Satish verma

To

stimulate the flow of ideas, the following are helpful. 1.SWOT Analysis. 2.Clear articulation of objectives a. Cost reduction b. Productivity improvement c. Increase in capacity utilization. d. Improvement in contribution margin e. Expansion into promising fields.

Fostering

a Conducive Climate

 Economic

sectors:

1.State of the economy. 2.Overall rate of growth. 3.Gorwth rate of primary ,secondary and tertiary sectors. 4.Cyclical Fluctuations. 5.Linkages with the world economy. 6.Trade surplus/deficit 7.Balance of payment situation.

Industrial

policy . Government programmes and projects. Tax framework. Subsidies, incentives ,and concessions. Import and export policies. Financing norms. Lending conditions of financial institutions.

Emergence Access

of new technologies

to technical know-how ,foreign as well as indigenous. on the part of industry.

Receptiveness

Population

trends Age shift in populations Income distribution Education profiles. Employment of women. Attitudes towards consumption and investment.

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.

Availability

and cost of raw materials and sub-assemblies. Availability and cost of money.

Realistic

appraisal of corporate strengths and weakness is essential for identifying investment opportunity. broad areas of corporate appraisal and the important aspects to be considered under them are as follows.

The

Market

Image. Product line. Market share. Distribution network. Customer Loyalty. Marketing and distribution costs.

Condition

and capacity of plant and machinery. Availability of raw materials, subassemblies, and power. Degree of vertical integration. Location advantages Cost structure.

Research

capabilities of the firm. Track record of new product developments. Laboratories and testing facilities. Coordination between research and operations.

Corporate

image. Clout with governmental and regulatory agencies. Dynamism of top management. Competence and commitment of employees. State of industrial relations.

Financial

leverage and borrowing

capacity Cost of capital Tax situation. Relations with shareholders and creditors. Accounting and control system. Cash flows and liquidity.

 Porter

Model: Profit potential of Industries Profit potential of an industry depends on combined strength of following five competitive forces. 1.Threat of new entrants 2.Rivalry among existing firms. 3.Pressure form substitute products. 4.Bargaining power of buyer. 5.Bargaining power of sellers

 Threat

from entrants ,profit potential of industry would be low. entry barrier are high when. 1.Entrants have to invest substantial resources. 2.Economies of scale are enjoyed. 3.control of distribution channel, product differentiation. 4.Switching cost are high. 5.Government policy limits or even prevents new entrants.

 Industry

compete on basis of price, quality promotion ,service ,warranties.

rivalry is high when. 1.No.of competitors in industry is Large. 2.atleast few firms are balanced and capable for sustained competition. 3.industry growth is sluggish. 4.Level of fixed cost is high. 5.Chronic overcapacity in the industry. 6.Industry confronts high exit barriers.

The

threat from substitutes products is high. 1.price-performance trade off is attract active. 2.Switching cost are minimal. 3.Substitutes products produced with superior profits.

Bargaining

power of buyer group is

high when. 1.It purchase are large relative to seller. 2.Switching cost are low. 3.Poses a strong threat of backward integration.

Supplier

have strong bargaining power when. 1. Few supplier dominate ,supplier group is more concentrated. 2. No viable substitutes for the product supplied. 3.Switching cost of buyer is high. 4.Supplier is threat of forward integration.

Following

are wide variety of sources tapped to identify them. Analyze the performance of Existing Industries. 1. Capacity utilization and profitability study. 2. More useful for region-wise, for products with high transportation cost.

Materials,

purchased parts, Supplier are distant places. of output of existing industries may reveal opportunities .

Study

Analysis

of import reports of 5 to 7

years. Benefits: 1. improves balance of payment. 2.Generate employment. 3.Provide market for supporting industries and services.

Gudelines

to industires by Department of Industrial development, Government of India. information about Structure and location, production performance, licensed and installed capacity, exports,and Future scope of various industries.

Provides

Look

at the suggestions of financial institutions and Developmental Agencies. industrial development corporations, the developmental bodies prepare feasibility report, offer suggestion.

State

Changing

economic conditions and consumer preference.

E.G.demand

for time saving products. (Oven, food items, Powered vehicles) Desire for leisure and recreational products and services.

Large

network of research laboratories under The council of Scientific and Industrial Research . products,New processed and Technologies for existing products developed.

New

Identify

projects for the manufacture of products or supply of services used in abroad. vending machine, Entertainment parks, Prefabricated houses, robots.

Automatic

Adding

value to local available material. of local artisans.

Skills

National

Council of Applied Economic Research (NCAER),public surveys for potential for industrial development in various regions.

Have

shorter gestation period.

Marginal

efforts would suffice to revive such units.

National

and International trade fairs for New products and Development.

By

thinking along the line :Modification ,Rearrangement,Reversal,Magnificati on,Reduction,Substitution,Adaptation, Combination.

For

well established products like bathing soap, Detergents ,cosmetics, toothpaste to find out unfulfilled psychological needs of consumers.

Joseph

Kamoo Mecca finder.

Nrupendar

Rao and KVk Raju packing needs.

For

preliminary screening following aspects may be looked into. 1.Compatibility with the promoter. 2.Consistency with governmental priorities. 3.Adequacy of market. 4.resonableness of cost. 5.Accepability of risk level.

Comatible

with interest,personalilty

and resources of entrepreuner.

Is

the project consistent with national goals. Environmental effects contrary to governmental regulation. Foreign exchange requirements can be accommodated. Difficulty in obtaining License for the project.

Capital

requirement of the project within manageable units. Technical know-how required for the project be obtained. Raw material available domestically, any problem for imports. Power supply obtainable.

To

judge adequacy following factors have to be examined. 1 Total present domestic market. 2.Competatiors and their market share. 3.Sales and distributive system. 4.Projected increase in consumption. 5.Patent Protection.

Cost

structure to realize acceptable profit. 1.Costs of material inputs. 2.labour costs. 3.Factory overheads 4.General administration expenses. 5.Selling and Distribution costs. 6.Service costs 7.Economies of scale.

Following

factors should be considered. 1.Vulnerability to business cycles. 2. Technological changes. 3.Competition from substitutes. 4.Competition from imports. 5.Govermenntal control over price and distribution. 6.Shifts in consumer preferences.

Preliminary

evaluation translated into a project rating Index. 1.Indentify factors relevant for project rating. 2. Assign weights to these factors. 3.Rate the proposal on various factors.(5 Pt.) 4.Factor rating into Factor weight. 5.Add all the factor scores get project rating Index.

Economies

of Scale Product Differentiation

Effective Advertising and Superior

Marketing Exceptional Service Innovative Product Features High Quality and Dependability

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

Marketing

Reach Technological Edge Government Policy

Restrictive Licensing Import Restrictions High Tariff Walls Environmental Controls Special Tax Reliefs

1.

Are my goals Well Defined?

1.

Do I have the Right Strategy

Personal Aspirations Business Sustainability and Size Tolerance for Risk

Clear Definitions Profitability and Potential for Growth Durability Rate of Growth

3.

Can I Execute the Strategy?

Resources Organizational Infrastructure The Founders Role

Willingness Leadership

to Make Sacrifices

Decisiveness Confidence

in the Project Marketing Orientation Strong Ego

Thank

you