NCV 2 New Venture Creation Hands-On Support Slide Show (Module 1)

New Venture Creation: Level 2 1

New Venture Creation: NCV Level New Venture Creation: NCV Level

22


New Venture Creation: NCV Level New Venture Creation: NCV Level 22

Module 1: The business environment

Module 2: The markets & needs for a new venture

Module 3: Financial requirements for a new venture


Module 1Module 1The business environmentThe business environment


In Module 1 we shall be In Module 1 we shall be covering:covering:

the structure and roles of different organisations

within their own industry in South Africa

the concept of a market and how to market

products and services

what market positioning is

the role of professional associations in the

business sector


The 3 types of organisationsThe 3 types of organisationsoperating in South Africaoperating in South Africa

Non-profitorganisations

Non-profitorganisationsGovernment

organisations

Governmentorganisations

Private businessorganisations

Private businessorganisations


Government (public) Government (public) organisationsorganisations

• offer goods & services to the

public

• sometimes compete with

private business

• are fully or partly owned by

the State (the government)


One example of One example of

a government or a government or

public-ownedpublic-owned

organisation isorganisation is

………………


Another example Another example

isis

………………


The role of government The role of government organisationsorganisations

● facilitating economic growth by providing

finance to ‘would be’ entrepreneurs

● protecting the public against malpractice by

private organisations (e.g. Public Protector)

● providing specialised services (e.g. National

Lottery)


Refuse removal

Refuse removal

Electricity

Electricity

??

???

?


Providing Essential ServicesProviding Essential Services

??


Rail links

Rail links

Sanitation (sewage)

Sanitation (sewage)

??

??


Providing InfrastructureProviding Infrastructure


Non-profit organisationsNon-profit organisations

• aim to uplift & provide support

to communities

• do not seek profits

• rely on financial support from

the communities they serve

• are privately managed by

community groups e.g.

churches


One example of One example of

a non-profita non-profit

organisation isorganisation is

………………


Another example Another example

isis

………………


The role of non-profit organisationsThe role of non-profit organisations

● providing specific medical support to people (e.g. Hospice)

● providing protection for animals (e.g. SPCA)

● protecting the environment (e.g. World Wildlife Fund – WWF)

● providing emergency relief in the case of natural disasters

● supporting the ‘arts’ in the country (e.g. Grahamstown Arts

Festival)

● lobbying for specific causes (e.g. Treatment Action Campaign –

TAG)


Business organisationsBusiness organisations

• are the driving force of any

free-market economy

• accept risks in pursuit of

profits

• offer products and/or

services on the open market


An example of An example of

a businessa business

organisation that organisation that

sells sells goodsgoods on the on the

open market isopen market is

………………


An example of a An example of a

businessbusiness

organisation that organisation that

sells sells servicesservices on the on the

open market isopen market is

isis

………………


The role of business organisationsThe role of business organisations

● staying in business

● helping to grow the economy

● creating wealth for the country

● creating employment opportunities

● paying taxes to the government

● providing important services


The value chain of a The value chain of a businessbusiness


Outputs • products

• services

Outputs • products

• services

Inputs • raw materials

• information

Inputs • raw materials

• information

TransformationTransformation


Production Production Purchasing

Purchasing

Core activities in the value chainCore activities in the value chain

Distribution Distribution Marketing Marketing


Production Production Purchasing

Purchasing

Support activities in the value chainSupport activities in the value chain

Distribution Distribution Marketing Marketing

Procurement

Procurement

Technology development

Technology development

HR Management

HR Management


Shareholders Shareholders

Customers

Customers

Key stakeholders in a businessKey stakeholders in a business

Suppliers Suppliers

Community Community

BusinessBusiness

Employees

Employees

Government

Government


Business categoriesBusiness categories

Primary

Industries

Primary

Industries

Secondary

Industries

Secondary

Industries

Tertiary

Industries

Tertiary

Industries



business sectorbusiness sector

in the primaryin the primary

category iscategory is

……………………



business sector business sector

in the secondary in the secondary


……………………



business sector business sector

in the tertiary in the tertiary


……………………


The contribution of these categories to the GDP of South The contribution of these categories to the GDP of South

AfricaAfrica

Primary, 11%

Secondary, 24%

Tertiary, 65%


The contribution of the major business sectors to SA’s GDPThe contribution of the major business sectors to SA’s GDP

2.4%

2.4%

3.7%

6.2%

7.4%

9.7%

13.9%

14.7%

19.5%

20.1%

Electricity/water

Construction

Agriculture

Personal Services

Mining

Transport

W/sal/retail

Govt Services

Manufacturing

Financial Services


Principles of business marketingPrinciples of business marketing

Business marketing is the decision and effort by a business to develop a

need-satisfying product or service and sell it successfully to customers.

Key principles are:

● A product is manufactured

● A service is delivered

● Success will only happen if there is a need for the product or service

e.g. a need for food, clothing, security or social contact

● Success is measured by making a profit while meeting the identified

need


A product: A product: • is tangible – it can be

seen, felt, held, tasted, smelt and owned

• is bought in exchange for something of value (e.g. money)

• normally comes in some kind of packaging

• is owned by the customer


A service: A service: • cannot be held, seen or

touched – this is called service intangibility

• cannot be separated from the person providing it – this is called service inseparability

• will depend on how professional the person providing it is – this is called service variability

• Cannot be ‘stored’ for later use like a product – this is called service perishability


The principles of trade that define The principles of trade that define marketingmarketing

Needs, wants, demands

Needs, wants, demands

Exchange

Exchange

Value

Value


The difference between needs, wants & The difference between needs, wants & demandsdemands

Needs

Needs

Wants

Wants

Demands

Demands


Price Price Product

Product

The 4 P’s of marketingThe 4 P’s of marketing

Place Place Promotion Promotion


In-store promotion In-store promotion

Advertising

Advertising

PromotionPromotion

Direct Marketing Direct Marketing

Personal Selling Personal Selling

• inform• persuade• remind

• inform• persuade• remind

PR (sponsorship)

PR (sponsorship)

PR (brochures)

PR (brochures)


Market positioningMarket positioning

is based on theis based on the

competitive advantagecompetitive advantage

of a business – for example of a business – for example

a superior ……………….a superior ……………….

……………………………………. is the . is the

competitive advantage ofcompetitive advantage of

Coca-Coca-


The The internalinternal strengths & weaknesses of a strengths & weaknesses of a

businessbusiness

Strengths

• quality products• cost effective manufacturing• skilled & motivated employees• strong brand identity in marketplace• good business location

Strengths

• quality products• cost effective manufacturing• skilled & motivated employees• strong brand identity in marketplace• good business location

Weaknesses

• limited capital• insufficient staff• limited distribution capacity• too few products

Weaknesses

• limited capital• insufficient staff• limited distribution capacity• too few products


The The externalexternal opportunities & threats for a opportunities & threats for a

businessbusiness

Opportunities

• growth in chosen market• increase in middle class income• new distribution methods• export market opening up

Opportunities

• growth in chosen market• increase in middle class income• new distribution methods• export market opening up

Threats

• new competitors entering market• customer needs & wants changing• labour unrest in country• economic recession

Threats

• new competitors entering market• customer needs & wants changing• labour unrest in country• economic recession


Professional associationsProfessional associations

• organisations to which professional people

such as accountants, engineers, lawyers and

teachers belong

• ensure standards of professional ethics &

integrity are maintained amongst members

• provide professional training & accreditation

for members

• provide access to networking opportunities

and job information

Date post:	13-Nov-2014
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NCV 2 New Venture Creation Hands-On Support Slide Show (Module 1)

Education