k.chitra pm ppt
TRANSCRIPT
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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