It is contain all about Generation of ideas, How to monitoring the environment, corporate appraisal, Profit potential of industries, Porter Models, Scouting of projects ideas, preliminary Screening, Project rating Index, sources of Positive Net present Value, On being an Entrepreneur
2. Topics To Be Discussed
Generation Of ideas
Monitoring The Environment
Corporate Appraisal
Profit Potential Of Industries : Porter
Model
Scouting of Project Ideas
Preliminary Screening
Project Rating Index
Sources Of Positive Net Present Value
On Being An Entrepreneur
3. Generation Of Ideas
Most of the project
ideas involve
combining
existing fields of
technology or
offering variants
of present product
or services.
4. Stimulating The Flow of
ideas
SWOT Analysis
Clear Articulation Of Objectives
Cost reduction
Productivity improvement
Increase in capacity utilization
Improvement in contribution margin
Expansion into promising field
A clear articulation and prioritization of objectives
helps in channelizing the efforts of employees and
production them to think more imaginatively
6. Monitoring The Environment
Firm must systematically monitor the
environment and access its competitive
abilities. For the purpose of monitoring,
the business environment may be divided
into six categories:-
Economic sector
Governmental sector
Technological sector
Socio-demographic sector
Competition sector
Supplier sector
7. Economic Sector
State Of The Economy
Overall Rate Of growth
Growth rate of primary , secondary
and tertiary sector
Cyclical fluctuation
Linkage with the world economy
Trade surplus / deficit
Balance payment situation
8. Governmental Sector
Industry Policy
Government Plans and Projects
Tax Framework
Subsidies, incentives and
concessions
Import and export policies
Financing norms
Lending conditions of financial
institutions and commercial banks
9. Technological Sector
Emergence of new technologies
Access to technical know how,
foreign as well as indigenous
Receptiveness on the part of
industries
11. Competition Sector
Number of firms in the industry and
the market share of the top few ( four
or few)
Degree of homogeneity and
differentiation among products
Entry barrier
Comparison with substitutes in term
of quality, price, appeal and
functional performance
Marketing policies and practices
12. Supplier Sectors
Availability and cost of raw materials
and sub assemblies
Availability and cost of energy
Availability and cost of money
13. Corporate Appraisal
A realistic appraisal of corporate strength
and weakness is essential for identifying
investment opportunities which can be
profitably exploited. The broad and
important aspects are:-
Marketing and Distribution
Production and Operations
Research and Development
Corporate Resource And Personnel
Finance and Accounting
14. Marketing and
Distribution
Market Image
Product line
Market Share
Distribution network
Customer Loyalty
Marketing and distribution
15. Production And
Operations
Condition and Capacity of plant and
machinery
Availability of raw materials, sub-
assemblies and powers
Degree of vertical integration
Location advantage
Cost structure
16. Research and
Development
Research capabilities of the firm
Track record of new product
development
Laboratories and testing facilities
Coordination between research and
operations
17. Corporate Resources and
Personnel
Corporate Image
Clout with governmental and
regulatory agencies
Dynamism of top management
Competence and commitment of
employees
State of industrial relations
18. Finance And Accounting
Financial leverage and borrowing
capacity
Cost of Capital
Tax Situation
Relations with shareholders and
creditors
Accounting and control system
Cash flow and liquidity
19. Profit Potential Of Industries:
Porter Model
Profit potential of an industry depends
on the combined strength of the
following five basic competitive
forces:-
Threats of new entrants
Rivalry among existing firms
Pressure from substitute product
Bargaining power of buyer
Bargaining power of seller
21. Threats Of New Entrants
New entrants add capacity, inflate costs,
push prices down, and reduce
profitability. If an industry faces the threat
of new entrant, its profit potential would
be limited. The threats from new entrants
is low if the entry barrier confer an
advantage existing firm and deter new
entrants.
22. Threats Of New Entrants
The new entrants have to invests substantial
resources to enter the industry
Economies of scale are enjoyed by the
industry
Existing firms control the distribution
channels, benefit from product
differentiation in the form of brand image
and customer loyalty
Switching costs- these are essentially one
time costs of switching from the products of
one supplier to another – are high
The government policy limits or even
prevents new entrants
23. Rivalry Between Existing
Firms Firms in an industry compete on the basis of
price, quality, promotion, service, warranties
and so on. If the rivalry between the firms in
an industry is strong, competitive moves
and countermoves dampen the average
profitability of the industry. The intensity of
rivalry in an industry tends to be high when:-
24. Rivalry Between Existing
Firms
The number of competitors in the
industry is large
At least a few firms are relatively
balanced and capable of engaging in
a sustained competitive battle
The industry growth is sluggish,
prodding firms