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Businesses that are always innovating have the highest chance of success. Technology has aided in the establishment of competitive businesses. Our company concept is based on one of the most recent developments, bitcoins. The aim is to promote bitcoin's potential to act as a payment system in order to improve both financial inclusion and consumer comfort. Our idea is to increase client comfort by reducing the hassles that clients face when paying for goods using traditional methods of payment.
A bitcoin is a kind of cryptocurrency that functions as a decentralized global payment mechanism. A bitcoin operation is a signed piece of data broadcasted to the network that, if valid, becomes a part of the blockchain. Thus, bitcoins transactions can aid in the transmission of ownership of an amount of bitcoin to a different address in exchange for considerations. Like any other currency, cryptocurrencies can be applied in trade transactions where accepted.
In an attempt to increase the effectiveness of bitcoins, this startup will use a bitspay app that is to be made available on smartphones. The only requirement that users will need is an active internet connection or a Wifi connection in the case of restaurants and supermarkets that want to support clients. The availability of the app to virtually everyone who has a smartphone or appropriate personal computer systems increases the range of clients that can be served. The idea is to help people shop for products and services from virtually any location at any time of the day, be it in the physical premises or on online commercial sites such as Alibaba and Amazon.
We project that retailers in those nations where bitcoin transactions are not restricted will accept the idea widely. Some countries, however, such as China, will be resistant to the business due to their blacklisting of bitcoins as a mode of legal payment. The retailer who accepts this system will benefit since the sender is the one who pays the processing fees meaning that the trader pays nothing to receive the payment. Also, it allows retailers to exchange money across the world without the usual statutory and bank-imposed restrictions. Finally, large disbursements can be made without capping.
We also project that people will accept the system since the uptake of bitcoins, which is not possible to manipulate than conventional currencies, is on a sharp rise. Besides buyers are allowed to make confirmations within 10 minutes before paying, which lessens the possibility of making mistakes. Additionally, storage of coins is not challenged, and purchase can be made across the globe without the concerns of currency conversions.
Further, our application allows bitcoin holders to access powerful options for spending, buying, and selling bitcoins. Using a BitPay Card that will be accepted by all Visa certified merchants, holders would obtain a wide range of commodities across the world. Besides, our planned mergers of payment systems with mega online payment platforms will allow holders to obtain commodities and pay for them from any place at any time.
The bitcoin transaction business falls under the financial payment service industry since these transactions are supposed to serve the same function as credit cards, debit cards, and mobile payment platforms. According to a report by the Bank for International Settlements, VISA payment system continues to dominate both the US and international markets connecting local and international banks and enabling point of sale payment mechanism. Similarly, the uptake of mobile money payment approaches continues to gain acceptance in the Western nations led by Apple Mobile payment system in the USA. In the US alone, the transactions involving mobile money payment amounted to US$ 55.018 million in 2017, and the amount is expected to grow significantly (Statista 2017). Nonetheless, the use of bitcoins is rising sharply both locally and globally. The level of bitcoin industry investment was placed at $474 million in 2015, which was commendable figure given that in 2011 it was a mere $3 million (Marinoff 2017). Growth is still being noted as time goes by and estimates place the current figure at $1 billion. Besides, as more nations open up their markets to international trade, more of the bitcoin transactions will appear on the global scale helping grow the startup.
Threat of New Entrants
One of the most notable threats to actualizing the business idea is the threat of new entrants. The market is new and growing at a rapid pace, which gives entrepreneurs the incentive to delve into the market and exploit opportunities. Already companies such as Google that have defined prepaid card systems are preparing their versions of bitpay platforms that will compete directly with our services. Moreover, we face the challenge of foreign companies from the highly competitive international markets such as Japan and China. Nonetheless, we expect to benefit from the advantage of early entry that may see us secure a significant market share.
Our objective is to compete using differentiation to protect our market share. In particular, the challenge is that barriers to entry into the market are low. All that is needed is the financial leverage to develop software versions that run on smart devices and enough influence to attract the attention and participation of local and national retailers. Most of these resources are readily available to large corporations have an easy access to the much needed resources. Nonetheless, what can sustain a business in the industry is the ability to continuously meet or exceed customer expectations, which I believe we are good in doing. We plan to ensure that we have adequately differentiated products and ensure proper penetration and adoption of the bitpay platform such that people cannot ignore the service. We intend on creating broad and inclusive partnerships programs that will see us create tangible relations with both the local and national retailers.
Overall, the financial payment service industry is growing. Also, the advantages posed by bitcoin payment system will continue to grow their market share. There is, however, the threat of new entrants that we intend on addressing by competing through service differentiation and locking our relations using partnerships.
Advantages and Challenges of Innovating
Innovation is at the center of survival in business. Competition is ever becoming complex and intense in the 21st Century, and only those businesses that innovate can be guaranteed to exist. The advent of computers and technologies has led to short product development cycles that keep companies on their toes to counter competition by persistently offering a commodity that beats the market competition. No business is spared of this requirement, be it a small entrepreneur or a multinational corporation. Being creative and open-minded is essential to all types of businesses. Nonetheless, the benefits and challenges faced by the small and large businesses in innovating are unique to each of them. The ensuing paper looks at the issue of innovation and how it differs across small and large businesses from the perspective of some of the most important factors that determine ability the firm’s ability to devise new products and services. Moreover, for the sake of illustration, the paper will use Apple Inc. to represent the large corporations and Nowait Inc., to represent a budding small business. The latter is a startup that allows people to line at restaurants without leaving the comfort of their houses.
Innovation is the application of better solutions that fulfill or meet new requirements, existing market needs or unarticulated needs. Business innovation is often seen from the perspective of creating new products and services or improving the delivery or quality of these commodities. In economics and business, innovation is seen as a catalyst for growth and development in businesses, organizations, or nation-states. Often, innovation offers the inventing party a competitive advantage in meeting and satisfying market needs (Branstetter, Fisman and Foley 2006, p.329). Apple Inc. has been credited with spectacular innovations that have since shaped the smart phone markets helping thousands of clients to resolve their communication needs. Specifically, Apple's iOS continues to serve a market base that is not satisfied with Android OS system, as the former has been touted as being more challenging to destroy with virus programs. Nowait inc., too, has been instrumental in lessening the physical hassles that clients in the US have to go through to access meals and services at the restaurants. The two, however, differ in the way that they benefit or lose when it comes to innovating. In a typical organization, the responsibility of coming up with new or improved products or services rests with the CEO who in turn works through a dedicated Research and Development team for the case of large companies or through his workers in the case of a small business.
Survival and Growth
Both Apple and Nowait need innovation to survive and grow. While having winning products is good and commendable, failing to innovate products and services to reflect new challenges can erode one’s competitiveness. Apple faces stiff competition across all classes of its products from the Android-based electronic firms making the possibility of relaxing its rate of innovation a potential danger to its survival. Also, the company has financial obligations to fulfill as well as growth promises made by shareholders regarding investment rate of return. Besides, the stock market favors those businesses with a positive future. The prices of Apple stocks are influenced by expectations of future profits and sales, which arise from innovating the underlying company. The same case applies to Nowait. Despite being a small startup, the business is located in a competitive industry where the threat of new entrants is substantially high. The startup also needs growth to become more stable and secure a sizable market share. In particular, growing bigger can help Nowait benefit through economies of scale. Thus, innovation is essential across all sizes of business to ensure existence and development.
Financial ability is an important factor in innovation. While inventions can be costless, implementing these new processes, ideas, schemes, or commodities in a successful way requires capital (Burns 2016, p.29). Large corporations enjoy the advantage of having enough capital to see ideas through the idea creation, planning, prototype preparation, implementation, and exploitation stages. On the other hand, smaller businesses face the challenge of financing good ideas. Even where external angel investors are enlisted, the cost remains high regarding lost equity control. Thus, if Nowait were to bump into an idea that requires significant financial addition such as expanding its services beyond restaurants to supermarkets, it would most probably require giving away some of its control in exchange for financial support. The C.E.O will face the options of inviting an owner-partner into the company in exchange for financial support or relying on its revenues to amass enough revenue reserves for expanding. The latter is not guaranteed, as it might take too long to raise enough funds, which might see the company lose the chance. For the case of Apple, its sizeable financial influence and connections will allow it easy access to credit lines from large banks such as Barclays bank without interfering with its equity structure.
Contribution of Employees
Employees play one of the chief roles in innovating. Those companies that manage to tap into the abilities of their workers are often guaranteed of creativity. Research studies have shown that creativity and employee motivation are positively related. The challenge, however, is how to create a motivated work team. Those firms in which workers participate in decision-making and can identify with the output of their efforts are more likely to have motivated workers and hence more innovation. On this matter, Apple will have more challenge to keep innovation alive within its ranks due to the many levels of management that separate subordinate workers from the top positions where critical decisions are made. An average engineer at Apple will find it more difficult to identify his efforts with the success of the company than the worker operating directly under the CEO of Nowait Inc. would. The entrepreneurial organizational structure employed by Nowait and its small management size makes it possible for workers to reach and consult with the CEO, which is an important source of worker inspiration. This ability explains why Nowait will exhibit a significantly higher ability for innovation than Apple.
Closeness to Customers
The customer ought to be at the heart of any innovation. A profitable business is that firm that makes the customer the central focus of all its endeavors or what is regarded as "customer-centric" business management. The reason for this consideration is that customers support the business by buying its products and, therefore, giving it a reason to exist. Consequently, all innovations should start by first looking at the client’s needs, specifications, preferences, or tastes. Apparently, Nowait will have an easier time staying close to the customer, understanding their needs, and making relevant responses. Besides, clients will have an easy time interacting and sharing their point of views with the owner of the business, which also helps build client loyalty. The situation at Apple will be different, however. With about 498 stores and over one-hundred thousand employees, Apple Company is large enough to frustrate the efforts of any enthusiastic customer seeking to consult with the CEO, Tim Cook. The clear separation between critical decision-makers and the most central stakeholders limits the ability of Apple to innovate better than it does today. Also, any attempts to collect data from customers spread across the world will yield a complex amount of data that might be challenging to digest or difficult to apply without disregarding some important market needs.
Intellectual Property Rights (IPR) Issues
Despite inventions, many businesses lose their advantages to third parties that steal the intellectual property rights. An empirical study undertaken by Branstetter, Fisman, and Foley (2006, p.325) found that in most of the cases involving intellectual property rights violations, the affected parties are the smaller businesses. Apparently, smaller businesses are prone to losing their patents and copyrights to unscrupulous parties than the large corporations do. The reason most likely lies in the reduced financial ability that small businesses have when it comes to pursuing legal suits to their conclusion. The costs of hiring advocates and sustaining the trial through to its completion are often prohibitive and, in most instances, smaller businesses give up easily. The case, however, is different with the larger corporations. Fabricating new inventions by Apple will most likely end in a prosecution of the traitor as opposed to counterfeiting some of the brands that Nowait has in store. The matter poses a big challenge in the quest for US SMEs to break through competition ceiling. An example is the case between Uber Inc. and Otto Trucking LLC where the latter, a small startup business, accused the former of trade secrets misappropriation, unfair competition, and patent infringement (California Northern District Court 2017). Apparently, the case will have a heavy toll on the startup compared to the globally active Uber. The longer it takes, the more pressure the startup will face.
Given the benefits and challenges that follow both the small and large firms that pursue innovation, some changes can be made to increase the likelihood of benefiting from innovation perpetually.
Financial adequacy: small companies should strive to establish financial relations that can come in handy to support them in implementing innovations without incurring too much of the unintended costs. For instance, instead of selling out shares, these companies should consider issuing out loans or redeemable stocks. In addition, small businesses should consider creating strategic partnerships and time-bound collusions to help them exploit their financial needs when it comes to exploiting new products and services.
Involvement of workers: large corporation should empower workers through a decentralized decision-making culture that supports employees’ participation in decision-making. Also, it would be appropriate to decrease the distance between top management and subordinate workers by decreasing the number of middle-level managers and enrolling the use of teams. This means that the hierarchical structure will be flatter than before and a single manager will oversee more subordinates. This way, creativity will be stimulated. This approach to motivating workers is in accordance to the Self-Interest model that advises, among other things, giving the employee the chance to prove his competence within a less controlled environment (Scarborough 2009, p. 34). Similarly, small businesses should not disregard the input of workers even as they grow in size and capital.
Focus on clients/customers: both large and small business should strive to remain close to the customer for further indications or signs of change in tastes or preferences that might inspire innovation. More so, large companies should encourage the executive board members to operate an open door policy where clients can reach them quickly (Stokes, Wilson, & Mador 2010, p.67). Besides, these companies should consider having a presence on social media and online where they can do crowd sourcing of ideas. Then, where data is taken from the fields for analysis, it would be advisable that the management counterchecks the effectiveness of this data with the situation on the ground to ensure that the best possible scenario is captured. Conversely, small businesses should not forget their clients even as they expand in operations and size.
IPR issues: small businesses should make sure that their trademarks, copyrights, and others are duly registered with the right government agencies. The earlier this action is done, the better, as it would make it more challenging for counterfeits to emerge.
Apparently, innovation can benefit a firm or can be a challenge at the same time. Devising a new product or service and successfully exploiting it in the market is not an easy feat. The case of Apple and Nowait illustrate just how different factors can support or suppress innovation in business. Often, the large companies have an easy time when it comes to using financial resources to serve their quests; nonetheless, there tall hierarchical structure makes it challenging to obtain innovative ideas from workers and customers. On the other hand, small businesses are agile and flexible making it easier to tap ideas from employees and customers in the field. Unfortunately, they are often faced with financial challenges and the risk of losing intellectual property rights. The mentioned challenges can be addressed through careful planning and considerations with the interests of the customer at the center.
Burns, P. (2016). Entrepreneurship and Small Business (4th Ed.). London: Palgrave
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Branstetter, L., Fisman, R., & Foley C. F., (2006) “Do Stronger Intellectual Property Rights
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Marinoff, N. (2017). Just how big is the digital currency industry? DCE Brief. Available at:
https://dcebrief.com/just-how-big-is-the-digital-currency-industry/. (Accessed 12/4/2017)
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Stokes, D., Wilson, N., & Mador, M. (2010). Entrepreneurship. Hampshire, UK ; Australia, South-Western/Cengage Learning EMEA.
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