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Business Plan Preparation Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado 1 Market & Industry Analysis.

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Presentation on theme: "Business Plan Preparation Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado 1 Market & Industry Analysis."— Presentation transcript:

1 Business Plan Preparation Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado 1 Market & Industry Analysis

2 Tonight’s Agenda Topics Market Analysis Industry Analysis Competitive Advantage Opportunity/Need Segmentation Financial Comp’s Model Company Gene Hayworth – Leeds Librarian Hand-in Interview List 2

3 Market & Industry Analysis Next Week Topics Value Proposition Competitive Advantage Business Analysis Customer Research Model Company Read BP pp 11-13, 27 University Parent Plan – Sarah Schupp In the Fire - Opportunity/Need Write Value Proposition 3

4 Market & Industry Analysis In the Fire - Opportunity/Need Focus on what are the needs in the market What is the pain? What problem must be solved? Is there dissatisfaction - poor quality or service Need must be: Compelling Easily understood by TM 4

5 Business Plan Elements Executive Summary Company Overview Market & Industry Analysis Product/Service Description Marketing Plan Operations Plan Development Plan Management Competitive Advantage Financial Plan Funding 5 Market & Industry Analysis

6 Market & Industry Market: “group of current and potential customers having the willingness and ability to buy product/services to satisfy a need.” = Customers Industry: “group of sellers that offer product/services that are similar and close substitutes for one another.” = Competitors JW Mullins, New Business Road Test 6 Market & Industry Analysis

7 Market Analysis = Customers Market size & growth Trends Entry Point 7 Market & Industry Analysis

8 Market Size & Growth Segment your market Historic and future growth Must indicate sources Lot’s of numbers – show in tables 8 Market & Industry Analysis

9 Market Segmentation Groups of customers – (demographics & psychographics) baby boomers, grandparents Products – features, benefits, prices Benefits – enhance image, trend setter, weather protection, save money Geography – see Hecho en Casa business plan Distribution channels Sector – industrial (see MRT business plan), consumer, government 9 Market & Industry Analysis

10 10Market & Industry Analysis

11 Trends What changes are taking place – economic, socio-cultural, political/legal, global, environmental, demographic, technological Positive and negative trends Must provide your sources 11 Market & Industry Analysis

12 Identify Potential Entry PointIdentify Potential Entry Point Describe best segment. Why? Future segments 12 Market & Industry Analysis

13 Industry Analysis = Competition Industry Structure Competitive Environment Competitors 13 Market & Industry Analysis

14 Sources Suppliers Manfg Distrib Retailers Consumer Goods Information Funds A T Kearney, Integrating the Supply Chain Industry Structure Supply Chain 14 Market & Industry Analysis

15 Competitive Environment How do companies compete – quality, price, new products, customer service Degree of rivalry Response to new entries 15 Market & Industry Analysis

16 Barriers to Entry? Economies of scale: manufacturing, marketing, technological Customer loyalty: well established brands, long established relationships Agreements with customers, suppliers, strategic partners Switching costs Capital requirements: high investment 16 Market & Industry Analysis

17 Barriers to Entry (continued) Access to distribution channels: exclusive distribution agreements, dominant position of competitors Intellectual property: patents, trade secrets, copyrights, trademarks, know-how Government regulations: defense contracts, import restrictions Industry hostility to new entrants. Will use all means to drive out new competition: pricing, legal, spreading rumors 17 Market & Industry Analysis

18 Control Setting prices – bargaining strength of customers Lowering costs – technology, process design, resources, bargaining strength of competitors Channels of distribution – access, creating new channel 18 Market & Industry Analysis

19 Competition Describe key competitors Direct, indirect, future Prepare a competitive matrix Product/Services Marketing Management Financial Image – website, brochures, literature, advertisements Inertia 19 Market & Industry Analysis

20 Market Market size & growth Trends Entry Point Industry Industry Structure Competitive Environment Competition Opportunity 20 Market & Industry Analysis

21 Opportunity Last section Make case attractive opportunity - validate Draw conclusions based on your research, interviews and customer surveys 21 Market & Industry Analysis

22 Financial COMP’s Company in your marketplace. NAIC code Publicly traded Industry ratios – see Selected Resources Guide Library Key financial measures to compare when developing strategy and projections Reality test 22 Market & Industry Analysis

23 Financial COMP’s 23Market & Industry Analysis

24 Needs Market & Industry Analysis24 Physical: food, warmth, shelter, sleep, etc. Physiological: health, cleanliness, comfort, fitness, safety, etc. Emotional: euphoria, love, prestige, stress, etc Social: ethical, honesty, power, competitiveness, integrity, friendship, etc. Intellectual: achievement, better decisions, artistry, etc. Economic: revenues, productivity, cost savings, maintenance, etc. Financial: ROI, DCF, payback, burn rate, etc.

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