Financial Accounting And Banking Industry Essay

Question:

Discuss about the Financial Accounting and Banking Industry.

Answer:

Introduction

The main idea of the business is to initiate a business plan for developing an android and iOS application for Australians that describes the law and offences of every country around the world. This will be one of a kind business in the entire country. The application will provide the users with an opportunity to sign up for a 24 hour free trial before actually buying the product. Initially, “Arpund the World” will be able to provide the laws of some of the major destinations such as Japan, China, UAE, U.S., France, Russia, Germany and Switzerland. The application will gradually provide the users with update thereby increasing the list of countries. The main idea of developing this app will focus on providing the laws and offences of all 195 nations which exists in the world at present.

Location in Australia where marketing has to be done – The main location of marketing the products in Australia will be done in all the regions of the country.

Channels to market – the acquisition of incentivised user download will help the Management company in growing the user base of the application and top list rankings. This has been considered as one of the most effective means of channel to marketing for posting the total number of install rates in a short span of time. It is also identified as one of the most cost efficient means and ideal for a start-up business. The non-incentivized CPI will be adopted by the company for having an impact of high lifetime value which will be able to translate into more number of active users a month and better monetisation for the company. The other effective strategy for the channels to marketing has been identified in form of social media and Facebook advertising. The company for the looks forward to adopt co-promotional partnerships which will allow mutually beneficial partnership for reducing the overall cost of the venture (Brus Media, 2017).

Customer segments – The main form of the customer segment segregation has been done with people aged 19-80 years. As the main aspect of the service has been identified in form of providing legal information of all the countries, it will be particularly beneficial to people who do a lot of travelling. This particular trend of travelling is mainly identified among the overseas college students, newly joined employee in an overseas country, experienced professionals, international reporters and several other categories of people.

Customer relationship – The customer relationship will be maintained in a “customer relationship management software”. The company will further use the information of customers through the feedback given in the app stores of both Android and Apple users. This will allow the company in categorize the customer base in spreadsheets and lists. The data will be further stored in form of CRM application named vtiger. This will allow the company to develop a complete set of features and functions required for CRM and assist in maintaining both new and existing customer relationships (The Vtiger Blog, 2014).

Marketing expenditure –A significant portion of the marketing expenditure is further seen to be considered in form of in form of social media and Facebook advertising. The company also seeks to invest in YouTube analytics to know the customer trend of liking and demography. It is able to monitor the performance of the channel that have demonstrated the information about the application and provide the developers with accurate traffic sources and demographics report (Hochman, 2017).

The advertising costs for the application has been further calculated based on cost per mile (CPM) and cost per click (CPC) rates in both android and iOS platforms. This is the cost per thousand rates an advertiser needs to pay for displaying the ads and for every time and user clicks on the ad. This is important for considering the advertising costs associated to the application.

Advertising Expenses for CPC and CPM

Parameter

Average Rate

Year 1

Year 2

Year 3

Year 4

Year 5

CPC

$ 2.14

1400

1600

1700

1700

1800

CPM (Government & Politics)

$ 1.33

1800

1,696

1,695

1,797

1,802

Total

3,200

3,296

3,395

3,497

3,602

Table: “Arpund the World’s advertising Expenditure”

(Source: Johnston, 2014)

Organizational plan

Resources to be used: The main resources needed requirement for the company are seen in form of a team of software developer, online sales representative, operations department, marketing department, HR department and accounts department.

How many workers: The total requirement of the personnel’s has been seen in form of 15 workers employees in total. The main form of the segregation of the workers has been seen in terms of 4 personnel as software developers, 4 personnel as online sales representative, 2 personnel in the operations department, 1 personnel in the marketing department, 2 personnel in HR department and 2 personnel in the accounts department.


Expected wages: The expected wages of the individual workers has been seen with the annual salary received by the employees. It has been seen that the average annual salary of the 4 software developer is AUD 106614 individually per annum, 4 personnel as online sales representative is AUD 30000 individually per annum, 2 personnel in the operations department is AUD 65000 per annum, 1 personnel in the marketing department is AUD 45000 per annum, 2 personnel in HR department is AUD 60000 per annum and 2 personnel in the accounts department is 75000 per annum (Glassdoor, 2017).

Abide policies – The Company needs to adhere to the various types of confidentiality agreement. It needs to further make a copyright protection as it will give the evidence and prove that ownership of copyright (Deegan, 2013). The next step is to create an app developer contract so that the company is able to ensure it does not pass the final codes to the third party app developers.

Hire places – The main form of the hiring activities for the various positions such as the software developers, online salesman, operations department, marketing department and HR department has been identified in locations such as Melbourne, Greater Sydney, Newcastle, IIlawara, Hunter Valley, Richmond Tweed, Central West, Southern Highlands and Shoalhaven regions (Financial Review, 2014).

Business model-the main aspects of the business model formulated for the company has been able to address the main processes for customers, technology, people and innovation in the products. The main trends of the business model has been further seen to be explained based on the culture, behaviour, leadership, training, incentive, peer reviews and monitoring (Pratt, 2013). The complete list of the activities of the business model has been shown below as follows:

Approvals needed from Australian Gov: The main form of the government approval has been seen in terms of adhering to the copyright laws, Internet, importation of software into Australia, anti-trust provisions and limitation of liability (Australia.gov.au, 2017).

Financial plan

Initial cost- The cost of the total expenses has been seen with $ 100000 for the total monthly expenses, this is identified as the total owners funding. It has been further seen that in order to fulfil the cost of the fixed assets and the high salary of the employees the company had to take a total loan amounting to $ 20000.

Proposed pricing strategy –The products are priced for the people belonging to upper middle class it has been seen that the main pricing strategy for the products are seen to be skimming strategy. Based on the various types of pricing strategy adopted by the company it has been seen that in the first two years company would be making a net loss of $ 5380 and $ 4270. However, in the subsequent years it will be able to increase the sales volume for the paid features and by including laws of more number of countries. In this way, Arpund the World will be able to achieve a net profit of $ 27239 in the third year, $ 86186 in the fourth year and $ 187908 in the fifth year respectively.


Strategy to be followed to survive in the market- The main strategy followed to survive in the market has been seen form of differentiation of the services from other android developers. It has been seen that “Arpund the World” is identified as a one-stop application for knowing about laws and offences across all the major nations of the world. This is identified as the main driving force towards a differentiated marketing strategy. The company further stands apart by providing the users with opportunity to sign up for a 24 hour free trial before actually buying the product (Bushman, 2014).

Breakeven point – The breakeven point of sales based on the financial data has been able to show that the company needs to sell services worth $1231046.8 to make a minimum profit of $ 123104.68.

Fixed cost and variable cost – The fixed cost of the company has been seen in terms rent for the premises and buying of electronic equipments. Some of the main forms of the variable cost of the company have been further seen in terms of Direct Labour Costs, third-party developer of the application, Direct Material Costs and Electricity cost. The fixed cost has been evident in form of $ 8500 paid for the rent of the premises. This rate has been sourced from the Gumtree, where the weekly rent for an office space in Town Hall at Sydney is $ 200 (negotiable) a week. This rate has been negotiated to $ 158 per week, and hence the total rent is $ 8500 per annum (Gumtree, 2017).

Conclusion

The main interpretations made for the business plan has been seen to be realistic in nature. It has been further observed that the main location of marketing the products in Australia will be done throughout the country. A significant portion of the marketing expenditure is further seen to be considered in form of in form of social media and Facebook advertising. The company also seeks to invest in YouTube analytics to know the customer trend of liking and demography. The main strategy followed to survive in the market has been seen form of differentiation of the services from other android developers. The organization plan has been seen in terms of hiring of people in relevant departments such as software developer, online sales representative, operations department, marketing department, HR department and accounts department. The breakeven point of sales based on the financial data has been able to show that the company needs to sell services worth $1231046.8 to make a minimum profit of $ 123104.68.

Reference List

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