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Transcript of Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy...
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 1 © Copyright Troy Dyer 2004
Business Opportunities
• Identifying a Business Opportunity means identifying an unfulfilled need in the market, for which there is a customer willing pay for in exchange of the service or product.
• It is easy to identify an existing opportunity then totally new or innovative ideas
• The success rate of any new idea is 1:100 , hence quite risky
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 2 © Copyright Troy Dyer 2004
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 3 © Copyright Troy Dyer 2004
Types of Opportunities
• An unmet need is met by a new service or product• A new product or services replaces an existing product or service• A new product or service may be created because of a new technology, or pure innovation or changing
social or economic conditions.• The new product or service may create additional value to the customer, reduced cost, saves time or
increases convenience or saves energy or makes him happy.
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 4 © Copyright Troy Dyer 2004
Connecting personal vision to business strategy
Personal Vision
Business Vision
Business Strategy
Business Opportunit
y
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 5 © Copyright Troy Dyer 2004
Constructing & Deconstructing Personal & Business Vision
Personal and / or Business Vision (1)Personal and / or Business Vision (1)
Core IdeologyCore Ideology Envisioned FutureEnvisioned Future
Core ValuesCore Values Core PurposeCore Purpose 10 to 30 yr “BHAG”10 to 30 yr “BHAG” Vivid DescriptionVivid Description
• The individual and / or company’s essential mores and principles that guide its choices and actions• Enacted and not merely espoused values
• The individual and / or company’s essential reason for existing and for going forward• Long term mission
• “Big, Hairy, Audacious Goals”• Can be quantitative or qualitative• Involves David vs. Goliath type of thinking• Dreaming “the impossible dream”
• A clear picture of what the future will look like• Guided by passion, emotion and conviction• A compelling image to which everyone can relate
(1) Model adapted from Building Your Company’s Vision by James Collins and Jerry Porras (HBR, Sep-Oct, 1996)
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 6 © Copyright Troy Dyer 2004
Using PESTLE framework to identify growth opportunities
Strategic Forces
(PESTLE framework)
Categories of Entrepreneurial
Business Opportunity
Ideas for business opportunities
Investment criteria
Top 5 Opportunities
PESTLE
Model developed by Audax Ideas Management Consulting
PESTLE Forces:
• Political
• Economic
• Social
• Technology
• Legal
• Environmental
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 7 © Copyright Troy Dyer 2004
Combining the PESTLE analysis with an industry structure analysis to identify growth opportunities
Supplier Power
Buyer Power
New Entrants
Substitutes
Industry Rivalry
Political
Technological
Economic
Social
Legal
Environmental
Adapted from model in Competitive Strategy - by Michael Porter
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 8 © Copyright Troy Dyer 2004
Linking personal vision, business vision, business opportunity and business strategy
Relative Competitive Position (RCP)
Re
lativ
e A
ttra
ctiv
en
ess
(R
A)
Competitors
CustomersCapabilities
Ideal New
Venture Position
Industry
MarketVenture
RCP: a measure of:
(1) The extent of our capabilities to provide a product or service,
(2) which our customers want and are willing to pay for,
(3) in a manner which is better than our competitors, in a sustainable and value-adding manner
RA: a measure of the combined attractiveness of:
(1) The venture in terms of its economic profile and harvest potential
(2) The market in terms of its capacity to generate large, sustainable and growing profits
(3) The industry in terms of the relative power of various forces which determine the size and share of margins
Core
Competencies
Opportunity
Personal and
business
Vision
Entry Point:
What are the ventures out there that:
(1) we want to create or develop
(2) represents a business opportunity
(3) we can (or could) do well at Model developed by Audax Ideas Management Consulting
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 9 © Copyright Troy Dyer 2004
The RA/RCP matrix provides a useful approach to mapping out a business strategy
(2) Build required
capabilities
(3) Identify niche
opportunities
(1) Invest & pursue
opportunity
(4) Avoid / Wait & Re-assess in
future
High
Low
HighLow
Relative Competitive PositionRelative Competitive Position
Rel
ativ
e A
ttra
ctiv
enes
s o
f O
pp
ort
un
ity
Rel
ativ
e A
ttra
ctiv
enes
s o
f O
pp
ort
un
ity
• Business economics, risks and projected returns on investment
• Market size, growth and potential margins
• Industry structure and degree of competitiveness
• Macro-economic, political & regulatory environment
• Customer needs & wants
• Competitor capabilities
• Our capabilities
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 10 © Copyright Troy Dyer 2004
The Business Development Matrix is another way to map out different strategies for growing a business
Product Development
Market Development
New Business Development
Market Penetration
• Identify opportunities for each type of business development
• Assess relative attractiveness of different opportunities
• Assess our relative competitive position in the pursuit of different opportunities
• Agree overall business development strategy
• Identify opportunities for each type of business development
• Assess relative attractiveness of different opportunities
• Assess our relative competitive position in the pursuit of different opportunities
• Agree overall business development strategy
New
Existing
NewExisting
Target Customers & MarketsTarget Customers & Markets
Pro
du
cts
& S
ervi
ces
Pro
du
cts
& S
ervi
ces
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 11 © Copyright Troy Dyer 2004
The work done on business strategy fits into an overall Business Plan framework
• The industry and the company and its products / services
• Market research and analysis
• Economics of the business
• Marketing plan
• Design and development plans
• Manufacturing and operations plan
• Management team
• Overall schedule
• Critical risks, problems, and assumptions
• The financial plan
• Proposed company offering
Source: New Venture Creation, by Timmons and Spinelli - Chapter 12
• Financial Analysis• Industry and Market Analysis• Manufacturing / Operations Analysis
• Organisation Design• Product Design• Other
Appendices
• Description of the business concept, the business opportunity and the business strategy
• Target market and projections• Competitive advantages
Executive Summary
• Costs• Economics, profitability • Harvest potential• The lead entrepreneur & the management
team• The offering to investors
Detailed Contents
Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 12 © Copyright Troy Dyer 2004
The Prioritization Matrix may be used to structure a more detailed Action Plan
Potential Impact of the Action (in terms of positive contribution
to business objectives
High
High
Low
Low
Ease of Implementation (in terms of complexity, resource requirements,
etc
1. Quick Hits - actions
with highest priority
2. Other quick hits -
second level of priority
3. Medium term actions
- detailed plan may be
required
4. List actions now, review later
to see if priority has
changed
List the actions and then evaluate, categorize and prioritize according to the above matrixList the actions and then evaluate, categorize and prioritize according to the above matrix