t3 Generation (1)

8/3/2019 t3 Generation (1)

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GENERATION AND SCREENINGOF PROJECT IDEAS


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IDENTIFICATION OFFEASIBLE

PROJECTS.


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GENERATION OF IDEAS

MONITORING THE ENV. CORPORATE APPRAISAL

SCOUTING FOR PROJECT IDEAS

PRELIMINARY SCREENING

PROJECT RATING INDEX

ON BEING AN ENTREPRENEUR


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GENERATION OF IDEAS

SWOT analysis

Clear articulation of objectives

Fostering a conducive climate


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Clear articulation of objectives

Cost reduction Productivity improvement

Increase in capacity utilization

Expansion into promising fields


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Fostering a conducive climate

Motivate employees to think creatively bysuggestion schemes, unconstrainedenvironment, etc.


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MONITORING THE ENV.

Economic sector

Govt.

Technological

Socio-demographic

Competition

Supplier


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Economic sector

State of economy

Growth rate of different sectors

Inflation

World economy

Cyclical fluctuations Balance of payment


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Govt.Sector

Industrial Policy

Tax framework

Subsidies Incentives

Concessions

Exim policy

Lending conditions of banks &

financial institutions.


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TechnologicalSector

Emergence of new tech.

Access to tech know-how


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Socio-demographicSector

Population trends

Income distribution

Educational profile Age shifts in population

Women employment

Attitude towards consumption &investment


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Competition sector

Market share

No. of firms in the industry

Entry barriers

Comparison with substitute interms of quality, price, appeal,functional performance


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Suppliersector

Availability & cost of raw material

Availability & cost of energy

Availability & cost of money


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CORPORATE APPRAISAL

Marketing &distribution

Production &

operation Corporate resources

& personnel

Finance & accounting R& D


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Marketing & distribution

Market image

Market share

Distribution network Customer loyalty

Marketing & distribution costs


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Production & operation

Condition & capacity of Plant & m/c

Raw material availability

Locational advantage Degree of vertical integration


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Corporate resources & personnel

Corporate image

Top management dynamism

Employee commitment & competence Clout with govt. & regulatory agencies


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Finance & accounting

Cost of capital

Tax situation

Borrowing capacity Relations with shareholders & creditors

Cash flows & liquidity


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R& D

R&D capabilities of firm

Lab & testing facilities

Track record of new product development


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SCOUTING FOR PROJECT

IDEAS

1.Analyse the performance of existing industries

2.Examine the inputs & outputs of various

industries 3.Review imports & exports

4.Study plan outlays & Govt. guidelines

5.Look at the suggestions of financial institutions& developmental agencies


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6.Investigate local materials & resources

7.Analyse economic & social trends 8.Study new technological developments

9.Draw clues from consumption abroad

10.Explore the possibility of reviving sickunits

11.Identify unfulfilled psychological needs

12.Attend trade fairs 13.Chance factor might favour


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1.Analyse the performance of

existing industries

Profitability & capacity utilization ofexisting industries which are profitable &risk free.


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2.Examine the inputs & outputs ofvarious industries

Raw materials, parts, supplies as inputs

Products, waste product, by product asoutputs


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3.Review imports & exports

Study of statistics of last 5 to 7 years ofimports & exports.

It improves balance of payment

Generates employment


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4.Study plan outlays & Govt.guidelines

Guidelines to industries by department ofindustrial development, govt of indiapublished annually .

Gives information regarding structure,location, production performance, licensed& installed capacity , exports, future scope

of various induatries.


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5.Look at the suggestions offinancial institutions &

developmental agencies

Mckinsey

PWC KSATECHNOPAK

CII

FICCI

IBEF


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6.Investigate local materials &

resources The national council of applied economic

research (NCAER) publish surveys

regionwise regarding potential of industrialdevelopment, resources , men, material,infrastructure facilities, etc.


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7.Analyse economic & social trends

Study of economy & social trends can giveideas

Time saving products, leisure &recreational activities, etc.


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8.Study new technologicaldevelopments

Council of scientific & industrial researchdevelop new products, technology,process, etc.which can be

commercialised.


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9.Draw clues from consumptionabroad

Products or services which are not knownin India but famous abroad can be studied.

Pre fabricated house, entertainment parks,etc.


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10.Explore the possibility of

reviving sick units

Close or on the verge of it can be revivedby:

Sound management system

Infuse further capital

Shorter gestation period


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11.Identify unfulfilled psychologicalneeds

Unfulfilled psychological needs can becatered to.


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12.Attend trade fairs

It gives latest information about newproducts, developments, etc.


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13.Chance factor might favour

Sometimes by chance one might comeacross an idea with commercial viability.


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After considering the above mentionedfactors one can generate number of ideasfor project.

They require preliminary screening.


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It consists of :

Compatibility with the promoter

Consistency with govt. priorities Availability of inputs

Adequacy of the market

Reasonableness of cost

Acceptability of risk level


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1.Compatibility with the promoter:

Idea must be compatible with the

interest , personality & resources

of entrepreneur . Gives him chance to grow with

less risk.


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2.Consistency with govt. priorities:

Is project consistent with national

goals

Environmental effects Obtaining license

Foreign exchange requirement


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Availability of inputs

Resources(raw materials,capital,power,technology,etc

.) are easily & reasonablyavailable.


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Adequacy of the market

Present market(domestic,international)

Sales & distribution

Economic,social,demographic trends. Growth potential ROI

Competitors & their shares Barriers to entry


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Reasonableness of cost

The cost structure of theproject must enable it to

realize an acceptable profitwith a competitive price.

Cost ofinputs,labour,overheads,distribution,service,etc.


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Acceptability of risk level

Tech change

Substitute

Competition from imports Business cycle

Governemnt control over price& distribution.


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Identify factors relevant for project rating

Assign weights to these factors

Rate the project proposal on variousfactors , using a suitable rating scale

Factor score=factor ratingxfactor weight

Add all the factor scores to get the overallproject rating index


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FactorFactorweight

Rating FactorScore

VG5 G4 A3 P2 VP1



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Willingness to make sacrifices

Leadership

Decisiveness Confidence in the project

Marketing orientation

Strong ego

Open mindedness

t3 Generation (1)

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