project identification: generation of idea

1. GENERATION AND
SCREENING OF
PROJECT IDEAS

2. GENRATION OF IDEAS
 Stimulating the Flow of Ideas
 SWOT Analysis
 Clear Articulation of Objectives
 Fostering a Conducive Climate

3. MONITORING THE
ENVIRONMENT
 Economic Sector
 State of the Economy
 Overall Rate of Growth
 Growth Rate of Primary, Secondary and
Tertiary Sectors
 Cyclical Fluctuations
 Linkage with the World Economy
 Trade Surplus / Deficit
 Balance of Payment Situation

4. MONITORING THE
ENVIRONMENT
 Governmental Sector
 Industrial Policy
 Government Programmes & Projects
 Tax Framework
 Subsidies, Incentives and Concessions
 Import & Export Policies
 Financing Norms
 Lending Conditions of Financial Institutions
and Commercial Banks

5. MONITORING THE
ENVIRONMENT
 Technological Sector
 Emergence of New Technologies
 Access to Technical Know-How, Foreign as
well as Indigenous
 Receptiveness on the Part of Industry

6. MONITORING THE
ENVIRONMENT
 Socio-Demographic Sector
 Population Trends
 Age Shifts in Population
 Income Distribution
 Educational Profile
 Employment of Women
 Attitudes Towards Consumption and
Investment

7. MONITORING THE
ENVIRONMENT
 Competition Sector
 Number of Firms in the Industry and the
Market Share of the Top Few
 Degree of Homogeneity and Differentiation
Among Products
 Entry Barriers
 Comparison with Substitutes in Terms of
Quality, Price, Appeal and Functional
Performance
 Marketing Policies and Practices

8. MONITORING THE
ENVIRONMENT
 Supplier Sector
 Availability and Cost of Raw Materials and
Sub-Assemblies
 Availability and Cost of Energy
 Availability and Cost of Money

9. CORPORATE APPRAISAL
 Marketing and Distribution
 Market Image
 Product Line
 Market Share
 Distribution Network
 Customer Loyalty
 Marketing and Distribution Cost

10. CORPORATE APPRAISAL
 Production and Operations
 Condition and Capacity of Plant and
Machinery
 Availability of Raw Materials, Sub-
Assemblies and Power
 Degree of Vertical Integration
 Locational Advantage
 Cost Structure

11. CORPORATE APPRAISAL
 Research and Development
 Research Capabilities of Firm
 Track Record of New Development
 Laboratories and Testing Facilities
 Co-ordination Between Research and
Operations

12. CORPORATE APPRAISAL
 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

13. CORPORATE APPRAISAL
 Financial and Accounting
 Financial Leverage and Borrowing Capacity
 Cost of Capital
 Tax Situation
 Relations with Shareholders and Creditors
 Accounting and Control System
 Cash Flows and Liquidity

14. PROFIT POTENTIAL OF
INDUSTIRES – PORTER MODEL
Potential
Entrants
THE INDUSTRY
Rivalry Among
Existing Firms
Substitutes
Suppliers Buyers
Threat of New
Entrants
Threat of
Substitute
Products
Bargaining Power
of Buyers
Bargaining Power
of Suppliers

15. LIFE CYCLE APPROACH
 Pioneering Stage
 Rapid growth Stage
 Maturity & Stabilization Stage
 Decline Stage

16. The Experience Curve
Cost per unit
Accumulated volume of production

17. SCOUTING FOR
PROJECT IDEAS
 Analyze the Performance of Existing
Industries
 Examine the Inputs and Outputs of
Various Industries
 Review Imports and Exports
 Study Plan Outlays and Governmental
Guidelines

18. SCOUTING FOR
PROJECT IDEAS
 Look at the Suggestions of Financial
Institutions and Development Agencies
 Investigate Local Materials and
Resources
 Analyze Economic and Social Trends
 Study New Technological Developments
 Draw Clues for Consumption Abroad

19. SCOUTING FOR
PROJECT IDEAS
 Explore the Possibilities of Reviving Sick
Units
 Identify Unfulfilled Psychological Needs
 Attend Trade Fairs
 Stimulate Creativity for Generating New
Product Ideas

20. PRELIMINARY SCREENING
 Compatibility with the Promoter
 It Fits the Personality of the Entrepreneur
 It is Accessible to Him
 It offers him the Prospect of Rapid Growth
and High Return on the Invested Capital

21. PRELIMINARY SCREENING
 Consistency with the Government
Priorities
 Is the Project Consistent with the National
Goals and Priorities?
 Are there any Environmental Effects
Contrary to Governmental Regulations?
 Can Foreign Exchange Requirements of the
Project be Easily Accommodated?
 Will there be Any Difficulty in Obtaining the
License of the Project?

22. PRELIMINARY SCREENING
 Availability of Inputs
 Are the Capital Requirements of the Project within
Manageable Limits?
 Can Technical Know-How Required for the Project
be Obtained?
 Are the Raw Material Required for the Project
Available Domestically at a Reasonable Cost? If the
Raw Materials Have to Be Imported, Will there be
Problems?
 Is the Power Supply for the Project Reasonably
Obtainable from External Sources and Captive
Power Resources

23. PRELIMINARY SCREENING
 Adequacy of Market
 Total Present Domestic Market
 Competitors and Their Market Share
 Export Markets
 Sales and Distribution System
 Projected Increase in Consumption
 Barriers to the Entry of New Units
 Economic, Social and Demographic Trends
 Patent Protection

24. PRELIMINARY SCREENING
 Reasonableness of Cost
 Cost of Material Inputs
 Labour Costs
 Factory Overheads
 General Administrative Expenses
 Selling and Distribution Cost
 Service Cost
 Economies of Scale

25. PRELIMINARY SCREENING
 Acceptability of Risk Level
 Vulnerability of Business Cycles
 Technological Changes
 Competition from Substitutes
 Competition from Imports
 Governmental Control Over Price and
Distribution

26. PROJECT RATING
INDEX

27. SOURCES OF POSITIVE
NET PRESENT VALUE
 Economies of Scale
 Product Differentiation
 Effective Advertising and Superior Marketing
 Exceptional Service
 Innovative Product Features
 High Quality and Dependability

28. SOURCES OF POSITIVE
NET PRESENT VALUE
 Cost Advantage
 Accumulated Experience and Comparative
Edge on the Learning Curve
 Monopolistic Access to Low Cost Materials
 A Favourable Location
 More Effective Cost Control and Cost
Reduction

29. SOURCES OF POSITIVE
NET PRESENT VALUE
 Marketing Reach
 Technological Edge
 Government Policy
 Restrictive Licensing
 Import Restrictions
 High Tariff Walls
 Environmental Controls
 Special Tax Reliefs

30. ON BEING AN
ENTREPRENEUR
1. Are my goals Well Defined?
 Personal Aspirations
 Business Sustainability and Size
 Tolerance for Risk
2. Do I have the Right Strategy
 Clear Definitions
 Profitability and Potential for Growth
 Durability
 Rate of Growth

31. ON BEING AN
ENTREPRENEUR
3. Can I Execute the Strategy?
 Resources
 Organizational Infrastructure
 The Founder’s Role

32. QUALITIES AND TRAITS OF A
SUCCESSFUL ENTREPRENEUR
 Willingness to Make Sacrifices
 Leadership
 Decisiveness
 Confidence in the Project
 Marketing Orientation
 Strong Ego