent, ranking third overall in the world for computer science along with IT and fourth overall for accounting and finance.
The Hong Kong government is dedicated to assisting startups, and to that end has put in place a variety of policies and programs. These include the "Innovation and Technology Venture Fund", which matches investments made in local startups, and the "Technology Start-up Support Scheme for Universities", which assists tech startups founded by teams of six universities within the region in commercializing their research and development results (Fintech News HK, 2021). Tech companies in Hong Kong benefit from evolving regulatory frameworks that support creativity.
E-commerce business has high business opportunities in the upcoming years
The proposed online auction can serve the service at a global level with a broader scope. Through online auction, both the seller and the bidder can participate in the sale at any time and from any location. Convenience is one of the key advantages of online auctions. Buyers do not need to physically attend the auction; instead, they may peruse the products and place bids from the comfort of their homes. Those with hectic schedules or those who live in remote places may find this very helpful. With growing craze for technologies and online services among the youths and other generations, this system project can be helpful just like Amazon, Flipkart, eBay, and many more.
Figure 3: The growing online auction market
Market Forecast and Analysis for Online Auctions by Product, Platform, and Geography, 2023–2027. From 2022 to 2027, the online auction industry is projected to expand at a compound annual growth rate of 11.35% (Technavio Report, 2022). It is anticipated that the market will grow by $ 2,506.13 million. The simplicity of bidding is one of the main elements propelling the online auction market's expansion. Users may participate in the auction and save money by just logging into the website. Businesses provide films and photos of their goods and commodities on their websites. Prior to engaging in the bidding process, users have the option to investigate the costs and product quality. This aids consumers in comprehending market conditions and making appropriate decisions. Additionally, it facilitates haggling when placing a bid against manufacturers or sellers. Because it removes the profit that agents, brokers, or intermediaries make, bidding is simple and the E-commerce and online auction markets are expected to develop throughout the projected period.
References
Abdalla Hamza, P., Jabbar Othman, B., Gardi, B., Sorguli, S., Mahmood Aziz, H., Ali Ahmed, S., Sabir, B.Y., Burhan Ismael, N., Ali, B.J. and Anwar, G., 2021. Recruitment and selection: The relationship between recruitment and selection with organizational performance. Hamza, PA, Othman, BJ, Gardi, B., Sorguli, S., Aziz, HM, Ahmed, SA, Sabir, BY, Ismael, NB, Ali, BJ, Anwar, G.(2021). Recruitment and Selection: The Relationship between Recruitment and Selection with Organizational Performance.
Alharbi, A., Cantarelli, C. and Brint, A., 2022. Crowd models for last-mile delivery in an emerging economy. Sustainability, 14(3), p.1401.
Bhalla, P., 2017 How Does eCommerce Logistics Work? [Online] Available at: https://www.shiprocket.in/blog/ecommerce-logistics-work/
Fintech News HK, 2021. 6 Reasons Why Hong Kong Is The Ideal Place for Fintech Startups [Online] Available at: https://fintechnews.hk/17151/hong-kong/6-reasons-why-hong-kong-is-the-ideal-place-for-fintech-startups/
Gba.invest, 2021 Hong Kong Startups Survey 2020 [Online] Available at: https://gba.investhk.gov.hk/en/resource-centre/brochures-and-guides/general/hong-kong-startups-survey-2020/index.html
GuidemeHongKong, 2020 5 Steps to Setting up an E-commerce Business in Hong Kong [Online] Available at: https://www.guidemehongkong.com/in-the-news/2020---5-steps-to-setting-up-an-ecommerce-business-in-hk
Kuruwitaarachchi, N., Abeygunawardena, P.K.W., Rupasingha, L. and Udara, S.W.I., 2019. A systematic review of security in electronic commerce-threats and frameworks. Global Journal of Computer Science and Technology, 19(1), pp.33-39.
Lake, R., 2023 Angel Investing vs. Crowdfunding: How to Raise Money for Your Startup? [Online] Available at: https://www.investopedia.com/articles/investing/010416/angel-investing-vs-crowdfunding-how-raise-money-your-startup.asp
Prohorovs, A., Bistrova, J. and Ten, D., 2019. Startup success factors in the capital attraction stage: Founders’ perspective. Journal of east-west business, 25(1), pp.26-51.
Sreeramareddy, C.T. and Sathyanarayana, T., 2019. Decentralized versus centralized governance of health services. The Cochrane Database of Systematic Reviews, 2019(9).
Stancil, B., 2014 Are Experienced Founders Better? [Online] Available at: https://mode.com/blog/are-experienced-founders-better/
Statista, 2019 Key challenges in starting a business in Hong Kong as of 3rd quarter of 2019 [Online] Available at: https://www.statista.com/statistics/1089531/hong-kong-challenges-in-starting-a-business/
Technavio Report, 2022. Online Auction Market by Product, Platform, and Geography - Forecast and Analysis 2023-2027 [Online] Available at: https://www.technavio.com/report/online-auction-market-industry-size-analysis
