Market Analysis Business Plan Preparation


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  • Needs: Manage information: Google Noodles Crocs Physical: food, warmth, shelter, sleep, etc. Physiological: health, cleanliness, comfort, fitness, safety, etc. Emotional: euphoria, love, prestige, stress, etc Social: ethical, honesty, power, competitiveness, integrity, friendship, etc. Intellectual: achievement, better decisions, artistry, etc. Economic: revenues, productivity, cost savings, maintenance, etc. Financial: ROI, DCF, payback, burn rate, etc.
  • Educating the market takes a long time & is expensive.
  • Early stage vs. late stage Point of departure
  • Market Analysis Business Plan Preparation

    1. 1. Business Plan Preparation Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado
    2. 2. Tonight’s Agenda <ul><li>Topics </li></ul><ul><ul><li>Opportunity/Need </li></ul></ul><ul><ul><li>Market Analysis </li></ul></ul><ul><ul><li>Segmentation </li></ul></ul><ul><ul><li>Financial Comp </li></ul></ul><ul><ul><li>Model Company </li></ul></ul><ul><li>Evaluate MRP & Hecho en Casa business plans </li></ul><ul><li>Hand-in Interview List </li></ul>
    3. 3. Next Week <ul><li>Topics </li></ul><ul><ul><li>Industry Analysis </li></ul></ul><ul><ul><li>Competitive Advantage </li></ul></ul><ul><ul><li>Value Chain </li></ul></ul><ul><ul><li>Business Model </li></ul></ul><ul><li>Read </li></ul><ul><ul><li>BP pp 11-13, 27 </li></ul></ul><ul><ul><li>Business Model Assignment </li></ul></ul><ul><li>In the Fire </li></ul><ul><ul><li>Opportunity/Need </li></ul></ul><ul><ul><li>Value Proposition </li></ul></ul>
    4. 4. Opportunity/Need <ul><li>What is the pain? </li></ul><ul><li>What problem is being solved? </li></ul><ul><ul><li>Dissatisfaction with current products/services </li></ul></ul><ul><ul><li>Poor quality or service </li></ul></ul><ul><li>Must be compelling </li></ul><ul><li>Must be easily understood by TM </li></ul>
    5. 5. Market Analysis <ul><li>Market: “group of current and potential customers having the willingness and ability to buy product/services to satisfy a need.” </li></ul><ul><li>Industry: “group of sellers that offer product/services that are similar and close substitutes for one another.” </li></ul>JW Mullins, New Business Road Test
    6. 6. Market Analysis Sections <ul><li>Market size & growth </li></ul><ul><li>Trends </li></ul><ul><li>Target Market </li></ul><ul><li>Channels of distribution </li></ul>
    7. 7. Market Analysis (Macro) <ul><li>What is the size & growth potential? </li></ul><ul><li>Historic and future </li></ul><ul><li>Must indicate sources </li></ul><ul><li>Segment your market </li></ul><ul><ul><ul><li>Lot’s of numbers – show in tables </li></ul></ul></ul>
    8. 8. Market Segmentation (Macro) <ul><li>Groups of customers – demographics & psychographics </li></ul><ul><li>Products – features, benefits, prices </li></ul><ul><li>Geography – see Hecho en Casa </li></ul><ul><li>Distribution channels </li></ul><ul><li>Sector – industrial (see MRT), consumer, government </li></ul><ul><li>Objective is to identify potential entry points </li></ul>
    9. 10. Trends <ul><li>What changes are taking place – economic, socio-cultural, political/legal, global, environmental, demographic, technological </li></ul><ul><li>Positive and negative trends </li></ul><ul><li>Dissatisfied groups </li></ul><ul><li>Must provide your sources </li></ul>
    10. 11. Target Segment (Micro) <ul><li>Best point of entry </li></ul><ul><li>What is the size & growth potential? </li></ul><ul><ul><li>Consumer - demographics & psychographics </li></ul></ul><ul><ul><li>Business – types of organizations, buying decisions </li></ul></ul><ul><li>Understand customer behavior </li></ul><ul><ul><li>How are products used? </li></ul></ul><ul><ul><li>How are buying decisions made? </li></ul></ul><ul><ul><ul><ul><li>It’s not about you! </li></ul></ul></ul></ul>
    11. 12. Target Market (Micro) <ul><li>Benefits are understood, compelling & differentiated </li></ul><ul><li>Potential to grow & expand to other segments </li></ul><ul><li>Evidence that the customer wants to buy </li></ul><ul><ul><li>Customer research is key </li></ul></ul><ul><ul><li>Surveys provide credibility </li></ul></ul><ul><ul><li>Lurk & Listen </li></ul></ul>
    12. 13. Channels of Distribution <ul><li>What is normal for your market? </li></ul><ul><li>Distributors, wholesalers, dealer, retailer, internet, system integrator, Value Added Retailer (VAR) Original Equipment Manufacturer (OEM) </li></ul><ul><li>How are buying decisions made </li></ul>
    13. 14. Value Proposition - 3 Elements <ul><li>What are the features? </li></ul><ul><li>Who is the target market? </li></ul><ul><li>What are the benefits? </li></ul>
    14. 15. Value Proposition “ XYZ is a_______[describe] company. By its _______[feature(s)], it provides ______ [unique benefit(s)] to ______[target market]”
    15. 16. Simple Value Proposition SST Corporation “ SST is a stainless steel toothbrush company. By its one bristle brush made of high tensile stainless steel, it provides an exhilarating tooth cleaning experience to thrill-seeking X-gen consumers”
    16. 17. Simple Value Proposition Dell Computer “ Dell Computer sells personal computers to consumers. Our build-to-order manufacturing and customer-direct sales enable us to offer custom built computers at very competitive prices. Our customers get the computer that they have always imagined and save money.”
    17. 18. Simple Value Proposition Vic’s Coffee “ Vic’s Coffee is a Boulder based coffee house. Its gourmet coffee, convenient and fast service, provide a welcoming environment for people who want to meet with their friends or a stimulating morning coffee for on-the-go business people.”
    18. 19. Value Proposition <ul><li>Proflowers serves the “price sensitive and convenience oriented customers” with the “freshest cut flowers at a competitive price”, because of their unique sourcing and Fed/Ex shipping arrangements. </li></ul><ul><li> serves the “mid-to high-end market” by providing the “easiest way to send flowers and gifts” because of their strong brand name, market communications and supplier network. </li></ul>e-Commerce; Rayport & Jawroski
    19. 20. Financial COMP’s <ul><li>Company in your marketplace. </li></ul><ul><ul><li>NAIC code </li></ul></ul><ul><ul><li>Publicly traded </li></ul></ul><ul><ul><li>Industry ratios – see Selected Resources Guide Library </li></ul></ul><ul><li>Key financial measures to compare when developing strategy and projections </li></ul><ul><li>Reality test </li></ul>
    20. 21. Financial COMP’s
    21. 22. Model Company <ul><li>Identify company in your marketplace </li></ul><ul><li>Different segment, products, target market </li></ul><ul><li>Done just what you want to do </li></ul><ul><li>Provides credibility </li></ul>
    22. 23. Business Plans <ul><li>Metal Removal Technology </li></ul><ul><li>Hecho en Casa </li></ul>
    23. 24. Features <ul><li>Describe the product or service - range, environment, employees </li></ul><ul><li>What are the key product/service attributes (performance, cost, quality, social, availability, service, and environment)? </li></ul><ul><li>How is the product/service produced and delivered? Does the process provide a competitive advantage? </li></ul>
    24. 25. Target Market <ul><li>Who is the target market? Why? </li></ul><ul><ul><li>Demographics </li></ul></ul><ul><ul><li>Psychographics or life style </li></ul></ul><ul><ul><li>Social status: infers certain behavior </li></ul></ul><ul><li>How are buying decisions made? What are the criteria? Who makes the decision? Who influences the decision? </li></ul>
    25. 26. What Are the Benefits? <ul><li>Emotional: ambition, power, independence, achievement, ambition, pride of ownership, comfort, love, friendship, security, style, self Improvement, etc. </li></ul><ul><li>Social: status, image, popularity with friends or family members, reputation of brand, personal relationships, style, fashionable, etc. </li></ul><ul><li>Health: stress, fitness, mental capacity, strength, sex life, quality of life, muse, etc. </li></ul><ul><li>Financial: revenue, costs, savings, productivity, pricing, profitability, market share, save time, productivity, etc. </li></ul><ul><li>Life style: convenience, saves time </li></ul>