Use the worksheet in the course text (p. 88 | Past and Future Growth of Your Industry) to help you project the future growth rate.
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Choose one (1) strategic position from the course text (pp. 142–143) that you believe is the best strategic position for your company
What Kinds of Strategic Positions Are There?
What makes a company different? Is it the nature of its products or services? The quality or cost? The geographic area or type of customers served? Perhaps the company has proprietary products customers can’t find elsewhere.
There are many ways to distinguish yourself from your competitors, including:
Customer Perception Factors
Market Segment-Rejuvenate-Me is an all-natural energy drink. Target market 16-45, Fitness centers, Military installations, all schools, colleges and universities and Sports Complexes, and possible professional athletes.
Market Share
Operational and/or Technological Advantages
Proprietary Products, Technology, Abilities, or Relationships
Sales Channels
Business Model
First-Mover Advantage
Lean Start-Up
Branding
Each of these strategic approaches offers opportunities but also poses pitfalls. And they may be related: If you are positioning your company on the basis of low price, you’ll also need operational efficiencies to reduce costs or else you won’t be able to survive against competitors with higher profit margins.
You may refer to the types of risk listed in the course text (pp. 148–149) as well as any risks not listed in the text.
What Kinds of Risk?
It’s not just a matter of high risk or low risk. It’s also what kinds of risk. Some risks are more tolerable or more important to different investors — and to you. The key types of risk facing companies include:
Market Risk: that the market will not respond to your products or services, because either there is no real market need or the market isn’t yet ready. Market risks are very difficult to overcome.
Competitive Risk: that the competitive situation will change dramatically, and new competitors will enter the market and/or established competitors will reposition their products or services to more effectively take you on. You should carefully think through how other competitors might respond to your entering the market and not assume that the competitive environment will remain the same.
Technology Risk: that the technology or product design and engineering won’t work, or won’t work as well as you envision. This may be critically important to your company’s success, or it may be totally unimportant, depending on the nature of your company, its products/services, customers, and the like. If your business faces substantial technology risks, what is your ability to quickly and effectively improve the technology?
Product Risk: that the product won’t materialize, won’t be finished in time, or won’t work as promised. This is very similar to the above, only with nontechnology products or services.
Execution Risk: that you won’t be able to effectively manage the roll-out and growth of the company because management isn’t sufficiently capable, the time allowed isn’t adequate, operations aren’t in place, and other reasons. You should be able to demonstrate specific steps you are taking to reduce or eliminate such risks.
Capitalization Risk: that you’ve badly underestimated costs or over-estimated income, and you will run out of money. The best way to avoid this risk is to budget realistically and get enough funding so you do not run out of cash prematurely. Look for investors who have the ability and inclination to offer additional funds as your company progresses.
Global Risk: that, when doing business internationally, you may encounter unanticipated situations that will interrupt or stop your ability to do business, reach your market, or receive supplies.
Develop a SWOT analysis for your NAB company using the SWOT matrix worksheet in the course text (p. 153 | SWOT: Strengths / Weaknesses / Opportunities / Threats)
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