Generation and Screening

8/3/2019 Generation and Screening

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Generation andGeneration andscreening of projectscreening of project

ii


2/22

RightRight

Business AtBusiness At

Right TimeRight Time


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1 Generation of ideas1 Generation of ideas

Swot Analysis

Cost Reduction

Productivity Improvement

Increase in Capacity Utilization

Improvement in Contribution Margin

Expansion in to Promising Fields


4/22


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Fostering conducive Environment

Tap the creativity of people

Harness their entrepreneurial urges

Motivate to think out out box


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(A) Economic Sector

State of the

Economy

Overall

growthrate

Growth rateof primary

And tertiary

Sectors Cyclical

fluctuations

linkage

as the

work

economy

Trade

surplus/defects

BOP situations


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(B) Govt. Sector

Industrial policy

Govt. Programme - Tax and project

Tax framework

Subsidies Incentives and concessions

Import & export policies

Financing norms

Lending conditions of FIs & CBs


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(C) Technological Sector(C) Technological Sector

Emergence of new technologies

Access to technical know how-foreign aswell as indigenous

Receptiveness on the part of Industry


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(D) Socio Demographic Sector

Population trends

Age shift in population

Income distribution

Educational profile

Employment of women

Attitude towards consumption and

investment


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((E) CompetitionE) Competition

No. of firms in the the industry and market

shares

Degree of homogeneity and differentiationamong products

Entry barriers

Comparison with substitutes in terms ofquality price appeal and functional

performance

Marketing policies and practices


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((F) Supplier SectorF) Supplier Sector

Availability and cost of

raw material

sub assemblies

Energy


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3.Corporate Appraisals3.Corporate Appraisals

A. Marketing and distribution

Market image

Product line

Market share

Distribution network

Customer loyalty

Marketing and Distribution costs


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B. Production & OperationsB. Production & Operations

Condition and capacity of plant and machinery

Availability of raw Materials, sub-assembliesAnd power

Degree of vertical integration

Location advantage

Cost structure


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C. Research & DevelopmentC. Research & Development

Research capabilities of of the firm

Track record of new product development

Laboratories and testing Facilities

Coordination between Research and operations


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D. Corporate Resources & Personnel

Corporate image

Clout with governmental and Regulatory

services

Dynamism of top management

Competence & commitment of Employees

State of industrial relations


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E. Finance and AccountingE. Finance and Accounting

Financial leverage and Borrowing Capacity

Cost of capital

Tax situation

Relations with share holders and creditors

Accounting and control system

Cost flow and liquidity


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Profit Potential of Industries: Porter ModelProfit Potential of Industries: Porter Model

Forces Driving Industry Competition

Potential

entrants

Threat of newentrants

Suppliers

Bargainingpower Of

suppliers

The Industry rivalry

among Existing firmsBuyers

Bargainingpower of

buyers

Substitutes

Threat ofsubstitute

product


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BOTTLENECKSBOTTLENECKS


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Factors which affect the exerciseFactors which affect the exercise

for an effective project formulation.for an effective project formulation.

project not fitted in overall socio-economic

development of country

Frequent changes in a host of Govt.

directives, licensing procedures, import and

export obligations, pricing controls etc

Political stalemate in the country

Non-preparation of detailed project

reports


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Manipulation of project report by giving wrongManipulation of project report by giving wrong

assumptions regarding life of the project, costassumptions regarding life of the project, cost

structure, ROI, SCB etc.structure, ROI, SCB etc.

Use of inappropriate project technologyUse of inappropriate project technology

Application of sophisticated technology leadingApplication of sophisticated technology leadingvast investments right from the start.vast investments right from the start.

Selection of optimal size of plants without keepiSelection of optimal size of plants without keepi

an eye on market conditions.an eye on market conditions.

No planning of product mix at initial stageNo planning of product mix at initial stage


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Market analysis based on hunches andMarket analysis based on hunches and

guessguess

Sudden changes in market conditionsSudden changes in market conditions

Financial projections too much exaggeratedFinancial projections too much exaggerated

Underestimating project costUnderestimating project cost

Delay in collaborating with foreignDelay in collaborating with foreign

collaborators for technical assistance.collaborators for technical assistance.

Frequent transfers of top managementFrequent transfers of top management

engaged in project formulationengaged in project formulation


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Promoters ability to take up new venturesPromoters ability to take up new ventures

not assessed in proper perspectivenot assessed in proper perspective

Promoters tendency to spend lavishly inPromoters tendency to spend lavishly in

initial stages of project formulation.initial stages of project formulation.

Over ambitions plans of promoters.Over ambitions plans of promoters.

Documents

Generation and Screening