business analysis doc

« King’s Business School, King’s College London Cover Sheet for King’s Business School 23/24 Candidate ID: AE 23375 Module Code: 5QQMB210 Module Name: Entrepeneurial Ventures Word Count: 1280 Please complete the above candidate and module information and attach to the front of your answer sheet/submission or write your answers on the following page(s). Where applicable students should clearly state the question(s) they are answering (e.g.

Question 1, Part A) so it can be clearly identified for markers. DECLARATION BY STUDENT I understand what is meant by plagiarism/collusion and have signed at enrolment the declaration concerning the avoidance of plagiarism/collusion. I understand that plagiarism and collusion is a serious examinations offence that may result in disciplinary action being taken. I understand that I must submit work BEFORE the deadline, and that failure to do so may result in late submission penalties. I understand that where a word limit is indicated, I should adhere to the word limit and failure to do so may result in penalties. I understand that King's requires students to acknowledge any use of generative AI tools in coursework.

Please select and complete the applicable statement, and provide additional information where required. 1.

I declare that no part of this submission has been generated by AI software.

These are my own words. Note.

Using software for English grammar and spell checking is consistent with Statement 1. [or] 2.

I declare that parts of this submission have contributions from AI software and that it aligns with acceptable use as specified as part of the assignment brief/ guidance and is consistent with good academic practice.

The content can still be considered as my own words.

I understand that as long as my use falls within the scope of appropriate use as defined in the assessment brief/guidance then this declaration will not have any direct impact on the grades awarded. I acknowledge use of software to [include only the statements which apply, and provide details as appropriate]: (i) Generate ideas or structure suggestions, for assistance with understanding core concepts, or other substantial foundational and preparatory activity. [insert AI tool(s) and links and/or how used] (ii) Write, rewrite, rephrase and/or paraphrase part of this essay. [insert AI tool(s) and links] (iii) Generate some other aspect of the submitted assessment. [insert AI tool(s) and links] / Include brief details] By completing this assessment, you acknowledge that you have read and understand the above.

Please do not sign your name. SECTION 1 CALCULATING FINANCIAL VIABILITY To calculate the financial viability of my app, I had to calculate the Cost of Goods Sold (COGS) and the customer acquisition costs in order to monitor my business’s prospective performance.

The Cost of Goods Sold “consists of all the costs associated with producing the goods or providing the services offered by the company.” And so, for the costs associated with my app “Recetterie” I have outlined the following costs [1]: ● Application hosting and monitoring costs £800 p/m x 12 = 9,600 [2] ● Data communication expenses £200 p/m x 12 = 2,400 [3] ● Software licence fees £350 p/m x 12 = 4,200 [4] ● Website development and support costs £80 p/m x 12 = 960 [2] ● Subscription costs £150 p/m x 12 = 1,800 [2] TOTAL COGS = 18,960 The Customer Acquisition Costs = Marketing Expenses (£5,000) [5] + User Acquisition Costs (£2,500) + Retention Costs (£500) TOTAL CACs= 8,000 CACS per user 8,000/10,000 = 0.8 To estimate Unit Economics, I’m going to assume that I have acquired 10,000 users. Therefore, my COGS per user would be 18,960/10,000 = 1.896 Lifetime Value per User = Revenue per User - COGS per User As established in the Group project, 63.7% of my users are willing to pay between 5-10£. So, I have assumed an average price of £7.5 per user. LTV p/u (7.5 - 1.896) = 5.604 Unit economics= LTV/ CAC 5.604/1.896 = 2.95 Given the one-off fee revenue model, the total revenue generated from 10,000 users is £75,000. As we can see, if 10,000 users subscribe to my app, the unit economics will be positive. An alternative business model that could improve “Recetterie’s” unit economics would be the implementation of a subscription- based model, charging users a monthly subscription as opposed to a one-off payment. Another possibility would be to implement a “Freemium model” by which users under the free version of Recetterie could have access to a limited number of recipes and meals allowed to be accounted for, while those who pay for the more “premium” version of the app have unlimited access to the app's content. Additionally, the app could increase its revenue through the use of affiliate links by which every time an individual is guided to an online food store from a recipe on “Recetterie”, a small commission is received. SECTION 2 APPROACH TO GROWTH My food budgeting app “Recetterie" offers a cost-effective solution for people wishing to manage their food expenses.

However, achieving unicorn growth, characterised by a valuation exceeding 1 billion, will most probably be unlikely due to the rarity of ventures reaching this valuation.

Additionally, unicorns typically revolutionise and disrupt the market, challenging its status quo, something which my app “Recetterie” will not do. Furthermore, the food budgeting market does not exhibit the hyper-growth potential seen in other sectors such as, for instance, tech.

Moreover, indirect competition from existing apps or services such as Hello Fresh, Gousto, etc., along with potential challenges in large scale monetization and user acquisition costs, could limit the apps scalability.

Not to mention the fact that, in order for unicorns to succeed, they carry out blitz scaling, which requires very large amounts of funding which I most probably would.... »