Enterprise Project
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EPLecture4RoadMapToBusinessPlan201.pptEnterprise Project UMCD9Q-30-3
Presentation by
Dr Akin Ojolo
Module Leader
September 2019
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Context
Understanding value
Delivering value
Appropriating value
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Road map to the Business Plan
Summarising where we are – Semester 1
- Thinking about creating value through opportunity recognition
- Business idea and its value proposition
- Understanding competition
- Market and marketing plan
Covering at least half of the business plan – Have a draft for this half ready by end of January 2021
Next stage – semester 2
- Delivering value
- The ‘nuts and bolts’ of creating and delivering value – Operation plan
- Appropriating Value
- Financial analysis
- Writing up – The full BP
- Submit a full draft to your supervisor by the end of February 2021
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The business idea
- The opportunity the business is seeking to exploit, which may be framed in terms of the specific value that you propose to create.
- What’s special about the proposition and why it’s going to work?
- What is the trend that is being explored in the industry that is leading to the business positioning in the industry
- The macro factors affecting the business environment
- Explanation of the proposed business model.
- Its competitive advantage
This is what we mean by value
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Value proposition
- The opportunity the business is seeking to exploit, which may be framed in terms of the specific value that you propose to create.
- What’s special about the proposition and why it’s going to work?
You can frame it as “Value creation through which the user become better off in some respect or which increases the customer well-being”.
- Its competitive advantage
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Value proposition of the idea – in class exercise
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| Proposition | Idea 1 | Idea 2 | Idea 3 |
| What exactly is the product or service that you intend to offer? | |||
| What is the added value of your product or service compared others? | |||
| How easily can potential customers identify or articulate this? | |||
| Have you asked customers what they think your value proposition is? | |||
| How is easy would be for someone else to copy your product or service? | |||
| Is there a need for this product or service? | |||
| Do you know and understand your potential customers? | |||
| Total Score |
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Enterprise Project UMCD9Q-30-3
Industry Analysis
Presentation by
Dr Akin Ojolo
Module Leader
September 2019
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Industry analysis – external environment
Drawing on poll of knowledge from other modules and wider reading
- what is the trend that is being explored in the industry that is leading to the business positioning in the industry
- the macro factors to be considered in the business environment
- Environmental trends
- Economical trends
- Social trends
- Technological advances
- Political and regulatory changes
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Observing Trends
Market
forces
Social –
Personal problems
Technology
Political and regulatory
changes
Business,
product
or service
opportunity
gap
New business,
product &
service ideas
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Industry analysis
Drawing on poll of knowledge from other modules and wider reading- (Strategic management module)
- this is about sellers - other people providing similar or related services or products
- analysis of competition and competitive dynamics within the industry- (evidence of usage of relevant academic tools)
- competitors’ analysis and likely competitors’ actions
- competitive strategy – informed by literature and academic tools
- evidence of appropriate data collection, analysis and usage – both secondary and primary data will be useful)
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Industry analysis - competition
- this is about sellers - other people providing similar or related services or products
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Competitor Analysis and
Identifying Competitors
A competitor analysis is a detailed analysis of a firm’s competition
Types of competitors New Ventures face
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Industry analysis- strategy
- analysis of competition and competitive dynamics within the industry
- (evidence of usage of relevant academic tools e.g Porter Five Forces)
- Competitive strategy – Porter generic strategy
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The five competitive forces Model- Porter (1985)
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Five Forces Matrix : minimum score = 5 (very attractive)
Maximum score = 125 (very unattractive)
| Force | Importance 1 to 5 1= not important 5= very important | Threat to industry (1 to 5) 1=low, 3=medium, 5=High | Weighted Score col 2 x col 3 |
| Rivalry among industry’s companies | 5 | 3 | 15 |
| Bargaining power of supplier | 2 | 2 | 4 |
| Bargaining power of buyers | 2 | 4 | 8 |
| Treat of new entrants | 3 | 4 | 12 |
| Threat of substitute products or services Total | 4 | 3 | 12 51 |
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industry analysis data
- Secondary sources of industry information
- Data collected should answer the following questions:
- Is the industry growing?
- What are the opportunities?
- Who are the competitors?
- Are there young successful firms in the industry?
- What does the future look like?
- What is the status of any new technology?
- What are the typical margins in the industry?
- How crowded is the industry
- How intense is the level of competition in the industry
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Industry analysis
- Conclusion from industry analysis
- Attractiveness of the industry
- Define market niche
- Competitive strategy
- Risk analysis of the proposed venture
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Enterprise Project UMCD9Q-30-3
Market Analysis
Presentation by
Dr Akin Ojolo
Module Leader
September 2019
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Market analysis
- explanation of customer segment that the business will serve – quantitative information is key here to inform sales forecast
- what is the market for this business, its size and scope, and predicted sales, together with a discussion of key assumptions made
- demonstration of evidence of demand for your idea? – link to industry trend
- use of primary and secondary data is key here.
- may include marketing plan ( use of academic tools)
- marketing strategy, including consideration of the marketing mix: particularly plans for promotion and distribution and pricing strategy.
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Market analysis
- explanation of customer segment that the business will serve – quantitative information is key here to inform sales forecast
- What is the market for this business, its size and scope, and predicted sales, together with a discussion of key assumptions made
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Market segment
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Estimating your market size
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Estimating your market size
- Potential Market is the size of a general market that might be interested in buying a product (eg. 1 billion Smartphones)
- Total Available Market (TAM) is the size of your potential market – those in the potential market who might be interested in buying your particular product. (eg. English Apps for a particular operating system)
- Served Available Market (SAM) is the size of the target market segment you wish to serve within the TAM (eg. particular App function)
- Penetrated Market is the size of the SAM you capture.
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Demand
- Demonstration of evidence of demand for your idea? – link to industry trend
- Use of primary and secondary data is key here.
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- Qualitatively
- Ethnography
- Focus groups
- In-depth interviews
=> Insight !
Q. What am I selling, and to whom?
Q. What is the underlying value?
Ascertaining value/demand
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- Quantitatively
- Primary research
- Primary research (interviews, focus groups, surveys)
- Secondary research
- Secondary research (gathering data from trade publications, newspapers, published research, internet, government reports, etc)
Q. What is the realistic potential demand?
Ascertaining demand
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Marketing plan
- May include marketing plan ( use of academic tools )
- Marketing strategy, including consideration of the marketing mix: particularly plans for promotion and distribution and pricing strategy.
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Marketing plan
Marketing mix
- Product / service (functional specification, design etc)
- Price
- Promotion (or Communication)
- Place of sales( location, channels of distribution etc)
- People (or related services)
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Marketing plan
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Enterprise Project UMCD9Q-30-3
Action Plan
Presentation by
Dr Akin Ojolo
Module Leader
September 2019
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Suggested Business plan template
- Semester 1
- The Business idea
- The opportunity, including description of the product or service, and the value that the proposed business creates for its customers.
- Description of the business, including explanation of the proposed business model.
- Its competitive advantage
- Industry analysis, including competitor analysis and likely competitor actions.
- Market analysis, including discussion of the target market, estimate of market size and predicted sales, together with a discussion of key assumptions made.
- Marketing strategy, including consideration of the marketing mix: particularly plans for promotion and distribution and pricing strategy.
- Semester 2
- Operations plan, including the nature and location of the production/service process; staffing; and operations and service management issues, e.g. capacity, IP issues, partnership, business control and scalability.
- Costings, including discussion/calculation of fixed/variable costs and unit costings, together with a discussion of key assumptions made. Referencing / audit trail should be provided.
- Financial plan;
- See full details in the module handbook
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Semester 2
Next stage
- Delivering value
- The ‘nuts and bolts’ of creating and delivering value – Operation plan
- Appropriating Value
- Financial analysis
- Writing up
A draft of areas covered should be ready by w/c 22 Jan.
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Further reading
Barringer, B. R., and Duane Ireland, R. 2016. Entrepreneurship: Successfully Launching New Ventures, 5th ed., Upper Saddle River, New Jersey: Pearson Education Inc.
Marco Galvagno et, al (2014) Theory of Value co-creation: a systematic review. Managing Service Quality , Vol,24 No 6 pp643-683.
Hannu Saarijarvi et, al (2013) Value co-creation: theoretical approaches and practical implications. European Business Review Vol. 25 No1, pp 6-19
Gronroos (2011) Value co-creation in service logic: A critical analysis. Marketing Theory 11(3) 279-301.
Paul Burns, 2018. New Venture Creation- A Framework for Entrepreneurial Start-Ups Second Ed.
