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Evaluate Business Idea in a Simple Way

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Presentation on how will you Evaluate Business Idea in a Simple Way.
Opportunities dont always knock at your door. So when they do grab them with both the hands. Have a business Idea in your mind and waiting for the opportunity! Then have a look at the presentation on IDEA AND OPPORTUNITY MAPPING.

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Evaluate Business Idea in a Simple Way

  1. 1. Idea and Opportunity Mapping By- Rahul Jain
  2. 2. Searching New Ideas  Guided by Our Broad Objectives  Brainstorm to generate solutions (Environmental Analysis)  Shortlist Ideas for detailed scrutiny 1. Develop ways of evaluating ideas (yours and others’) (5Qs) 2. SWOT Analysis 3. Other constraints
  3. 3. Objectives  To Increase Profits  To Minimize Losses  To Capture new Market  To increase the Wealth  To work for Philanthropy  To Introduce new Design/Technology
  4. 4. Gucci Cartier LVMH Chanel Levis Barbie DisneyLand Fendi Oberoi
  5. 5. Some have focused on certain links  For product features: Sony Walkman, Apple Computer, Barbie Doll, Hotmail, Disneyland, Harry Potter  For information collection process: Internet based Ebay, Amazon, Google  For buying process: Amazon, Dell, widely distributed and well displayed products  For payment process: Visa and Master Cards  For delivery process: DHL’s jumbo boxes, couriers
  6. 6. Sources of New Opportunities  Customer-route: When customer dissatisfaction is high; appropriate also when investment in technology development/application not yet made  Product-route: Appropriate when product or process developed and attractive application required
  7. 7. Sources of New Opportunities  New Applications of existing products /technology (Chat)  Technology integration (call taxi, mobile)
  8. 8. Sources of New Opportunities  Industry and market changes  Growing healthcare awareness (and concern to lengthen life) created bottled water, HQ packaging, fitness, yoga.. …  When industry grows quickly, established firms concentrate on defending what they have  B&W TV manufacturers in India, HMV  Neglected but fast-growing segments offer excellent opportunities (Budget hotels/ Retailing)
  9. 9. Sources of New Opportunities  Demographic changes  Managing old age creating many opportunities  Growing higher education needs and State’s helplessness  Growing security concerns in offices, homes  Interest in comfort, travel and leisure
  10. 10. Do you agree that basically we are…. And Any product/service that helps us achieve these needs have potential • Lazy • Pleasure seeking • Comfort seeking
  11. 11. Scanning the Environment  International Environment  Domestic Environment  Macro Environment  Sectoral Analysis  SWOT Analysis
  12. 12. Scanning the Environment  International Environment  International developments affect all businesses  World is a Global Economic village  Integrated economies  Increased susceptibility to external happenings  Internationalization, Digitization, Outsourcing  One has to understand the impact of these factors  See more opportunities than threats.
  13. 13. Scanning the Environment  Political Environment  Stable & conducive political climate  Government policies  Extensive institutional framework  Technological Environment  Level of technology  Rate of change in technology  Socio-Cultural Environment  Customs, Norms and Traditions of the society  Its crucial for the operations
  14. 14. Scanning the Environment  Legal Environment  Laws of the country  Labor laws and Legal redressal system  Copyright acts & Trademark infringement  Economic Environment
  15. 15. Factors for Industry attractiveness  Market growth rate  Market size  Demand variability  Industry profitability  Industry rivalry  Global opportunities  Macro-environmental factors
  16. 16. Scanning the Environment  Sectoral Analysis  Study the sector or Industry conditions  Study the industry attractiveness  Constraints or thrust on technology, manpower & raw material  SWOT Analysis  Helps understand own skills & abilities  Knowledge & experience  Helps in understanding the competition
  17. 17. SWOT Analysis- Strengths  Experience & Expertise  Financial Position  Good Contacts  Capital raising capacity  Collaborations
  18. 18. Weaknesses  New Unfamiliar technologies  Inability to raise huge investments  Lack of Experience  Lack of trained personnel  Lack of Economies of Scale
  19. 19. Opportunities  Emergence of New technologies  New Products with new market  Special financing Schemes  Government Incentives  Rapid growth in market
  20. 20. Threats  Competition  Poor state of Economy  Change in technology  Change in Habits  New Products and services
  21. 21. Screening Ideas: Are they Opportunities? 5 Questions 1. What important customer problem can you solve? 2. How are you going to do it? 3. How many customers are there that are willing to buy from you? 4. Why can only you provide the solution? 5. How can you defend against others? Ask these questions BEFORE somebody else does!
  22. 22. Screening an Opportunity: 5 Questions 1. What important customer problem can you solve? How valuable? How painful? Remember, you need to change somebody’s behavior to buy your product.
  23. 23. Screening an Opportunity: 5 Questions 2. How are you going to do it? Business model: Product Distribution Location Technology/Innovation Service Brand
  24. 24. Screening an Opportunity: 5 Questions 3. How many customers are there that are willing to buy from you? How many customers are there? (Market size) How many will buy from you? (Market share) Who will be your first customer (besides your Mom)? Who will be your 100th ?
  25. 25. Screening an Opportunity: 5 Questions 4. Why can only you provide the solution? How are you unique? What do you provide that nobody else can?
  26. 26. Screening an Opportunity: 5 Questions 5. How can you defend against others? Location, brand, patent (or other IP), great service, great taste, great fashion sense….
  27. 27. Self-Opportunity Match Self Previous Experience (knowledge, skills) Access to new knowledge, skills Customer Problems (existing, emerging) Level of dissatisfaction (criticality, discontentment)
  28. 28. Solution to Customer  Dissatisfaction Financial Attractiveness Strategy (source, cost, availability, adequacy) Marketing Attractiveness Strategy (size, Entry, Sustenance) Entrepreneurial Capability Strategy (Attitude, Skills, Knowledge pool/network – individual/group) Technical Attractiveness Strategy (Existing/new technology and products/services)
  29. 29. Market Attractiveness  Identify areas of high customer dissatisfaction  Assess market size  Assess challenges in accessing customers  Assess competitive attractiveness
  30. 30. Overall Attractiveness  Determine technical feasibility  Estimate financial viability  Team quality is critical  Assess entrepreneurial resources (ASK)  Assess fit with personal preferences and aspirations  What & how big are the gaps in capabilities
  31. 31.  Can the gaps be filled? How? Implications for success  Remember, EXECUTION is key to success  Iteratively balance the venture tripod (mkt, tech, fin) and entrepreneur (your team’s) at every stage  Detached passion  Prepare a dynamic Business Plan
  32. 32. Pitfalls In Selecting New Venture  Lack of Objective Evaluation  No Real Insight into the Market  Inadequate Understanding of Technical Requirements  Poor Financial Understanding  Lack of Venture Uniqueness  Ignorance of Legal Issues
  33. 33. Finalizing a Product/Service  Combine opportunities provided by the environment with your strengths  In terms of knowledge, skills, experience, etc  Analyze the industry forces  Now, finalize the product/service  The proposed product/service must be compatible with:  The capability  Resources Available  Need of society
  34. 34. Criteria in Selecting Ideas  Investment  Rate of return  Implementation  Market Size  Risk  Uniqueness  Expected Life  Flexibility  Environment considerations  Effectiveness Total Score on Each parameter ( 1 to 5 – Poor to Good)
  35. 35. Log I:Presentation IVth Week- Close to Heart Idea & SWOT Analysis Prepare for a 3 minute- 5 minute presentation on the idea that has been finally chosen.  Use the 5Q format as a guide.  Be prepared to defend your ideas in front of a group  Provide all the references and intext citations Email submission and upload on the internet: 2 days before the class Email id: rahulkjain16@yahoo.co.in Finishingschool.pbworks.com

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