A Business Plan Harvard Case Solution & Analysis

3)    Business development:

PEST analysis is used to make the business development strategies. PEST analysis is a useful business measurement tool which includes political, economic, social and technological factors to assess the market for the business. It is also used to examine the potential, direction and position for a business.

PEST analysis for the genetically modified crops:

a)      Political factor:

The government strict regulatory laws for GM crops for food safety both on the production and import side may politically impact the GM crops. The additional cost of labeling genetically modified crops may increase the cost of generic foods. The other government restrictions and laws related to genetically modified crops have an important impact on the distribution of the sales of genetic crops.

b)     Economic factor:

The economic factors that will impact the generic modified crop are a production value which depends upon the harvest quality that involves the consumer acceptance of generic modified crops products. Variable cost is another economic factor that may affect the GM crops, which determine the use of the generic modified crops. Cost of seeds also impact economically as GM seed are more expensive than the conventional seeds. The real cost of GM crops is expensive for tax payers, farmers and companies that are using GM crops.

c)      Social factor:

The generic modified crops can cause health problems and may damage the environment. Agronomic performance of crops for foods, feed and processing application are devised by using the transgenic technologies. Seed developers, bee keepers and farmers of all food production chain are constantly threatened by the contamination from GM crops. GM crops also have beneficial effects on the food that we eat to enhance the vitamins and nutrient of the food. The security and the quality of food provided by the use of generic modified crops will improve the health of the human beings and animals.

d)     Technological factors:

Technological factors have great effect on genetically modified crops because of the production center of the large scale farm that can afford the expensive seeds; will dominate over the diversified contribution by the farmer who cannot afford the technology. The technology plays an important role in generating employment as more workers are needed to harvest the yields that are significantly higher. Due to the advancement in technology there has been an increase in the new agricultural products. GM products protect human health and the environment with the help of latest technologies.

4)      Administration:

The financial projection for the business plan is made for 5 years. Financial projection is the estimation for the financial positions and the changes in the cash flows of a business; which includes the sales of crops and expenses. The general and administration expenses include: the projection of corporate labor, benefits and taxes of labor, rental and utilities, communications, insurance and other expenses. Other expenses included in the financial projection of business plan are; advertising and promotion, professional services, merchant service fee and debt service expenses. The financial projections of business plan show that the profit in sales will increase gradually from year 1 to year 5. The gross profit will also increase from 40% in 1year to 51 % in next 5 years. In the first year expenses will be more than the revenue whereas after year 1; it is anticipated that the revenue of the product sales will be greater than the expenses related to the launch and sale of the product. It is a forecast of future revenues and expenses related to the business, which helps to achieve the business target. The profit margin percentage for 5 years shows fluctuations during the 5 year projected data for the product sales. The overall estimated financial growth for the business will increase at a steady rate..........................................

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