Student ID 000000 Last name Business Capstone Business plan Version page 1

Alpha Computer Group Business Plan

First name I. Last name

Computer Hardware, Software and Related Services

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A. Executive Summary.............................................................................................................................................4

A1. Company Identification.......................................................................................................................................4

A2. The mission of the Company...............................................................................................................................4

A3. Business Goals.....................................................................................................................................................4

A4. Keys to Success...................................................................................................................................................4

B. Company Summary.............................................................................................................................................5

B1. Industry History...................................................................................................................................................5

B2. Legal Form of Ownership....................................................................................................................................5

B3. Location and Facilities.........................................................................................................................................5

B4. Management Structure.........................................................................................................................................5

B5. Products and Services..........................................................................................................................................5

C. Market Analysis...................................................................................................................................................6

C1. Target Market......................................................................................................................................................6

C2. Industry Analysis................................................................................................................................................6

C3. SWOT Analysis..................................................................................................................................................7

D. Market Strategy.......................................................................................................................................................8

D1. 4Ps.......................................................................................................................................................................8

D2. Price List.............................................................................................................................................................8

D3. Promotional Strategy..........................................................................................................................................8

D4. Sales Forecast.....................................................................................................................................................8

E. Implementation Strategy.........................................................................................................................................9

E1. Overall Strategy...................................................................................................................................................9

E2. Monitoring Plan...................................................................................................................................................9

F. Financial Statements and Projections..................................................................................................................10

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F1. Forecasted Profit and Loss Statement................................................................................................................10

F2. Forecasted Balance Sheet...................................................................................................................................10

G. Financial Report....................................................................................................................................................11

G1. Financial Projections.........................................................................................................................................11

G2. Financial Position..............................................................................................................................................11

G3. Estimated Capital/Investment Needs.................................................................................................................11

H. References.............................................................................................................................................................12
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A. Executive Summary

Company Identification

Alpha Computer Group is a U.S-based informational technology company headquartered

in Columbus, Ohio. As a start-up, the company is projected to provide a wide array of hardware

components, software, and related services to different consumer segments and grow to compete

with leading computer companies in the U.S. The company is set to offer both computer

products and services to large enterprises, government agencies, small and medium-sized

businesses, and individual customers.

The mission of the Company

The mission of Alpha Computer Group is to earn customer respect and loyalty by

providing computer products and services of the highest quality and value. The company aims to

serve customers as a trusted ally by offering them solutions that they need to run their businesses

with maximum efficiency and reliability. The company aims to be a market leader by developing

and availing useful innovative computer products, services, and solutions. Alpha Computer

Group is set to realize its mission statement by committing to employees and being global

leaders. It demonstrates a commitment to employees by promoting and rewarding them based on

performance as well as by creating and maintaining a work environment that reflects its values.

This IT company fulfills its responsibility to society by being a social, intellectual, and economic

asset to the country and the community where it does its business.

Business Goals

The business goals of Alpha Computer Group are to be leaders in the market and achieve

significant growth. The company aims to achieve the first goal by developing an ecosystem of

stakeholders that support its operations. Concisely, the company's objective is to manufacture
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stellar computer products and services at a cost that represents the best value to customers and

shareholders. As a start-up, the company identifies and seizes opportunities for growth that

builds upon competencies and strengths. It leverages leadership capabilities to achieve business

results, demonstrates corporate values, and leads to success for the company to grow.

Keys to Success

The three key ways to success include providing innovative computer hardware and

software solutions, demonstrating a commitment to employees by considering them as the most

significant asset, and increasing the company’s software and service sales to 30% of total sales

by the second year.

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B. Company Summary

Industry History

The computer hardware, software, and IT services are characterized by IT companies that

manufacture and sell all forms of computers such as laptops, desktops, tablets, palmtops, and

software as well as accessories such as scanners, printers, and keyboards (Bradley, 2019). Key

players that include Hewlett-Packard, Apple Inc., Dell Inc., Cisco Systems, Inc., International

Business Corporation, Samsung Electronics, Lenovo Group Limited, and many other IT

corporations dominate this industry. This industry is marked by generations whereby the first

generation of computers entailed using vacuum tubes that contributed to their characteristic huge

size. This period began in the late 1940s and ended in the mid-1950s. The second generation that

started in the late 1950s to early 1960s is characterized by the incorporation of large vacuum

tubes that led to smaller, more efficient, and inexpensive laptops (Bradley, 2019). This period is

also characterized by the development of programming languages that resulted in greater

flexibility. The generation led to the growth of new jobs since software developers and

programmers emerged.

The third generation that began in the mid-1960s and lasted up to 1971 was characterized

by innovation as the semiconductor replaced the use of transistors, thereby significantly reducing

heating as well as the size of the computer. Another significant development was the innovation

of the operating system that was used to control other programs in computers. Additionally, two

Dartmouth professors developed a new programming language known as the Basic. The fourth

generation of computers that was marked by the design of integrated circuits started in 1971 and

progressed into the 1990s (Bradley, 2019). These innovations resulted in the reduction of the size

of computers as well as the price. In 1975, Micro Instrumentation and Telemetry Systems
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developed the Altair 8800, the first personal computer to be manufactured. IBM also released its

personal computer in 1981. This version featured the use of Microsoft’s Disk Operating system.

Bill Gates of Microsoft, a prominent software corporation, developed this system. In 1984,

Apple also improved Macintosh. The production of computers during the fourth generation

increased, and by 1986, there were more than 30 million computers in the U.S (Bradley, 2019).

The development of computer software also marked the fourth-generation period.

Microsoft developed the Window, and by 1998, Windows had become a popular operating

system because of the graphic that enhanced the user interface and increased user experience.

Other innovative software that was developed during this period included computer games,

notably Riven. An English and computer scientist developed an invention that revolutionized the

use of computers. In 1989, he invented the World Wide Web or the Internet by creating a system

of hyperlinks that could access similar sets of information (Bradley, 2019). This system was

further developed and incorporated into the Internet, significantly enhancing the sharing of

information. Internet users vastly increased in the 1990s, and by 1998, around five million

people worldwide were using the Internet. Significant trends in the industry that were

experienced in the industry during the 1990s involved the lease or rental options on computer

systems and e-commerce where customers could search online catalogs to place orders of goods.

At the turn of the 21st century, the industry experienced a significant shift towards an

increase in demand and use of personal computers. The growth in demand for personal

computers increased from 152 million units in 2002 to 271 million in 2007. The largest PC

markets were Europe, Asia, Latin America, and Africa. During this period, global PC vendors

were HP, Dell, Toshiba, and Lenovo (Bradley, 2019). The driving forces behind the surge of the

PC market were rapid price reductions, growth of emerging markets, and high demand for
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laptops. The new technology and innovative designs that led to the development of mobile PCs,

i.e., laptops and the Wireless LAN expansion, supported the increasing demand for personal

computers. Another factor that is vital in the market of PCs was rapid economic growth that also

increased the number of computer users in emerging markets such as Latin America and Africa

(Bradley, 2019).

Legal Form of Ownership

The legal form of ownership of Alpha Computer Group is an S corporation. This is a type

of corporation that meets the requirements of the Internal Revenue Code. The conditions permit

a company with 100 shareholders or less than the advantage of incorporating but being taxed

similarly as a partnership (Miranda Lee, 2012). Therefore, Alpha Computer Group will avoid

double taxation bypassing the income directly to shareholders. The founders of this start-up

chose this form of legal ownership to establish credibility with prospective investors, employees,

customers, and suppliers by demonstrating the formal commitment to the industry. Additionally,

the start-up will not pay federal file taxes at the entity level, thereby allowing it to save money

and invest in IT projects. Other benefits associated with this type of legal ownership include

compliance with complicated accounting rules, the capability to adjust property basis, and

transference of interest without facing negative tax consequences (Miranda Lee, 2012). This

legal structure will also make the start-up attractive to shareholders, as they will be able to earn

corporate dividends tax-free as well as earn salaries like company employees. Demerits of the

legal form of ownership include scrutiny by the IRS since the company can disguise salaries

corporate distribution to the filing of payroll taxes.

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Location and Facilities

Alpha Computer Group will secure a standard store facility in the central business district

in W. Main St. Columbus, Ohio. The premises will be the company’s headquarters. Since the

assembly process will be outsourced to third parties in India and Taiwan, storage facilities will

be located outside the Columbus city to save on overhead costs such as rent.

Management Structure

The management structure at Alpha Company Group will include shareholders at the top

followed by an executive management team that consists of the chief executive officer (CEO),

chief of operations (COO), director of research and development, and the human resource

manager. Employees include a team of four computer engineers and three technicians. The CEO,

Tim Miller, is also the founder of the company. His roles and responsibilities include creating

and leading the executive team, developing the strategic plan, attracting investors, giving the

company direction, modeling and promoting the company's culture and values, and allocating

capital to the company's priorities.

The COO is second in command and reports to the CEO. The COO's roles and

responsibilities are to oversee the company's daily operational and administrative functions. Mid-

level managers include the director of research and development and the head of the human

resource. The roles and responsibilities of the former involve directing and implementing the

company's research and development initiatives, objectives, and policies. He works closely with

the executive team and makes recommendations based on product market performance and

research findings. Lastly, the roles of human resource managers include overseeing the seamless

running of the HR and administrative tasks of the company.

Product and Services

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Alpha Computer Group is established with the business objective of meeting the IT needs

of consumers and maximizing profits in the industry. Products offered by the company include

all computer hardware and software. Service provided includes IT design, integration and

maintenance, and support of technological infrastructures. The company also offers technology

and business consulting services (Fosfuri & Giarratana, 2004).

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C. Market Analysis

Target Market

As a start-up, Alpha Computer Group's target market is local markets, small and medium

businesses, and home offices. Notably, the company focuses on 5-50unit small offices and high-

end home officers. However, the company's long-term goal is to focus on government agencies

in the provision of IT services consultancy. The company has selected a market segmentation of

small and medium-level businesses because it is still in its early phases of growth and aims to

use these customers to build a reputation in the market. Additionally, the company is not

financially viable to handle large IT projects. Therefore, the Alpha Computer Group's ideal target

market has 5-50 employees with a work station of 5-20 units tied in a shared local area network

(Fosfuri & Giarratana, 2004). This target market analysis defines high-end home office as a

business that warrants its owners to pay attention to high quality IT management, implying that

they have to set aside a budget for IT maintenance and support. These are not home offices that

are used only for part-time, but fully functioning offices with telecommunication and computing

infrastructure that allows owners to carry out their duties as if they are at their places of work.

Industry Analysis

One major trend that is difficult to pass without noticing in the computer sales industry is

that computers have become essential personal and household products. High economic growth

in both developed and emerging worlds, technological development, a highly globalized supply

chain, and enhanced production efficiency have contributed to reduced retail prices of computer

hardware, software, and related services. Additionally, the increased adoption of e-commerce has

contributed to the reduction in customer traffic in stores leading to shoppers leaning towards

online shopping. Besides using their smartphone devices to check products and place online
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orders, laptops have come in handy because of the challenging user experience of some online

shop websites. Digitalization has also led to all small, medium, and large companies using

computers to conduct business.

The above factors reveal the computer industry has grown, and it is expected to continue

growing as technology advances. Therefore, computer hardware and software is a large industry

across the globe. In the United States, there are 30.7 million small businesses. According to the

Small Business Administration (SBA), small companies are firms that have less than 500

employees (Jerraya & Wolf, 2005). The European Union defines small business as firms that

have less than 50 employees. These small businesses are the potential customers of around

18,173 registered computer-manufacturing corporations across the U.S. This industry is

responsible for employing more than 90, 000 people, and generating $29 billion yearly. In the

next five years, the industry is projected to enjoy a growth of -0.4% per year, with major players

such as HP and Apple, Inc., contributing significantly to this growth.

In 2017, the sale of computer hardware, software, and related services accounted for an

estimated 44% of revenue. Laptops are product segments that accounted for a large percentage of

these sales as they continually outpaced desktops (Jerraya & Wolf, 2005). The majority of

computer users prefer laptops to desktops due to their portability, increased by the augmented

wireless data infrastructure. Nonetheless, desktops still occupy a niche market, particularly

among organizations. Overall, this industry is characterized by a low level of market share

concentration. Although large corporations such as HP command significant market shares,

revenue is also spread to small companies; therefore, Alpha Computer group is projected to

succeed (Jerraya & Wolf, 2005).

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C3. SWOT Analysis:

S (Strengths) W (Weaknesses)

1. Product innovation 1.High operational costs

2. Power of workforce 2. Lack of adequate funding

3.Diversified product portfolio 3. The company will take time to break

into the business.

O (Opportunities) T (Threats)

1.Aggressive marketing strategies 1.Competition

2.Diversification 2.Regulatory pressures

3. Global expansion 3.Increasing costs of raw materials and

labor

Strengths

Alpha Computer Group enjoys three strengths, including product innovation, workforce

power, and diversified product portfolio. One reason behind the company's establishment is

focusing on research and innovation. The company aims to offer products and services of high

productivity and performance. The research and development department is dedicated to product

innovation and development. The core strength of Alpha Computer Group is the workforce. The

company has a pool of talented, innovative engineers and technicians who deliver the best

products on the market. Lastly, the company has a diversified product portfolio as it does not
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only produce persona computers but also sells software and provides IT consultancy services to

other companies.

Weaknesses

The company's significant weaknesses include high operational costs, lack of adequate

capital to support projects, and low presence in the market. The operating costs in the industry

keep going because of technological innovations. Alpha Computer Groups suffers this weakness

because it is still a start-up and lacks adequate capital to finance its IT projects. Another

weakness is that the company has a low presence in the market, as it is still new. This affects its

profitability compared to other small IT companies that have a good reputation in the market.

Opportunities

Alpha Group Company has three opportunities to exploit in the market, including the

implementation of aggressive marketing practices, product diversification, and global expansion.

Aggressive marketing strategies such as targeted telemarketing, distribution of printed materials,

and hiring of lead generation team will allow the company to communicate with customers and

pursue their engagement directly. Another opportunity that Alpha Computer Group can seize to

increase its competitive advantage is product diversification. Diversifying the product portfolio

by including other products such as tablets and phones can help achieve fast growth and increase

sales and revenue. Lastly, Alpha Computer Group has an opportunity to expand its market by

targeting emerging markets such as Africa. This opportunity will not only increase the customer

base but also diversify risks.

Threats
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Alpha Computer Group faces a threat of high-level competition in the industry. There are

significant rivals in the industry, including Apple, HP, AND Dell, that are not only focused on

innovation but also command a significant market share. Another threat is regulatory pressure

from the government and regulatory agencies. The high level of oversight makes it difficult to

achieve faster growth and hurts performance. Lastly, increasing costs of raw materials and labor

threatens the profitability of the company. This has forced the company to outsource critical

functions to cut costs.

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D. Market Strategy

4Ps

The marketing mix strategy (4P) analyzes the brand of Alpha Computer Group by

covering four aspects: product, price, place, and promotion. This marketing mix strategy will

help the company to realize its business goals and objectives.

Product

The category of products offered by Alpha Computer Group in its marketing mix

includes all computer hardware and software. Key products include desktop computers, laptops,

printers, scanners, and PDAs. Service provided includes IT design, integration and maintenance,

and support of technological infrastructures (Illiashenko & Rud, 2020). The company also offers

technology and business consulting services. Types of printers that will be sold by the company

include Color Laser Printers, Black and White Laser Printers, and Inkjet all-in-one printers. The

computes that will be sold are categorized based on usage, i.e., office, personal, and high

volume. Popular brands that will be offered on the market include the Alpha Book, Alpha Series,

and Alpha Slate.

Price

Alpha Computer Group provides a diversified product portfolio, and therefore, it uses

different pricing in its marketing mix. It avails diverse computer hardware and software as well

as related computer services. Thus, the company employs a fair pricing strategy by charging

customers based on its quality and know-how in the software and hardware fields (Illiashenko &

Rud, 2020). In addition to using this pricing strategy to fight competition, the product's

performance and quality are set to attract customers. New products with innovative technologies

that will be rolled in the market will be charged at premium prices.

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Place

Alpha Company Group is still a start-up, and its presence is limited only in the United

States. Since it is still a small company, it will sell its products both directly and indirectly. The

company has exclusive stores of its products and brand retailers. Online services and software

provider also has an online portal where hardware, software, and related services can be

purchased from the company's website and affiliated retailer's websites (Faisal, 2016). The

company's continued growth is expected to attract partners who will also act as product and

service centers. Alpha Computer Group connects with other parts of its supply chain through

suppliers, logistics, manufacturers, and intermediaries.

Promotion

The aggressive marketing strategy that Alpha Computer Group employs in its marketing

mix is 360 branding. The company has ad campaigns distributed across different media,

including websites, TV, social media, billboards, newspapers, and magazines.

Price List

 The cost of Alpha Series Computer is $500

 The cost of Alpha Slate Compute is $350

 The cost of desktop computers is $ 250

 The cost of a printer is $ 10,000

 The cost of a scanner is $450

Promotional Strategy

At the start of the year, the company launched a promotional campaign Alpha Products to

resonate that image of the company to the high quality, innovative hardware and software
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solutions. The campaign is well integrated into the company's outdoor and website campaigns.

Future promotional strategies that the company seeks to implement include an exchange program

that will permit the exchange of old products for new ones. Lastly, the management of the

company anticipates sponsoring major sports events like the company's revenue increases.

Sales Forecast

The management of Alpha Computer Group is confident that this venture has many

customers because of the increased use of personal computers. The company is positioned to

acquire a significant market size in the U.S., and the team of senior executives is optimistic that

the company will meet its target of creating enough revenue from the first year of operations.

The marketing division in the company has scrutinized the computer sales market and

evaluated the financial viability of the company in the industry to develop the sales forecast. The

sales projections are founded on information collected in the market and assumptions related to

similar IT start-ups in the U.S.

 First Year: $75,300

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E. Implementation Strategy

Overall Strategy

The local market is an important growing market segment. The strategy pyramid of the

company entails emphasizing the sale of computer hardware and software and the provision of

IT services and support. The vital services that will be provided to customers include the internal

training of staff. The company's second strategy is an emphasis on relationships. In addition, this

will be the company's marketing strategy that will have regular contact with clients and increase

sales per customer. Programs for implementing this strategy include direct mail, callback after

the delivery of service of purchase of products, and sales management. Programs for improving

sales per customer include sales training and mailings.

Monitoring Plan

The company’s monitoring plans will lean towards quality control and customer

satisfaction because it is still a startup, and it needs to acquire a loyal customer base before

focusing on other metrics of success. Alpha Computer Group defines quality based on core

attributes: uniformity, predictability, reliability, and consistency, as well as from the perspective

of a customer. Therefore, quality control of products and services offered in the company will be

monitored based on efficiency and value delivered to customers.

On the other hand, customer satisfaction scores will be measured based on customer

satisfaction scores (CSAT). This time-tested metric will target customer variations with

necessary measures such as rating the experience with customer products. The advantage

associated with this measure is that it can relate to any customer interactions with the company.

Another advantage is that it collects precise feedback relative to specific experiences such as the
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launch of new products or after-sales service. Therefore, Alpha Computer Group will use CSAT

to monitor short-term change customer satisfaction after the launch of new products or services.
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F. Financial Statements and Projections

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G. Financial Report

Financial Projections

The projected balance sheet is stable since it does not project any challenges in meeting

the company's financial goals during the initial year. However, this is dependent on the company

meeting its sales goals and specific objectives. Additionally, this stability is dependent on three

assumptions. The first assumption is that there will be rapid growth in the economy, and

consumers will have excess cash to spend. The second assumption is that there will be a

disruptive technology in the industry that makes products nearly obsolete. The third assumption

is the company is an S corporation. Therefore, Alpha Computer Group will avoid double taxation

bypassing the income directly to shareholders.

Financial Position

At the end of the first year, Alpha Computer Group will be having a net profit of $75,300.

To improve the situation the company must improve various factors that affect the cash flow.

First, the company must create better inventory management to improve the turn. This will be an

element in the shift leaning towards service revenue to backup hardware revenues. The second

aspect is to increase the gross margin, and this will be associated with enhancing the mix

between service revenues and hardware revenues. This is because service revenues provide

better margins.

Estimated Capital/ Investment Needs

Initial capital needs include rent, insurance, utilities, cost of leased equipment, and

administrative costs. On the other hand, future capital needs funds required to renew, repair, or

replace assets for the continuation of functions.

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H. References

Bradley, D. (2019). A Personal History of the IBM Personal Computer. Computer, 1-1.

https://doi.org/10.1109/mc.2011.163

Faisal, A. (2016). Marketing Strategies in Online/Digital Marketing. Account and Financial

Management Journal. https://doi.org/10.18535/afmj/v1i8.01

Fosfuri, A., & Giarratana, M. (2004). Product Strategies and Startups' Survival in Turbulent

Industries: Evidence from the Security Software Industry. SSRN Electronic Journal.

https://doi.org/10.2139/ssrn.609801

Illiashenko, S., & Rud, M. (2020). APPROACHES TO CREATING MARKETING

INNOVATIONS IN THE 4P MARKETING COMPLEX SYSTEM. Odessa National

University Herald. Economy, 25(1(80). https://doi.org/10.32782/2304-0920/1-80-20

Jerraya, A., & Wolf, W. (2005). Hardware/software interface codesign for embedded systems.

Computer, 38(2), 63-69. https://doi.org/10.1109/mc.2005.61

Meghisan, G., & Burger-Helmchen, T. (2017). Meta-analysis in marketing research. Innovative

Marketing, 13(1), 6-10. https://doi.org/10.21511/im.13 (1).2017.01

Miranda Lee Reality Torn. (2012). Corporations! Critical Quarterly, 54(2), 61-61.

https://doi.org/10.1111/j.1467-8705.2012.02056_8.x