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Tapnet Business Plan Essay, Research Paper


Business Plan

December 11, 2000

Peter Bankuti

Table of Contents


1. TapNet Executive Summary 4

1.1 The Opportunity 4

1.2 The Application 4

1.3 The Need for Additional Capital 5

2. The Industry and TapNet’s Product(s) or Service(s) 5

2.1 The Trade Association Industry 5

2.2 TapNet Company and the Concept 7

2.2.1 Networking 7

2.2.2 News & Information 8

2.2.3 Ecommerce 8

2.2.4 Meetings 8

2.3 TapNet Product(s) or Service(s) 9

2.3.1 eManufacturing 9 Serving the customer 10 Valuable Capabilities 11 Management tools 13 Culture change 15 eManufacturing Summary 15

2.3.2 CRM 16 Evolution of CRM 17 Target Marketing 18

2.3.3 Customer Relationship Management 19 The Customer Relationship Management Cycle 20 Execute 21 Customer Relationship Management Summary 21 Business Drivers 22

2.3.4 Distance Education 22 What is the Process? 23 What do the Associations need to do? 24 What needs to be put in place? 24 Distance Education Summary 26

3. Market Research and Analysis 26

3.1 Customers 26

3.1.1 Computers & Internet (35) 27

3.1.2 Education (26) 27

3.1.3 Health & Medical Sciences (9) 27

3.1.4 Law, Government & Political Science (10) 28

3.1.5 Science & Technology (41) 28

3.2 Market Size and Trends 28

3.2.1 Increase Revenues 29

3.2.2 Be your industry’s portal 29

3.2.3 Provide e-commerce sites 29

3.2.4 Create an Internet Community 30

3.3 Competition 30

4. Marketing Plan 30

4.1 Overall Marketing Strategy 30

4.2 Pricing 31

4.3 Sales Tactics and Promotion 31

4.4 Advertising 32

5. Design and Development Plans 32

5.1 Development Status and Tasks 32

5.2 Difficulties and Risks 33

5.3 Proprietary Issues 34

6. The Financial Plan 34

6.1 Actual Income Statements and Balance Sheets 34

6.1.1 Expenses 34

6.1.2 Revenue 34

6.1.3 Staffing 35

6.1.4 Technology 35

7. Proposed Company Offering 36

7.1 Proposed Company Offering 36

7.2 Desired Financing 36

7.3 Capitalization 36

7.4 Investors Return 37

7.5 Exit Strategy 37

TapNet Executive Summary

TapNet.com (Trade Association Portal) represents a tremendous opportunity for it’s directors, partners and potential stockholders.

1.1 The Opportunity

The Internet and specifically business-to business applications are expanding at a tremendous rate. Many companies and associations are entering this portal area to provide valuable products services to the industry and generate economic profit at the same time. TapNet’s Board of Directors saw this opportunity about year ago and has been fine tuning their concept and approach. Since this time, TapNet has moved forward and further developed the concept, gathered content and interacted with hundreds of potential customers around the world and gained their support.

1.2 The Application

TapNet is more than a website or portal, it is an Internet based application that supports the trade association’s business operations, offers buyers and sellers the chance to find each other, interact and eventually purchase products and services on-line. TapNet provides these core competencies and capabilities to trade association, many of which could not afford these required business capabilities without TapNet as their provider. TapNet provides the foundation for a dominating site that drives the industry rather than just responding to it.

TapNet plans to continue development of both its technology and the information resources it offers. This will be accomplished by developing buyer guide matrixes for associations to list their information, developing TapNet enabling features and functions, and by providing content and interaction that truly bring the trade association community closer together. TapNet will also provide a strong marketing program to generate awareness that explains the advantages of TapNet to its potential customers.

1.3 The Need for Additional Capital

Currently TapNet has been funded by the resources from it Board of Director’s. In order to truly develop a leading application site for the trade association, TapNet will require a tremendous infusion of additional operating capital. This capital will allow the development of new software technology, and provide the extensive promotional campaign that will be needed to accompany the site. Although the site could continue to be funded by the directors, there is tremendous opportunity for risk and profit sharing. Both the financial markets, as well as the American economy recognize the value of being able to build and service an “eCommunity” based on industry focus. Therefore, TapNet proposes to reform itself into a publicly held corporation, and reach out to these financial markets for capital required to become the leading online Resource for the Trade Association.

2. The Industry and TapNet’s Product(s) and Service(s)

2.1 The Trade Association Industry

Trade associations are organizations of businesspeople engaged in furthering or protecting their mutual interests. Associations include professional, business, technical, and civic societies.

Trade associations are believed to have existed in ancient Egypt and China. In Europe they came to prominence during the Renaissance when Venetian and other traders formed organizations for solving mutual political and financial problems. Present-day associations are derived chiefly from the merchant guilds of 16th-century England.

The oldest extant association in the U.S. is the Chamber of Commerce of the State of New York, which was established by 20 merchants in 1768. Almost as old is the New York Stock Exchange, which was formed in 1792. Early American trade associations were local or regional in extent, with national associations emerging only after the American Civil War. By 1890 they had been formed in most well established industries, and by 1900 they had spread throughout the industrial community. In more recent years there has been a rapid growth of trade associations of employers in the U.S. formed to deal with mutual problems.

A trade association may serve commercial, industrial, or protective functions. Among its main activities are the surveillance of important trade influences, such as legislation, transportation rates, tariffs, laws affecting labor, and the quality, method of sale, or inspection of goods. Associations may also seek to keep their members informed of new processes or inventions and of market conditions. Other functions include insurance arrangements, encouragement of trade schools, and establishment of selling agencies. Trade associations also maintain bureaus of employment.

There are a large number of trade associations in the U.S. Of these, approximately 2000 have an online presence which runs the gamut between simple information based web pages to full service association web sites.

2.2 TapNet Company and the Concept

Vortals, vertical portals and online hubs, as they’re known, are a focus of the Internet. Some estimates predict the number of these sites will reach 25,000 by 2,001. Others estimate the business-to-business segment of the Internet to reach $1.3 trillion by 2003.

These business-to-business web sites are creating online communities focused on individual industries or professions. The effectiveness of these sites and usefulness demands that eventually each industry will end up with one predominant portal. TapNet seeks to help professional trade associations create these portals.

The convenience, speed and timeliness of the Internet is going to make it the pre-imminent vehicle for networking, news and information, commerce, and association meetings.

2.2.1 Networking

The Internet provides the means for the ultimate networking – reaching everyone, anytime, anywhere. Members can communicate instantly to seek help, ask the question, or just chat. Staying informed on issues, problems, or matters they might not have even been aware of. Enabling networking applications include:

 Email & List Serve functionality

 Bulletin Boards and Live Chat

 Member Profiles

 Product Listings

 Lead Generation

2.2.2 News & Information

An association portal provides a centralized location where members can receive the most recent news and information. News and information applications include:

 Help Wanted and Classifieds

 Links to related web sites

 On-line Calendar

 New Products

 Press Releases

 Industry Events

 Industry Profiles

2.2.3 Ecommerce

An eCommerce enabled portal allows association members to sell their products and services no other association members as well as to the association customers. Ecommerce applications include:

 Online Storefront programs

 Promotion of Member Business

 Product Listings

 Lead Generation

2.2.4 Meetings

Online portals allow associations to extend the physical meeting place beyond the actual brick and mortar confines of the meeting place. Such access promotes increased attendance and associated member input and accountability. Meeting applications include:

 Meeting Pre-registration

 Exhibit Information and Registration

 Program Descriptions

 Course/Events and Schedules

 Course Registration Directory

 On-line Courses

 Company Profiles

 Customer Relationship Management (CRM)

 Banner Advertising

 Sponsorships

 eManufactureing

 RFP’s and RFQ’s

2.3 TapNet Product(s) or Service(s)

TapNet is going to provide all of the portal services listed above, but we are going to differentiate our product offering by taking advantage of the broadband network to offer services that leverage the high-speed capacities. Specifically, TapNet is going to focus on three key application offerings: eManufacturing, Customer Relationship Management (CRM), and Distance Education.

2.3.1 eManufacturing

Production is beginning to use it to synchronize manufacturing rhythms and efficiencies with those of the supply chain. The scheme ranged from raw electrical power and distribution through device sensors and actuators, programmable logic controllers, and network and integration services. It is a way to potential link the millions of devices on plant floors that run on software yet are not capable of being connected to Ethernet, the emerging lingua franca of factory networks.

“The need for an eManufacturing response begins as soon as a company decides to accept an order from the Internet,” says Lanny Metcalf, Schneider’s Transparent Factory product manager. “By doing that, you’ve initiated the process of totally changing your whole philosophy of doing business. And to succeed, the entire business process needs to be reevaluated-including manufacturing.

“Overlaying some Internet technology is not enough. Strategic errors are being made if the presumption is that the business impact of the Internet stops with buying raw materials, collaborating with business partners, and delivering customer products and services,” adds Metcalf. Serving the customer

eManufacturing is driven by the new prominence of the customer, says analyst Leif Erikson, research director, manufacturing/e-business, AMR Research Inc., Boston. “The customer is still king, but manufacturers need to realize that in e-business the king has far more power and [providing satisfaction] requires much greater responsiveness from the production floor. For example, there’s got to be some way of determining instantaneously, in real time, the ability to fulfill an order profitably. In eManufacturing, capacity and inventories need to be visible to the supply chain.

Manufacturers need systems that can reveal available capacity, status of orders, and quality of a product — not just after it comes off the line, but while it is in process.” “Since e-business is really about connecting more closely with customers, operations across the enterprise, including the plant floor, must be synchronized,” says Dick Hill, vice president of ARC Advisory Group, Dedham, Mass. “Due to the collaborative nature of e-business strategies, the plant floor has to be a full collaborative partner in the entire e-business architecture. Otherwise, ineffective plant controls quickly become the visible bottleneck,” he adds.

Metcalf emphasizes eManufacturing’s competitive significance: “An e-enabled plant has as much or more strategic potential to cut costs and improve efficiencies as any innovation in purchasing or sales. Making that possible is a new generation of Internet-compatible equipment, including everything from PLCs with embedded Web servers to power-monitoring systems that can identify cost-effectiveManufacturing locations for big orders.”

He recommends beginning the eManufacturing journey by recognizing the need for creating a seamless flow of information from the factory floor. He suggests an opening question: “What are the number of interfaces that exist between your business systems-such as planning and inventory systems? If the answer is one, the enterprise is well on its way to the kind of integration that’s needed. If there are five different systems with five different interfaces, then you’re just beginning. Each interface represents potential for data corruption mistakes to occur.”

Metcalf suggests emulating the cost-cutting justification used when purchasing departments adopted electronic procurement. “Plants have an equally strong cost-saving story to tell, particularly in terms of predictive maintenance, remote diagnostics, and utility cost savings.” He explains that many devices with an embedded Web server are able to communicate proactively. That means that if it breaks-or reaches certain preset parameters that indicate it is about to break-it can ask for help.” His examples: LVDO circuit breakers from Schneider Electric’s Square D brand include a contact-wear indicator that alerts operators before the breaker fails; and the company’s motor starters keep track of bearing wear, temperature fluctuations, and vibration levels. Valuable Capabilities

What’s possible today, says Metcalf, goes beyond sounding an alarm or an indicator light. The possibilities include initiating e-mail or signaling a pager at the OEM, the maintenance department, or contractor to describe the specific problem and request service and parts. Still, manufacturers either are not aware of these capabilities or they haven’t been sold on their value. For example, consider the experience of Cincinnati Machine, Cincinnati, a unit of UNOVA Inc. The company, a manufacturer of CNC machine tools, has had a remote access feature on its Cincron cell controller since 1998, yet only four or five customers have specified the option, says Ken Wichman, product manager for cell and small horizontal machining centers. The beta site for the feature was Winterville Machine Works, Winterville, N.C., a subcontractor for Caterpillar and similar companies. Aerospace companies also are using the feature.

Called JACK, an acronym for Java Access to Cincron Knowledge, the remote access feature is used by Winterville to eliminate the need for running down to the plant floor every time information is needed from the cell controller.

“Without leaving their respective offices, the plant manager can generate a utilization report, a foreman can check the status of a hot job, and a maintenance technician can check a machine fault,” says Wichman. Users can have access to a wide range of process information and report functions. These include graphical, dynamic cell-status display; graphical in-cycle time display; and Cincron reports on fixtures, NC programs, source routes, stations, tools, and workloads. JACK also allows users to import/export NC programs, tool data, workloads, and routes. Operator-to-operator messaging also is possible. Up to five PCs can be “talking” to a Cincron cell simultaneously with the JACK feature. Although the option can be used for Internet/intranet access to a machine tool from outside the plant, Wichman knows of no implementations. JACK operates off Microsoft Internet Explorer. The browser is the gateway to the Cincron cell controller, adds Wichman.

The machine tool company also has a telephone-based maintenance service called Interactive Techsupport. At the request of the machine tool user, it allows the Cincinnati technical support specialist to connect with the CNC unit via a standard modem. Video, voice, and data are transferred bidirectionally to allow a fully interactive session between the machine-tool user and the technical-support specialist, says Wichman.

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