Monthly Archives: September 2016

Advantages of Information Technology

Information Technology or IT mainly deals with computer applications. The common work environment today is totally dependent on computers. This has led to the need to develop and consistently upgrade dedicated computer software like project management software, for a number of related requirements. These include storage and protection of content, processing and transmitting of dedicated information and the secured retrieval of information, when and as required. IT promotes computing technology, covering everything from installing applications to developing databases.

Why is Information Technology Important

All our work related applications are now completely automated, thanks to the IT sector. IT professionals are people involved in essential management of sensitive data, exclusive computer networking and systems-engineering. The advancement of the IT sector has resulted in automated:

  • Administration of entire systems.
  • Production and manipulation of sensitive information.
  • Cultural development and communication.
  • Streamlining of business processes and timely upgrades.

Advantages of IT

• Globalization
True globalization has come about only via this automated system. The creation of one interdependent system helps us to share information and end linguistic barriers across the continents. The collapse of geographic boundaries has made the world a ‘global village’. The technology has not only made communication cheaper, but also possible much quicker and round the clock. The wonders of text messages, email and auto-response, backed by computer security applications, have opened up scope for direct communication.

• Cost-effective
Computerized, internet business processes have made many businesses turn to the Internet for increased productivity, greater profitability, clutter free working conditions and global clientèle. It is mainly due to the IT industry that business have been able to make their processes more streamlined, thereby becoming more cost-effective and consequently more profitable. People are able to operate their businesses 24×7, even from remote locations only due to the advent of information technology.

• Communication
Quick and effective communication is vital to any business anywhere in the world. Information technology gives an entrepreneur or business the tools, like email, video conferencing, SMS, etc., essential to communicate efficiently and effectively. to the business world, and information technology gives your company the resources it needs to communicate quickly and effectively. Not only do people connect faster with the help of information technology, but they are also able to identify like-minded individuals and extend help, while strengthening ties.

• Storing and Protecting Information
IT provides a low-cost business options to store and maintain information that may be important from a business or service point of view. Virtual vaults and other such security systems not only store vital data but also allow control over the access to such information. IT security systems will also protect virtual data from being hacked or wiped out in case of any technical failure.

• Creation of New Jobs
One of the biggest advantage of IT has been the creation of a whole new field of opportunity for skilled personnel leading to new and interesting jobs. Hardware and software developers, computer programmers, web designers, system analyst, the list of new jobs created could go on. IT has also been attributed to be the major cause of surge in the economies of certain Third World nations too.

Things that were once done manually or by hand have now become easier and faster due to the advent of a computing technology. Our world today has changed a great deal with the aid of IT which has penetrated almost every aspect of our daily lives and society, from leisure to business. IT has become a part of our day-to-day lives through the evident use of PC’s, Internet, cell phones, faxes, the list would seem endless. Let us hope that newer development in the field of IT can provide benefits to our future generations, just as it has greatly benefited ours.

Ways to Set Up a Dairy Farm Business Modern

Dairy farming business is growing by leaps and bounds in developing and developed countries. United States is the second largest producer in dairy production and has around 70,000 dairy farms. This business requires long man hours in which a typical day of a dairy farmer is from 4 a.m to 6:00 p.m where supervision and cleaning is important. Even understanding the current scenario where the dairy business is volatile because of high supply and low demand, has diverted the dairy farmers to move into other avenues.

Land Facilities
While starting an animal husbandry business, it’s essential to evaluate land requirement wherein the farmer has to calculate land required in constructing shed, equipment storage and availability for raising fodder. While deciding on location other factors like constructing facilities for cows, having a source of water and proximity to the market are necessary points to be considered while purchasing a land. It’s always better to purchase land rather than lease it as the leasing costs can contribute to increased costs.

Machinery
With advent of technology in dairy farming, equipment used in this business are different than they were for past couple of years. Machines for milking, sterilizing and milk storage tanks are available. It’s up to the owner to compare the cost of purchasing or leasing it. Also, automatizing the operations with the help of computers is preferred as it simplifies the task of record keeping.

Cattle
After deciding on land and equipment requirement, another aspect is number of cows which the farmer wants to purchase. Deciding on the costs and cow breeds to be purchased will be helpful in understanding the financial costs involved. Starting with healthy cows will certainly help to recover long term costs. Also, while deciding on the numbers consider other factors like medical costs related to cows, feeding costs, cleaning and insemination costs too.

Competitors
It’s very important to know about your competitor’s working. Getting into a business with the knowledge of competitor’s strength and weakness will help you to eliminate future problems. If you are starting a small business setup, it’s important to know your local competitors. This information can help you in customizing your strategic plan of exploiting your competitor’s weakness and converting it into your strength.

Legal Rules
For any business that you start, you need to comply with the rules and regulations of the particular state. Similarly, while setting up your dairy business it’s important to find out about licensing rules, taxes levied on your business and laws about bottling the milk in your premises. Here, it’s better to consult an attorney who can guide you or browse the government website for further details. Also, try to get a ballpark figure for the costs involved in insuring your assets. Do understand the terms and conditions attached while insuring, as some costs might have to be borne by the owner.

Franchising
Even though many want to start their independent venture but with excess costs and less return on their investment, franchising is a better option. Franchising helps the new dairy owner to gain experience and expert knowledge on the new technology used. Also, as the franchise is already an established name in the market, the dairy owner will be saved from the hassle of building a brand name. Also, the costs involved in starting a franchisee business is less as compared to starting a new business.

Financial Aspect
As costs of starting a firm is of prime importance, it’s necessary for the owner to understand the bifurcation of costs. Typically, an owner will face two types of costs: Fixed and Variable. Fixed are going to be constant and nothing can be done to reduce it but variable costs are going to vary according to the production. Examples of fixed costs like loan repayments, lease payments and insurance premium payments. Variable costs on the other hand include fodder, labor and utility bills. The key for earning profit is that the revenue should be more than costs. There are external factors like economic conditions which regulate the price of the milk. Like in recent times, the price of milk was low and this hurt the revenue of the milk producers. So, financial planning in terms of regulating the costs and increasing the revenue is always a better option.

After considering all these aspects, it’s important for the new owner to thoroughly research the business environment so as to start a successful dairy farm. As the dairy industry has already some big players which easily dominate the market supply, it’s more crucial for the new entrant to plan strategically for the future.

Importance of Business Communication in Modern World

With the advent of technology to previously unimaginable heights, the importance of workplace and business communication has become even more profound. Gone are the days when businessmen would reach their office and find stacks of letters and notices lying on their desk. This is the digital era, and the presence of BlackBerry’s and other mail exchange devices means that these same businessmen are never out of the loop, at any point of the day now.

Communication is a pretty generic term and it takes up different meanings in different scenarios. When we speak of business communication we literally mean the channels of exchange of thoughts and opinions and orders that exist within a business organization, and also the channels that pass from one organization to another. The two communicating parties can be partners or one of them can be a vendor of the other one. And in today’s highly globalized marketplace, these are relationships that are not uncommon by any means.

Latest Communication Technology

As already mentioned, the digital era has brought with it many new facets and means for the purpose of business communication. ‘Snail Mail’ is no longer an option for the parties involved, and today one can reach a colleague or a superior instantly with the touch of a button. BlackBerry smartphones are what started this trend on a big scale, and these gave businessmen the opportunity to check their emails at any time, speak on the phone and text each other at any time, and also make video calls at any time. The Apple iPhone soon found its way into corporate hands, and this eventually led to the introduction of Android based phones as well.

The latest entrant in the field is the Apple iPad and other competing tablets, and these perform all the aforementioned tasks with ease. It is very important for business organizations to embrace the latest technology for communication purposes. Doing so not only showcases an attitude that is open to new innovations, but it also adds an air of professionalism and technological superiority about the company itself.

The Importance of Business Communication

Business communication consists of two aspects, internal and external communications. Internal communications take place when people within the same company communicate and interact with each other. Large workforces in the biggest companies make this an essential aspect of running any business, and this involves the passing of orders, the reporting of results, the reporting of complaints, the discussion of new ideas, the examination of client needs, the determining of marketing strategies, the production of the goods and the motivating of employees. All of these aspects are crucial for the smooth running of a business, and embracing new technology in the modern world for these purposes will be nothing but helpful.

The other form of communication that is necessary is external communication, and this involves interacting with vendors, clients, customers, press representatives and legal representatives. All of these channels require great tact and showmanship, and no company can survive without following the proper lines of communication. The needs of the clients need to be understood, the progress needs to be regularly conveyed to them, the procurement of raw materials needs to be carried out, the synergy and partnership with other companies needs to be nurtured, and the customers need to be targeted properly. All of these tasks require a concentrated effort from all departments of the organization, and this can only be achieved through proper means.

The importance of business communication in modern-day scenarios must not be underestimated by any means, since this is the life blood of any company. Embracing new technology for this purpose is also essential, and all successful companies know this.

Beginner’s Guide to Diversification Strategy

The diversification strategy of a company is a corporate strategy intended to increase profits by increasing sales volume, which, in turn, is done by launching new products and identifying new market segments. It can be implemented at both, the business unit level and corporate level.

In the case of business unit level, the strategy can be implemented for the company’s expansion by coming up with a new segment related to the existing business. An apt example of this will be when a company specializing in pencil production opts for the production of erasers.

At the corporate level though, the target area is a new business, which is not related to the existing business unit. An apt example of this would be a company specializing in alcoholic beverages entering the airlines sector.

There are several methods by which diversification strategy can be implemented; the most common among which are acquisitions and joint ventures.

Types of Diversification Strategies

The diversification strategy of a company can include several plans, ranging from the development of a new product to licensing of new technologies, or a combination of these plans. Basically, there are three types of diversification strategies: concentric, horizontal, and lateral.

Concentric Diversification
In this case, the technology used in the industry remains the same, but the marketing plan is changed to a significant extent. This strategy requires technological similarities between the two business ventures. Also, technical knowledge turns out to be an advantage when it comes to concentric diversification.

Horizontal Diversification
In this case, the technology used is in no way related to the existing business of the company, and yet, they take its current customer base into consideration when coming up with new products. This strategy is advantageous in a competitive market scenario, wherein the company has a loyal customer base.

Lateral Diversification
As in the case of horizontal diversification, even lateral diversification stresses on products which are not related to the existing line of products. The exception, however, is that the company targets a new segment of customers, instead of catering to its existing loyal customers.

Pros and Cons

Pros of Diversification
Diversification can help the companies to achieve their potential in a developing economy. In the case of concentric diversification, a strong brand name can help in leveraging the new products belonging to that brand. It can help the company in spreading its customer base. It also helps in enhancing the product portfolio of the company by introducing complimenting products in the market.

Cons of Diversification
When it comes to diversification through acquisition, one needs to ensure that the people at the managerial level are well-versed with the process that needs to be followed for the company to be acquired. If you are not armed with people who can handle these things, starting from the grass root can turn out to be tedious task. One also needs to take into consideration the efforts required to run the business. If the efforts required are more than the profit, it is better off to stay away from the venture.

Lack of knowledge about the current situation of the market can really backfire on you from all sides. Going against the core values of the company, just for the sake of profit is also not advisable, which again limits your options.

Of the four strategies enlisted in the Ansoff Product-Market Growth Matrix, diversification strategy is by far the most risky, and hence, requires proper research before implementation. At the end of the day, accuracy in determining the target segment is the key to successful diversification.