project panning

1. GENERATION AND SCREENING
OF
PROJECT IDEAS

2. GENERATION OF IDEAS
 Stimulating the Flow of Ideas
 SWOT Analysis
 Clear operational Objectives
 Organisational environment-internal & external.

3. MONITORING THE ENVIRONMENT
 Economic Sector
 Governmental Sector
 Technological Sector
 Socio-Demographic Sector
 Competition Sector
 Supplier Sector

4. MONITORING THE ENVIRONMENT
 Economic Sector
 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

5. 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

6. 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

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

8. MONITORING THE ENVIRONMENT
 Competitive 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

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

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
 Location 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. 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

16. 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

17. 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

18. PRELIMINARY SCREENING
 Compatibility with the promoter –The promoted idea
should be compatible with the personality ,interest
and resources of the entrepreneur.
 Consistency with governmental priorities
 Availability of inputs and resources
 Adequacy of the market-(market condition)
 Cost determination
 Risk

19. 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

20. PRELIMINARY SCREENING
 Consistency with the Government 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?

21. PRELIMINARY SCREENING
 Availability of Inputs
 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

22. 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

23. Market and Demand Analysis
FOLLOWING ARE THE MAIN STEPS INVOLVED:
i. Situational Analysis
ii. Collection of secondary data
iii. Market Survey
iv. Features of the market
v. Demand Forecasting
vi. Uncertainties in demand forecasting
vii. Market Planning

24. Market and Demand Analysis
i. Situational Analysis-
 Formal And informal situation
Formal situation includes –Who are the buyers ?
What is the demand for product? What is the Price?
 Informal situation includes information such as
purchasing power of the customer, competitors &
past experience etc.

25. ii)Collection of secondary data
 Secondary data can be collected from-
 Statistical year book
 Census of India
 Economic Survey
 National Sample survey
 Reports of ministry of commerce and industry
 Import –Export Bulletin

26. iii)Market Survey-
Selection of
population
Selection of
Sample
Scheme size
Survey
method
Appointment
Field
investigator
Collection of
information
Scrutinizing
the info.
Analyzing and
interpret the
information

27. iv)Features of market
 Homogeneous or hetrogeneous

28. Demand Forecasting
Methods of demand
forecasting
Qualitative Method
a)Delphi method (e-
mail)
b)Executive opinion
method
Time series projection
a)Moving Average
method
b)Trend projection
method
Casual method
a)Chain Ratio method
b)End use method
c)Leading indicator

29. Qualitative method-
 Delphi method- opinions from a group of experts by
sending questionnaire through mail.
 Executive opinion method- It is a method where a
group of managers makes plans for expected future
sales and estimation of sales for achieving margins.

30. Time series Projection method-
 A)Moving average method- It refers to the forecasting
for the next period equal to the average of the sales for
several preceding periods.
 Trend Projection Method- The trend method is
applied when the new trend determine with the help
of the past consumption and calculating future
consumption.

31. Casual Method-
 Chain Ration Method-This method is useful to
determine demand estimation .It depends on the
ration techniques which determines the sales
potential.
 Consumption Level method-Helps to estimate
consumption level on the basis of elasticity
coefficients.
Here, we need to calculate Income elasticity & Price
elasticity

32. End Use Method-
 End use method-
END USE
METHOD
Identify
uses of
product
Determine
coefficient for
consumption
Project the
output level
Demand
for
product

33. Technical Analysis-
 Selection of technology
 Arranging for technical knowledge
 Define material and inputs and utilities
 Product Mix
 Plant capacity
 Location and site
 Machine and equipment
 Environmental aspects
 Designing charts layouts

34. Sources of Finance
 Long Term Finance – Funds which are for a period
exceeding 5-10 years.
 Intermediate Financing- Fund which are required for a
period exceeding one year but not exceeding 5 years.
 Short Term Financing- investment in current assets
such as stock ,debtors , cash etc.(Working capital)

35. Assignment -I
Assignment on Sources Of Finance &
Appraisal of Term Loans by Financial
Institutions.

36. Small scale industry
 Assignment -II
 Meaning of Small Scale industry. Government policy
and problems obtaining finance.

37. Sources of finance to SSI.
 Internal
A. Paid –up capital
a)Ordinary shares
b)Preference shares
c)Deferred shares
B. Reserve Surplus
a)Capital Reserves
b)Development rebate reserves

38. Contd…
 External
a)Borrowing
 From bank
 From institutes like IDBI ,ICICI.
 From Government
b)Trade dues
 Sundry creditors.
 Others.

39. Governmental Support :-
SSI’S
State Govt.
-DI’s
-SFC’s
-DIC’s
Others
-Industry Association
-Non-Governmental
Org.
Central Government
-SSI’s
-EDI’s
-SIDO
-SIDBI