M&E 2014 Session 9 Feasibility BB
Transcript of M&E 2014 Session 9 Feasibility BB
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www.bradford.ac.uk/managem
Evaluating the Opportunity[Business Model]
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Y o u
I d e a s
C o n c e p t s
V a l u e
Entrepreneurial Process
E n h a n
c e
Explore
E v a
l u a t e
Experiment Execute
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!he Big "ie
• #I$ you %uild a %etter mousetrap& the 'orld 'ill %eat a path to
your door& even though your house %e in the 'oods()
– May%e they don*t 'ant more mousetraps
– May%e they li+e the ones they %uy no'
– May%e they*ll never even hear a%out yourmousetrap
• !he truth,
– I$ you thin+ getting the technology right is
tough& try mar+eting( !hen try sales i$ you 'ant
a real challenge-
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.hy /e' Ventures 0ail
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Product-market – Poor timing
– Product designproblems
– Inappropriatedistribution strategy
– Unclear businessdefinition
– Over-reliance on one
customer
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Financial – Under-capitalisation
– Assuming debt tooearly
– Venture capitalrelationshipproblems
• Managerialproblems – Problems ith the
managerial team
– !"M problems
#ource$ %runo& 'eidecker and !arder
In (urato and !odgetts )*++,
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Managerial 1e$ects
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Inability to identify target market or customers• Inability to delineate trading area
• Inability to delegate
• %elief that advertising is an e.pense& not an
investment• Only rudimentary knoledge of pricing strategy
• Immature understanding of distribution channels
• /o planning
• Inability to motivate• 0#omebody else1s fault1
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2I32
"O.
4ConceptionExistence
56urvival
73ro'th6uccess
8Expansion!a+eo$$
9Maturity
O'ner*s a%ility to do
People& planningand systems
O'ner*s a%ilityto delegate
(Adapted from: Churchill and Lewis, 1983:
Criticality
to
Company
Growth
Changing ;ole o$ Entrepreneur
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Business 6uccess or 0ailure
"
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.hat Is 0easi%ility >nalysis?
• Feasibility Analysis – Feasibility analysis is the process of determining
hether a business idea is viable2
– It is the preliminary evaluation of a business idea&
conducted for the purpose of determining hether theidea is orth pursuing2
– Feasibility analysis takes the guessork )to a certain
degree out of a business launch& and provides an
entrepreneur ith a more secure notion that abusiness idea is feasible or viable2
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0easi%ility >nalysis, .hat 1oes the Mar+et 6ay?
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!he Business Idea
3!4 Mc(I/#45 6 7OMPA/5 )*+++ 7!47( 'I#3
• 8hat is ne and innovative in your business idea9
• !o uni:ue is your business idea9
• 8ho is the client9
• 8hy should somebody buy your product or service9
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8hy is the ;product; better than similar products already on the market9• 8hat is your competitive advantage& and hy could
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0easi%ility >nalysis
"ole of feasibility analysis in developing successful business
ideas
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Mar+etManagement
Money
Motivation
0easi%ilty @ 8M*s
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>ssessing Opportunities
• Investment, /one !igh
• ;is+, 7ertain Unpredictable
• ;eturn, /one !igh
• Impact o$ /one =reat change,
• !ime, /o Future
;ae A5:
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Investment > Financial& /on Financial& Intangible)(noledge& Information& 4.pertise IP&
"eputation& %randing& #ocial 7apital2
;is+ > (noledge& 4conomy& 3echnology&
Financials& 7ustomers& 7ompetition& #upply 7hain&Management2
;eturn > Amount& 3imescale& Form& 4.it #trategy2
Change > disruptive technologies!imescale > ?uration& 'eadtime& "eturn
Opportunity assessment @ Pentagon model
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I/V4#3M4/3
"I#(
"43U"/
3IM4
7!A/=4
*+*+
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Opportunity assessment @ Pentagon model
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Opportunity selection
• #election criteria beteen high- and lo-value opportunities
• Used in strategic decision-making on opportunities
6trategy
Mar+et
Investment
OPPO;!
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Opportunity evaluation, 6ummary o$ +ey $actors
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8hy there is a perceived opportunity@ hat and here it is• 3he market opportunity for the business@ its sie& value and
duration
• (ey market segments and customer groups& their
preferences and ho to reach them• 3he industry structure& driving forces and competition
• 3he dynamic effects of change on the industry
• 8ho is likely to support or invest in the business
• 3he options& resources and key factors for the businessproBect
;ae A5: