Launching a Hypothetical Aloe Vera Gel business Gel Business: Strategy, Structure, and Performance

Question

Task: What are the key considerations in starting a hypothetical Aloe Vera Gel business, including the ideal organizational structure, environmental forces, risks, and business practices to enhance performance?

Answer

Identify a ‘Hypothetical’ Business Opportunity

Beauty Products continue to register high demand among consumers globally. The raw materials needed to make these beauty products are in high demand making it a lucrative business that can be started with a minimal amount of money. Aloe Vera Gel business is the base material used in most beauty creams making it a raw material which is highly demanded among pharmaceutical and beauty product manufacturers across the globe.

Aloe Vera Gel business gel production is a simple and low-cost process but the finished product is highly demanded and achieves a high market price. Aloe Vera Gel business does not require special care and will flourish in harsh climatic conditions (Panda, 2003). It can easily be grown on arid waste lands which are easily available for free to the public and companies through government wasteland development programs.

This eliminates the requirement to purchase land to start the Aloe Vera Gel business farm. Aloe Vera Gel business is drought resistant meaning it requires a minimal amount of water to grow thus further improving the viability of the project. The plant will grow fast and is ready to begin harvesting within six months and will continue producing for 3 years before requiring to be replaced. The project will require investment in form of time to secure the legal paper work, waste land leases, Labour and equipment to start the project and gradually expand as production begins.

Aloe Vera Gel business gel Supply contracts can easily be secured from the beauty product and pharmaceutical industries. To generate the highest profit from the project, Aloe Vera Gel business gel shall be extracted using specialized equipment and supplies in gel form to the customers as opposed to supplying the raw leaves.

The Organisational Structure That Best Suits the New Business

Being an industry which depends heavily on skilled labour the project shall adopt the Staff or Functional Authority Organisational Structure (PMI, 2013). The business is expected to begin from a single unit and gradually expand its operation but will still remain heavily dependent on skilled professionals and labour. Initially, the business still starts with a 3 stage Functional Authority Organisational Structure due to their being a limited number of responsibilities.

The MD would also require coordinating and managing all operation due to it being a start-up business. It would also allow him to understand business operations and set goals and a direction. Gradually as the business expands, existing staff who have served the business for a long period shall be promoted to suitable positions and new professionals hired. Once established the business will also search for and locate other interested investors who can be involved in the business as a director and take certain responsibility which would free the MD allow him to focus on further expansions. Once operations are fully functional, the business would have a total of 6 Levels each catering to different aspects of the business operations.

Initially, the project shall only consist of one tire that will be responsible for monitoring a personal, quality control, production, R&D, and Finances. As the project grows and expands its operations all positions below MD namely Director, GM, manager, Foreman and workers shall be separated department wise. Each department shall cater to specific functions (personal, quality control, production, R&D, and Finances) which will help distribute responsibilities and improve efficiency.

Influential External and Internal Environmental Forces

Internal Environment forces

Internal environmental forces refer to factors which have a direct effect on the business operation functionality and growth (Shaikh, 2010). The business management and leadership also influence these factors which make it important to understand certain forces that are likely to influence the proposed Aloe Vera Gel business Gel production and packaging business.

Value system

The value system refers to the value invested on the man power and all stake holders linked to the project. It is important for the business founder to establish a stable working environment for the employees and stakeholders by offering attractive wages, working terms, and policies which help address stake holder needs. It’s also important to demonstrate contributor value by offering appraisals and incentives which help improve the individual’s performance and focus towards the project. This is especially important on the new project which requires maximum attention and focuses to achieve the highest returns in the shortest possible time.

Mission vision and objectives

The founder must also clearly state the projects mission, vision, and objectives to each of the project's employees and stakeholders. It’s important to identify and set growth targets which each of the stakeholders must be educated on so as to focus their attention on achieving the goals. Every employment position should have a set target to be achieved while still maintaining the highest quality of products or services while still maintain the businesses growth.

Management structure and Nature

A Hierarchy leadership and management structure should be adopted but at the same time, it’s important for the business to offer adequate flexibility related communication. Stake holders and employees should be guided towards taking over ownership of their position and responsibilities thus helping reduce the pressure on other members. Taking ownership of one’s position allows the each manager and individual focus on improving their own department without needing to constantly remind subordinates to do their job or pick up in an area which may be lagging.

Communication between all departments and managerial levels should follow a hierarchy approach but direct communication can be made in instances where the individual feels a need to make direct contact with the higher or highest authority. This helps build stronger ties between all stake holders and business employees thus allowing each o focus better on their work and building better communication as a team.

External environment forces

External environment forces refer to indirect factors which influence business operations (Smit, 2007). These factors are not influenced by the business, management or leadership and are dependent on Micro and Macro Environment Factors as discussed below.

Micro Environment Factors

Micro environment factors include factors which are directly linked to the business operations and performance but which the business do not have control over. Some common micro factors include the suppliers, customers, marketing intermediaries, financiers and the public. Each of these factors is directly linked to the Aloe Vera Gel business gel production and supply businesses success but they are also factors which cannot be controlled by the business (FPBM, 2005). While the project has no control over these factors, the management can attempt to improve on certain factors which will attract and retain the Micro Environment Factors.

Macro Environment Factors

Macro environment factors are less controllable and will usually require for the business to adopt alternative and change as per the factors. Factors such as the economic, social, political, legal and technical environment will all influence a business’s operation. With regard to the Macro environment factors, the business will have to adapt to the factors rather than expect the factors to adapt to the business.

Risks That Will Confront Your Business Organisation

The main risk ABC Aloe Vera Gel business Gel is likely to encounter during its operations is Drought, disease, and competitors. These three elements are the biggest risks he projects is likely to encounter but with proper management, ABC Aloe Vera Gel business Gel will be able to overcome these risks. Aloe Vera Gel business plants are highly resilient and flourish under arid and semi-arid conditions due to being a succulent plant; they absorb water fast and store the liquid in their leaves for later use which reduced the risk of drought damage. The disease is also rare among Aloe Vera Gel business but certain factors such as blight require to be keeping in mind to prevent leaf damage and gel quality (Bartlett, 2004).

Competitors would require proper planning whereby ABC Aloe Vera Gel business Gel would require to be prepared to expand their operations aggressively once established. This would put smaller start-ups under pressure thus discouraging competitors from entering the business. With 12-24 gaps between start-up and competitor entry to the business, ABC Aloe Vera Gel business Gel will need to expand aggressively to win supplier confidence and maintain very low and competitive prices to discourage competitors from entering the market.

Business Practices That Enhance Organisation Performance

They maintain high organizations performance ABC Aloe Vera Gel business Gel would require ensuring certain practices are implemented and used during the operation to help boost organization performance. Employee Engagement, influence of high-impact leadership practices, Identification and Removal performance obstacles, Align the businesses and employee’s needs, & organize Training and Development camps to enhance and test employee knowledge (Lusthaus, Adrien, & Anderson, 1999).

These practices all have a direct influence on the workforce and employees which also has a direct influence on the organization's performance and growth.

Most Important Functions that Influence Performance

References:

Bartlett, J. (2004). Project Risk Analysis and Management Guide. Buckinghamshire : APM Publishing Limited.

FPBM. (2005). Fresh Perspectives: Business Management. Cape Town: Pearson South Africa.

Lusthaus, C., Adrien, M., & Anderson, G. (1999). Enhancing Organizational Performance: A Toolbox for Self-assessment. Ottawa: IDRC.

Panda, H. (2003). Aloe Vera Gel business Vera Handbook Cultivation, Research Finding, Products, Formulations, Extraction & Processing. Delhi: National Institute Of Industrial.

PMI. (2013). Guide to the Project Management Body of Knowledge. Project Management Institute.

Shaikh, S. (2010). Business Environment. New Delhi: Pearson Education India.

Smit, P. (2007). Management Principles: A Contemporary Edition for Africa. Cape Town: Juta and Company Ltd.