M&E 2014 Session 9 Feasibility BB

8/18/2019 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

•

Product-market – Poor timing

– Product designproblems

– Inappropriatedistribution strategy

– Unclear businessdefinition

– Over-reliance on one

customer

•

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

•

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

•

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

*+*+

*+*+

*+

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

•

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:

M&E 2014 Session 9 Feasibility BB

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