New Venture Opportunity Recognition New Case Study

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This will help to set off the startup costs.

The initial production costs are realistic because of the suggestion that outsourcing will be used. The company is relying on an outsourcing expert who has written several books on the subject. The software development will also expand to an offshore location which potentially can cut cost even further. USuggest plans to use search engine linked online portals as a marketing tool and they are seeking a merger or acquisition with a large, established Internet company to further increase profits for their brand. Mergers can lead to the company becoming more efficient by utilizing economies of scale. Cost saving can also be recognized by combined marketing, advertising and by cutting down on the overlap of R&D (Shukla and Gekara, 2010).

Even though this venture is in the startup stages, it definitely has the potential to grow into something much larger. The target market is online shoppers and online shopping is a $130 billion dollar business. Looking three to five years into the future shows that online shopping, as well as social networking will only gain more popularity and neither shows any signs of phasing out. The idea of combining social networking and online shopping might need a little time to emerge. Since this is a combination of two popular technologies, the idea should catch on and spread quickly.

USuggest may be a part of a growing family. Once other companies see the profitability in this type of business venture, they may want to start something similar or invest in the business itself. The customer base is already existing (social networking and online shopping), so even though there will need to be some marketing efforts, a large portion of the business can be devoted to software development.

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The recommendation for USuggest, LLC would be to consider a merger or acquisition sooner than the five-year mark. Their financial summary shows a significant profit by year three. If the company stays on target, this would be a good time to for them to begin exploring the option of a merger or acquisition by a much larger and much profitable Internet company. Instagram is a perfect example of a startup that gained popularity fast and was bought by a much larger, more profitable Internet company (Facebook). This proves that it is not necessary to wait a certain number of years for a company to show large profits. If USuggest provides a service which consumers want the realization of larger profits can be experienced soon.

Among the two choices, Plunar will be chosen as the winning new venture and USuggest will be the runner up. Both of these new ventures look extremely promising and don't require millions in financial investment. However, because cloud computing already exists and is growing in popularity it appears to be a venture that does not require much explaining to investors. Although it is fairly new, it is not a totally new concept and the opportunity to get in on the ground floor is still good. USuggest is a new concept which combines two existing popular concepts. Everything about this venture on paper says it will work and even though on paper it says it will turn a profit by the second year there is nothing else out there like it. USuggest may be a bit more risky than Plunar, Inc. To invest in. For these reasons, Plunar is chosen as the top new venture opportunity......

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