New Business and Strategic Planning

Lesson Introdction

New Businesses

In order to create a new company you must first evaluate your marketplace and make an estimation of the future success of the company you wish to create. The typical approach to make this kind of assessment is through writing a business plan. A business plan will allow you to get a better idea of whether or not your idea for the new company you are considering is a good idea or not. When writing a business plan there are many factors that and individual must consider and evaluate in order to conclude whether or not a business idea is a good one or not.

Strategic Planning

Strategic planning is key to the evaluation of a new business idea and to the established company. Strategic planning goes through a very rigorous process of identifying strengths and weaknesses of different ideas and directions the company is considering. This process allows the company to make well –informed decisions and plans for the future. The evaluation system of strategic planning helps to ensure that the company will remain stable and profitable in the future. Although strategic planning is limited due to a company’s inability to see unpredictable changes, it offers the company a plan of action to follow. This plan of action helps the company to stay in business and be aware of its goals.

Factors that are Important for New Business

· Low taxes

· Skilled staff available for hire

· Low interest rates

· Cheap rent prices

· Stable economy

· Good transportation links

· Cheap labor

· Strong and stable currency

· Government grants

Exercise 1: Match the words on the left to their definitions on the right.

New Vocabulary Review

1) The interest rate is the cost of borrowing money.

2) The exchange rate is the price at which one currency can buy another.

3) The inflation rate is the general increase in prices.

4) The labor force is the total number of people working.

5) Tax incentives are low taxes that are offered to encourage business activity.

6) Government bureaucracy consists of official rules, regulations and paperwork.

7) GDP is the Gross Domestic Product and is the total value of goods and services produced in a country.

8) Unemployment rate is the percentage of the population without jobs.

9) Foreign investment is money from overseas.

10) Balance of trade is the difference in value between a country’s imports and exports.

Vocabulary Exercise

 The economy is stable following the problems of the past two years. By following a tight monetary policy the government has reduced the i____ r___ to 2%. After going up dramatically, the i_____ r_____ to 8%. The last six months has seen a slight improvement in the e______ r____ against the dollar. The G____ has grown by .15%. Exports are increasing and the b_______ of t_______ is starting to look much healthier. The u____ r____ continues to be a problem as it is still at 16%. In order to stimulate the economy and attract f____ i____ the government is offering new t____ i____ as well as making a renewed effort to reduce g____ b____. Finally, a large skilled l___ f____ means there could be attractive investment opportunities over the next five years.

Answers to Vocabulary Exercise

The economy is stable following the problems of the past two years. By following a tight monetary policy the government has reduced the interest rate to 2%. After going up dramatically, the inflation rate to 8%. The last six months has seen a slight improvement in the exchange rate against the dollar. The GDP has grown by .15%. Exports are increasing and the balance of trade is starting to look much healthier. The unemployment rate continues to be a problem as it is still at 16%. In order to stimulate the economy and attract foreign investment the government is offering new tax incentives as well as making a renewed effort to reduce government bureaucracy. Finally, a large skilled labor force means there could be attractive investment opportunities over the next five years.

Homework Assignment

 Try to answer the following questions about Ukraine.

What is the population of Ukraine?

What is the population of Berdyansk?

How many people study at ARIU?

What is the average salary in Ukraine?

What is the inflation rate in Ukraine?

What is the interest rate for savings in Ukraine?

Interesting International Facts (data as of the year 2000)

Biggest cities in the world (population in millions):

1^st Tokyo, Japan- 26.4

2^nd Mexico City, Mexico-18.1

3^rd Lagos, Nigeria-13.4

Oldest populations (% aged over 65):

Italy-18.2%

Sweden-17.4%

Belgium- 16.7%

Computers per 100 people:

United States 45.5

Switzerland 42.1

Australia 41.1

Cars per 1,000 people:

Lebanon 732 (268 people without cars)

Italy 539 (461 people without cars)

Germany 506 (494 people without cars)

Lesson 6: English Grammar Exercise

“When,While, Before, After, Until, As Soon As”

Exercise A: Fill in the blanks below using the word(s); when, while, before, after, until,

Don’t make a decision ____ we’ve seen the report.

I’m meeting with Angela this afternoon. Send her up _____ she arrives

Let’s sort out this problem _____ she gets here.

I’m going to fly out to Paris tomorrow. I’ll phone you ______ I get there.

Will you type this report for me _____ I am away.

Case Study

Company Name: Marcia Lee Jeans

Company Information: Marcia Lee Jeans is a company that is based in NY. It is a brand that is well known in the U.S. The jeans sell in the upper price ranges and appeal to fashion conscious people aged 15-40. They are distributed in major department stores throughout the country. At present, the jeans are made in the U.S. by a number of factories on the East coast, none of which are owned by the company. Competition in this segment of the market is strong, so the company has to keep costs as low as possible in order to remain profitable. In the next 10 years, the company plans to expand in Europe and Southeast Asia so that it becomes a global company. To do this, it has decided to build its own factory in an overseas country. The factory will have approximately 2,000 workers who will produce the jeans. These workers will be recruited locally. Denim, the raw material which is used to make jeans will be imported from several countries. The company is considering two countries as a location for their new factory. Based upon the information you have about the two countries, which country do you think is the best place for the new factory to be located in?

Lesson 7