Individual Project Guide: Comprehensive Venture Portfolio
(80% of Final Marks)
Business Feasibility Study: From Needs Assessment to Business Model Canvas. The Assignment should be done on either an existing MSME or a Business concept that you developed that is ready to move from concept to reality.
Note: All components carry equal weight
Description:
Understanding how to move an idea from a concept into a viable and sustainable enterprise is critical for the survival of new ventures. This module is designed to employ the experiential learning technique to immerse participants in a five-step process of moving from a business idea to developing and to the creation of a business model. The Assignment will cover 4 key areas.
1. The Entrepreneurship Process
2. Conducting a Needs Assessment
3. Conducting a Feasibility Analysis
4. Business Model Canvas
Objectives: On completion of this course students should be able to:
• Explain and detail the entrepreneurship process
• Explain and conduct a needs assessment of a business venture
• Conduct a feasibility analysis of a business venture
• Develop and explain a business model for a venture
List of Modules
1. The Entrepreneurship Process
The entrepreneurship process is critical in understanding how one moves from an idea to the actual implementation and harvesting of the business idea. On completing this module participant will be able to:
• Develop the business idea
• Assess the market to ascertain if the opportunity exists for the idea
• Develop the business concept
• Identify the required resources
• Understand where to access the resources
• Implementing the idea
• Harvesting the business
This module will be delivered over a two hour period, in which the participants are expected to assess their ideas using the entrepreneurship process.
Deliverable – participants are expected to provide a submission detailing their idea based on the entrepreneurship process. This is too be submitted as part of the Business Portfolio
2. Needs Assessment
A good idea might not necessarily be the most viable idea given the time, space and context. As such, it is critical to ascertain whether a need really exists for this idea. On completing this module participants will be able:
• to conduct a needs assessment detailing three critical components
o Is there a need for the product or service
o Is it being adequately met or not
o If yes, how could you meet it more effectively, if no how will you meet that need and remain competitive
• Transfer knowledge learnt to other community members
Deliverable – participants are expected to develop a needs assessment of their idea and submit it as part of their business portfolio.
3. Feasibility analysis
Even if a need exists for a good or service, this might not be a feasible business idea. As such a feasibility analysis should be conducted before attempting to implement a business venture to satisfy that need. On completing this module, participants will be able to:
• Conduct and explain the following components of a feasibility analysis:
o Market feasibility
o Industry feasibility
o Financial feasibility
o Cultural and environmental feasibility
Deliverable – participants are expected to develop a feasibility analysis of their business idea and submit it as part of their business portfolio.
4. Business Model Canvas
Given that a business idea is deemed feasible, there is the need to develop a framework which gives meaningful insights as to how the business will meet its core objectives. Business models are used to detail this process. On completing this module:
• Participants will be able to detail the business model for their business idea and complete the following questions:
o How does the business create value?
o For whom does it create value?
o What is its internal source of competitiveness?
o How does the business differentiate itself?
o How does the business make money?
o What are the time scope and ambitions of the business?
In detailing the canvas, they would address the ten components outlined below:
1. Key Activities
2. Key Partners
3. Value Propositions
4. Customer Relationships
5. Customer Segments
6. Key Resources
7. User Segments
8. Channels
9. Cost structure
10. Revenue Streams
Deliverable – participants are expected to develop the business model for their business idea and submit it as a part of their business portfolio.
Typography and Layout
Your MGMT 2224 final report will be testimony of your careful attention to detail and effort to present polished written work. Guidelines for the layout of your report are listed below
Order of Items Notes
Appearance
1 Title page Use cover template.
2 Statement of Accountability
Place on its own page
3 Abstract Use single line spacing
4 Acknowledgements Optional
Place on its own page/s
5 Table of Contents Make use of white space to ensure that each item stands out
List only those items that follow the Table of Contents
(You can auto-generate Table of content from Microsoft word to ensure accuracy)
Place on its own page/s
6 List of Figures
(if applicable) Make use of white space to ensure that each item stands out
Place on its own page/s
7 List of Tables Make use of white space to ensure that each item stands out
Place on its own page/s
8 List of Order items alphabetically
Abbreviations Make use of white space ensuring that items stand out
9 Treat each item as a Chapter with sub-sections where
needed
Number Chapters using Level 1 headings
Number sub-sections using Levels 2 to 3 headings.
Beyond Level 3 the information hierarchy becomes difficult to follow. Avoid!
Use double-line spacing
Place captions for diagrams below the item
Place captions for tables above the table
You may have chapter variations, either more chapters or
differently named chapters: These need to be verified by your
Supervisor. However you name your chapters, you must have
an introduction
10 Appendices Place each appendix on its own page
Label each appendix alphabetically – Appendix A etc.
Suggested Body Outline
1.0 COMPANY CONCEPT AND BACKGROUND
1.1 BUSINESS SUMMARY
Name of Business Registered name
Type of Business Limited Liability Company /sole Proprietor/etc.
Nature of Business What are the core
Industry /Sector Tourism / Transportation /etc.
Business Registration Number If registered
Registration Date If registered
Business Location Registered address
Business Ownership Registered owners
Contact Person May or may not be the registered owner
Phone Number
Email Address
Certificate and Membership
1.2 COMPANY CONCEPT / BACKGROUND
1.3 MISSION STATEMENT
1.4 BUSINESS GOALS (write in the spaces below)
1.5 OUR SERVICES: WHAT THE BUSINESS OFFERS
1.5 ENTRY AND GROWTH STRATEGY
1.6 GUIDING PRINCIPLES
(Help the Entrepreneur/business owner to develop at least 4 of these if they are not in existence)
1.7 OUR UNIQUENESS: VALUE PREPOSITION
Section 1
1.0 Entrepreneurship Process and the Business Model
Make comments relating to the Business you are analyzing that would explain its specific framework of the Entrepreneurial process. Additional narrative can be added at the end of the table if needed.
Annex: II – Framework of the entrepreneurial process
Stages Key decision variables or alternatives Comments
Identify an opportunity • Changing demographics
• Emergence on new market segments
• Process needs
• New technologies
• Incongruities
• Regulatory change
• Social change
Develop the concept • New products
• New services
• New processes
• New markets
• New organizational structure/ forms
• New technologies
• New sales or distribution channels
Determine the required resources • Skilled employees
• General management expertise
• Marketing and sales expertise
• Technical expertise
• Financing
• Distribution channels
• Sources of supply
• Production facilities
• Licenses, patents and legal protection
Acquire the necessary resources • Debt
• Equity
• Leveraging
• Outsourcing
• Leasing
• Contract labor
• Temporary staff
• Supplier financing
• Joint venture
• Partnership
• Barter
• Gifts
Implement and manage • Implementation of concept
• Monitoring of performance
• Payback of resource providers
• Reinvestment
• Expansion
• Achievement of Performance goals
Harvest the venture • Absorption of new concept into mainstream operations
• Licensing of rights
• Family succession
• Sell venture
• Go public
• Shut down venture
The table above ‘Framework of the Entrepreneurial Process’ reflects the entrepreneurial process which has six stages: “the first two, opportunity identification and business concept development, represent the ideation phase of the process. The entrepreneur is attempting to identify patterns or forces in the environment that represents profit potential, and to develop a creative means of capitalizing on that potential. The remaining stages are concerned with implementation. Thus, the entrepreneur assesses and acquires the necessary resources, implements the concept, manages the business, and eventually harvests the venture. While creativity is perhaps most associated with the beginning of the process, and especially with the development of the concept, in practice it is the subsequent stages that often require the most innovative and risk-taking behaviours on the part of the entrepreneur… it also provides key decision variables or alternatives that come into play at each stage in the process Morris, Kuratko and Schindehutte 2001, (p.39).
Section 2
2.0 Needs assessment
(This section should be guided by the following questions and the presentation style should reflect creativity and thought.)
2.1 Needs Assessment Worksheet
Have you assessed the needs of the market? ____________________________________
Are you answering an existing need or creating something entirely new and unexpected? _______________________________________________________________________
How is the problem being solved today? _______________________________________
________________________________________________________________________________________________________________________________________________
What unique or superior solution does it offer the marketplace? ____________________
________________________________________________________________________________________________________________________________________________
Do you know the product competition? ________________________________________
Have you identified the barriers to entering the target market? ______________________
________________________________________________________________________
Have you identified distribution channels? _____________________________________
________________________________________________________________________
Do you know the pricing criteria? ____________________________________________
________________________________________________________________________
Are consumers able and willing to pay for your solution? _________________________
________________________________________________________________________
3.0 Feasibility Study
(This section should cover the following areas and should be guided by the following)
3.1 Business Overview
• Describe the product/service stage of development ¬
• What is unique about the product/service?
• Describe the product benefits and its limitations Describe the production process
3.2 Internal Profile Analysis
For the company you are analysing complete the following Table and make
Recommendations based on your findings.
Strong Weaknesses Slight Weaknesses Neutral Slight Strength Strong strength
Financial
Overall Performance
Ability to raise Capital
Working Capital
Financial Position
Marketing
Market Performance
Knowledge of Market
Advertising and promotion
Price
Distribution
Organisational and Technical
Location
Production
Facilities
Access to suppliers
Inventory Control
Human
Number of Employees
Relevance of Skills
Morale
Compensation Packages
Based on the Analysis make five (5) recommendations to the company’s management that
are justified by your internal profile analysis
3.3 The Market
3.3.1 Industry Analysis
The focus here is on what is happening in, and the relative attractiveness of, the industry as a whole. You are looking at the entire local industry but must look at the regional and global industry as well. As such, this section does not involve any description of your company or your local market. This section needs to be guided by the following information:
• Summarize the industry in which the business operates or will operate.
• How is the industry constructed/segmented?
• Discuss briefly industry size (in dollars) and annual growth rate (%); Where is the industry in its life cycle– -emerging, early growth, rapid growth, early maturity, maturity, decline?
• Discuss the structure of the industry at present.
• How concentrated or fragmented is the industry?
• How many players are there, and how many are large versus small?
• Who are the largest and most important players in the industry?
• Outline Porter’s 5 forces and draw conclusions.
• Provide a diagram of the value added chain to illustrate the key players in the industry.
• Highlight key trends in the industry.
• Are costs going down or up? What about prices? Discuss any new products or developments, the rate of new product development, new markets and customers, new selling approaches, new pricing methods, new requirements or regulations, new entrants and exits, new technologies, and any other national or economic trends and factors that could affect the venture’s business positively or negatively.
• Determine the key success factors for the industry and draw conclusions.
3.3.2 Market Analysis
Identify target market
Give profile of customers and their unmet needs
Describe marketing strategy
3.3.3 Competitive Analysis
Identify major competitors and compare in terms of:
Competitor Price Quality Location Product line Reliability
(Develop the grading scheme that you will use to compare the competitors)
Competition and Competitive Edges
• Identify direct and indirect (and potential) competitors. DO NOT INDICATE THAT THERE IS NO COMPETITION. Make a realistic assessment of their strengths and weaknesses. Discuss the 3 or 4 key competitors and why customers buy from them, and determine why customers might leave them.
• Assess the substitute and/or alternative products/ services and list the companies that supply them, both domestic and foreign, as appropriate.
• Discuss the current advantages and disadvantages of competitor products and the extent to which they are not meeting customer needs.
• Compare competing and substitute products or services on the basis of market share, sales, distribution methods, economies of scale, and production. Review the financial position, resources, costs, and profitability of the competition and their profit trends.
• Compare also important attributes such as quality, price, performance, delivery, timing, service, warranties, and pertinent features of your product/service with those of competitors.
• Compare the fundamental value that is added or created by your product or service, in terms of economic benefits to the customer and to your competitors.
• Indicate any knowledge of competitors’ actions, or lack of action, that could lead you to new or improved products and an advantageous position. Why aren’t they doing what you will be doing? Discuss whether competitors are simply sluggish or non-responsive or are asleep at the wheel.
• Indicate who are the service, pricing, performance, cost, and quality leaders. Discuss why any companies have entered or dropped out of the market in recent years.
• From what you know about competitors’ operations, explain why they are vulnerable and why you can capture a share of their business. What makes you think it will be possible to compete with them.
3.4 Core Feasibility Analysis
Complete the Following Analyses on the business you are analysing and provide a basic narrative on each section after (Chapter 9, page 272 of the main course text (Kuratko) will provide you with a useful guide for most of this exercise):
Technical Feasibility Analysis Market Feasibility Analysis Financial Feasibility Analysis Cultural feasibility analysis
Finances
Write assumptions for financial statements _____________________________________
________________________________________________________________________
________________________________________________________________________
Determine financing needs _________________________________________________
Determine sources of financing _____________________________________________________
Section 4
4.0 Business Model Canvas
The business model canvas is a user-friendly tool that captures critical elements of the business’ model. It clearly defines the value that the business presents and the critical supporting elements. Each Section a
BUSINESS MODEL CANVAS
Business Idea: What for whom and how?
Product / Service Idea: Key functionality of the product / service.
Key Partners
Who are our Key Partners?
Who are our Key Suppliers?
Which key resources are we acquiring from partners?
Which key activities do partners perform?
Motivation for partnership:
Optimization and economy
Reduction of risk and uncertainty
Acquisition of particular resources and activities
Key Activities
What Key Activities does our: Value proposition require?
Distribution Channels require?
Customer Relationships require?
Revenue Streams require?
Categories:
Production
Problem solving
Platform/Network
Value Propositions
What value do we deliver to the customer?
Which one of our customer problems are we helping to solve?
What business products and services are we offering to each Customer Segment?
Which customer needs are we satisfying?
Who are our competitors and how are we different?
What is our pricing strategy?
Characteristics:
Newness
Performance
Customization
“Getting the job done”
Design
Brand/Status
Price
Cost reduction
Accessibility
Convenience/utility Customer Relationships
What type of relationship / resources do each of our Customer Segments expect us to establish and maintain with them?
Which ones are established?
How are they integrated with the rest of our business model?
How costly are they?
Examples:
Personal Helpance
Dedicated personal Helpance
Self-service
Automated services
Communities
Co-creation e.g. Wikipedia site – customers are able to edit content Customer Segments
For whom are we creating the value?
How many potential paying customers?
Who are our most important paying customers?
How big a market share could you capture in what time frame?
Mass Market
Niche Market
Segmented
Diversified
Multi-sided Platf+orm
Key Resources
What Key Resources do our Value Propositions require? Distribution Channels require? Customer Relationships require?
Revenue Streams require?
Channels
Through which channels do our customer segments want to be reached?
How are we reaching them now?
How are our channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines? User Segments
For whom are we creating the value?
Who are our most important end users?
How many potential users?
Mass Market
Niche Market
Segmented
Diversified
Multi-sided Platform
Cost Structure
What are the most important costs inherent to our business?
Which key resources are most expensive?
Which key activities are most expensive?
Revenue Streams
For what value are our customers really willing to pay? How much?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each revenue stream contribute to overall revenues?
After completing the Business model provide at least 4 recommendations that you could use to improve on the business model of the MSME Studied and justify why you think these recommendations would make the model better.
