Historically Underutilized Business Zone
Executive Summary
The U.S. Small Business Administration has modified a program that gives small businesses in "economically distressed" areas--including Des Moines' entire central business district--preference for federal contracts. Changes to the Historically Underutilized Business Zone, or HUBZone, program include extending eligibility to foreign-owned small businesses, as well as agricultural cooperatives and Indian tribes.
Created in 1997, the program has more than 11,000 participating small businesses registered across the country. In Iowa, 48 companies are currently registered as qualified HUBZone companies, a number that SBA officials in Des Moines say should increase as more companies become aware of the program.
Previously, small businesses within a HUBZone had to be at least 51 percent U.S.-owned to qualify. With the new legislation, announced Jan. 27, small businesses that are owned by non-citizens can now qualify. Indian tribes and agricultural cooperatives will also be able to apply. Those changes will "create more jobs and economic growth in economically depressed areas for small businesses, and stimulate growth in the nation's economy," SBA Administrator said in a news release. Other changes loosen HUBZone qualification limits for rural areas, and grandfathers in businesses that would otherwise have been dropped because they're located in areas no longer considered economically distressed (2005).
The U.S. Small Business Administration's HUBZone program has beefed up its website (), allowing those who qualify to apply on line and track the status of their applications. The site also has easier-to-follow pop-up menus with an online guide.
For this paper, a plan will be made utilizing the HUBZone Des Moines in creating new businesses as well as jobs for the residents of the area. The goal, SWOT analysis, and other aspects of the project will be discussed in the contents of this paper.
Introduction
A growing interest in small business personnel management is shared by personnel specialists and members of the small business community, as demonstrated by a number of recent articles in professional publications, some of which--like this journal--have devoted entire issues to the topic. In part, this interest may stem from employee concern for "quality of work life" and increasing legal constraints and directives from various government agencies. However, a more significant impetus for this surge of interest may be a concern for the part that personnel practices may play in small business success or failure (1984).
Startling statistics on small business failures have appeared regularly in the popular press. Surveys investigating the reasons for these failures have often placed personnel-related problems at or near the top of the list. A recent survey of small businesses in rural Texas, for example, found that personnel problems were by far the most frequently cited (44 percent of respondents). A 1970 survey conducted by Dun and Bradstreet similarly indicated that most of the business problems frequently cited by small business managers were personnel-related; furterhmore, 64 percent of these practitioners named personnel as the most serious business problem, when presented with an unranked list of eleven important business problems. Finally, a recent Roper Organization poll revealed that the most difficult problem for small busineses was "finding competent workers, then motivating them to perform.
Similar to the federal Empowerment Zone program, the Small Business Administration has created HUBZones, which encircle some of the most economically distressed areas in Norfolk and Portsmouth. The zones are designed to give small businesses inside them a better chance to get government contracts from the Navy, the Department of Transportation, NASA and other agencies ( 1999).
For example, HUBZone businesses will receive a bidding preference. A HUBZone offer will be considered lower than the offer of a nonzone, midsize or large business, providing that the HUBZone business' offer is not more than 10 percent higher (1999). Who qualifies are those companies which must be located in an area designated as a ``historically underutilized business zone'' and be owned and controlled by one or more U.S. citizens. In addition, at least 35 percent of its employees must reside in a HUBZone. HUBZone company can bid as much as 10 percent above the lowest bidder for a federal contract and still get the contract. HUBZones are located in nearly 8,000 areas across the country. Critics and some small-business owners are yelling foul over a proposed change by the Small Business Administration, which they say would hurt minority-owned businesses and virtually render obsolete a program that awards federal contracts to minority businesses.
Critics contend that could mean fewer contracts for minority business owners. Although minority-owned firms can qualify for other kinds of programs that provide business assistance, the program is the primary one that allows businesses to receive contracts earmarked specifically for minority-owned firms.
Critics of the regulation change contend the program, created in 1968, has been steadily eroded. In 1998, a white business owner's lawsuit alleging "reverse discrimination" spurred the program to relax its guidelines, allowing white business owners to qualify for the program if they can prove they face social and economic obstacles.
The SBA currently dictates that 2.5 percent of federal contract dollars should go to HUBZone companies, but there are no such goals for firms. Now that companies from both programs are eligible to compete for the same dollars, critics contend it's more likely the contracts will be awarded to HUBZone businesses.
Goal
The challenges facing small businesses in DesMoines are well known, as, unfortunately, are their failure rates. But a vital federal program for the last couple of years has given these businesses in distressed areas a much better chance to succeed through federal contracting preferences. This program, however, called the Historically Underutilized Business Zone, or HUBZone, is only useful if business owners know it's there and how to use it. The goal of this project is to therefore create a new business in the form of a theme park in the area of Des Moines so as to generate more jobs for people in this underutilized area.
Even though trade and financial linkages among countries may propagate and amplify economic disturbances internationally, they can help to dampen economic fluctuations when activity is unsynchronized. Economies in strong cyclical positions tend to stimulate activity in other economies in which demand is weaker, partly through movements in trade balances. This stabilizing role of trade flows is reinforced through divergences in financial conditions and changes in exchange rates. There is, in theory, a natural relationship between exchange rate movements and international divergences in activity, with the currencies of countries operating at relatively high levels of utilization, such as the United States recently, tending to appreciate as a result of favorable interest rate differentials vis-a-vis other currencies and also stronger profit performance vis-avis countries in weaker cyclical positions.
In this project, the HUBZones program, which is run by the U.S. Small Business Administration, will give this small business a competitive edge in bidding on federal contracts. But the firm must be willing to hire at least 35 percent of its employees from the zone.
SWOT Analysis
To formulate an effective strategy, senior management must take into account the distinctive competencies of the organizations, and they must scan the environment. They must determine what competitors are doing, or planning to do, and take that into account. They must critically examine other factors that could have either positive or negative effects. This is sometimes referred to as the SWOT approach and in the succeeding paragraphs will be applied to the situation in the planned theme park in Des Moines.
The new theme park knows its strengths - a hybrid of thrills and animals, fun and education - and sells them well. In contrast to other theme parks such as Disneyland, Disney is all about fantasy, cartoons, and castles. This new theme park is real. It has real animals, real fish.
Strengths:
Ø There are enough financial resources that are allocated for the operation of the park
Ø The government is prepared to provide support for half of the funding of the theme park’s development cost
Ø Appealing to the all age groups
Weaknesses:
Ø The theme park has to come up with more diverse attractions to lure visitors
Ø High prices may push potential visitors to competitors with affordable prices
Opportunities:
Ø Provide packages to increase visitors
Ø Growing market trend
Ø New competitors continually enter the market
Threats:
Ø The threat of not appealing to target market at all therefore generating a loss as opposed to profit
Ø Entry of new theme parks
Ø Vulnerability of the tourism cycle
Upon close examination of this industry, the researcher has assessed using Porter’s five forces model that firstly the competition in the specific industry is very strong as there are several numbers of rivals that can compete on one location as theme parks are a commodity and typically, there is also low switching cost upon opting for another theme park over another. In addition, these rivals may also introduce new items in their list of attractions or introduce a totally different attraction. It must also be noted that industry rivals can compete on price.
In terms of the threat for potential new entrants, the researcher has assessed that it is rather weak as it is very difficult to establish a chain which will serve as many international locations. Also, the cost of entry is very expensive especially is planning to expand globally. It must also be noted that it is also difficult to beat the brand name value of many theme parks such as Disneyland as it has been established and well-known for decades already.
Next, as for the bargaining power of buyers, the researcher has assessed that in the industry, it is very strong. As noted earlier, it is a relative commodity. Basically there are a lot of other theme parks to choose from because the market structure is competition. Moreover, the consumers or buyers usually have no incentive to be loyal. So what if they choose another theme park? Furthermore, switching cost or opting for another theme park is relatively low.
After that, the researcher has assessed that the bargaining power of suppliers is weak. Their suppliers are providing commodities with a market structure of strong competition as well; hence, there are still many suppliers to choose from. In addition, this competition among suppliers may facilitate driving down prices as well.
GANTT CHART
The Gantt chart below will show possibilities as to when the task process for the research will be completed. It is a useful tool for planning and scheduling projects. It assesses how long a project should take, determine the resources needed and lay out the order in which the task need to be carried out. In the Gantt chart presented, it shows that the researcher will have to meet every specific task with the purpose of completing the research study in line with the proposal study involved. Gantt charts are useful when the project under way. It helps in monitoring its progress and immediately sees what should have been achieve at a point in time, and can therefore take remedial actions to bring the project back on course.
RISKS
This paper has strongly recognized the importance of understanding strategic marketing planning for the benefits that it gives to the successful planning of marketing activities. There are also risks that during the course of the implementation are to be faced.
First, understanding competitors will facilitate the firm’s management to understand their competitive advantage and disadvantages in relation to their competitors. Second, understanding competitors will also generate understanding of the past, present and future strategies of the firm. Third, it offers the firm an informed basis to develop strategies in order to gain or maintain competitive advantage against their competitors in the future. Lastly, understanding competitors will also facilitate the firm in forecasting or predicting the financial returns that they made from future investments.
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