K.CHITRA PM PPT

7/31/2019 K.CHITRA PM PPT

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K.CHITRA11TM03


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Generation of Ideas

Stimulating the flow of ideas

Monitoring the Environment

Key sectors of the environment

Corporate Appraisal

Aspects of corporate appraisal

Tools for Identifying Investment Opportunities

Porter model

Scouting for Project Ideas


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For a successful venture, we need tohave promising ideas. Manyorganisations or firms pursue ideas that

will help them to achieve their objectives.There is a relationship between theinformation gathered about the market

and the ideas generated by the workgroups in the organisation. The ideaswith the greatest prospective are thenadopted. This is known as screening of

ideas.


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Generation of ideas mainly comprises oftwo elements. The first one being the

source of the ideas which can either beinternal or external in nature and thesecond one being the methods used to

identify these sources and gatherinformation about them. The methodscan be differentiated by the time horizonin which they are implemented


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The following features are helpful for thestimulation of ideas:

SWOT analysis. Clear articulation of objectives.

Developing a conducive climate.

Brainstorming.


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Strengths, Weaknesses, Opportunities, andThreats (SWOT) is a well-known analysistechnique adopted by business owners to

improve the current position of their business.The internal aspects of a company are thestrengths and weaknesses such as the quality

of the product or the managerial skills. Theexternal factors are the opportunities andthreats like the development of a completely

new market or the arrival of new competitors.The SWOT analysis helps to identify the coreactivities and how to perform them well.


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Clear articulation of objectives

A clear articulation of objectives will help ingrouping the efforts of employees, which wouldin turn make them think more imaginatively.

Developing a conducive climate

It is essential to develop an environment in anorganisation, where the employees of acompany can bring out their creativity. Theideas of the employees must be acknowledged

properly and promptly.


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A promising investment idea allows a firmto exploit opportunities in the

environment by drawing on itscompetitive strengths External forcesaffect business decisions. These forces

can be economic, social, political, andtechnological factors. A firm needs toconstantly monitor its environment toremain competitive. A businessenvironment is dynamic in nature.


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Governmental Sector

These factors are neither in the control of

the promoter nor the project manager.International projects get affected by bothlocal and international regulations.

Projects also get affected by changes inimport, export and exchange restrictions.Sudden revolutions can completely stopa project.


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Technological Sector

Technology plays an important role in a

competitive business environment. Thissector includes the level of technologyavailable in the country, the pace of

research and progress made inintroducing modern technology inproduction


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Socio-Demographic Sector

This describes the characteristics of the

society in which the organisation exists.Literacy rate, customs, values, beliefs,lifestyle, and mobility of population are

part of the socio-demographic sector


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Economic sector

This sector consists of factors that

influence the business in a country. Itincludes.

Inflation rate, Employment, Interest rates,

Gross national product.


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Corporate appraisal refers to theexamination of an organisation from

different angles. It is essential to identifythe strengths, weaknesses, and thereadiness of the internal culture of the

firm to interact with the externalenvironment.


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Product and operations This includes theproduct that the company wants to manufactureand capacity of the plant and machinery,

availability of raw materials, sub-assembliesand power

Research and development It is necessary

to identify the research abilities of the firm, thetype of laboratories, and testing facilitiesavailable, along with the coordination between

research and operations. It is also essential fora firm to keep a record of the new productdevelopments.


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Corporate resources and personnel Thisincludes the corporate image, governmental,regulatory agencies influence, and dynamism of

top management, competence of employeesalong with the state of industrial relations.

Finance and accounting This includes the

financial leverage and borrowing capacity of thefirm, cost of capital, tax situation, andrelationship with the shareholders, creditors,

accounting and control system, cash flows andliquidity.


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There are various tools that can be usedto identify promising investment

opportunities Porter model.

I i i h l h ld h


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It is important that a corporate plan should meet theopportunities and threats in the firms external environment and

a competitive approach must be based on an understanding ofindustry structures and the way they change. The Porter model

is based on these insights of a corporate strategy.

Porter has identified the five competitive forces that can makeevery industry gain a good position in the market. The forces

determine the intensity of competition and therefore theprofitability of an industry.

This model explains the driving forces in a business.

Management decides the way to influence or achieve particularcharacteristics of their industry based on the informationderived from the five forces analysis.


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PotentialEntrants

THE INDUSTRYRivalry AmongExisting Firms

Substitutes

Suppliers Buyers

Threat of New

Entrants

Threat ofSubstituteProducts

Bargaining Powerof Buyers

Bargaining Powerof Suppliers


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It is essential to have good project ideassince they are the key to success for

everyone. However, it is difficult to havesuch ideas. Hence, various sourcesshould be analysed to get good ideas. A

few factors that need to be consideredwhile scouting for project ideas are:

A l i th f f i ti i A


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Analysing the performance of existing companies Acompany should be study the terms of its profitability and itscapacity to utilise available resources. This indicates apromising investment opportunity.

Examining the inputs and outputs of industries

Byanalysing the various input and output strategies adopted byindustries, we can get project ideas.

Reviewing import and exports Analysing the import and

export strategy for a period of three to five years helps inunderstanding the trends of import or export of variousproducts.

Evaluating the suggestions of financial institutions and

developmental agencies

The state financial corporationsand developmental agencies conduct studies, prepare feasiblereports, and offer suggestions to industrialists. With the help ofthese suggestions, they can identify promising projects.


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Reference

Dr. Chandra. P (2008). Projects,

Planning, Analysis, Selection, Financing,Implementation and Review, Seventhedition, McGraw-Hill Education

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