exploring business opportunities assignment

5/20/2018 Exploring Business Opportunities Assignment

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Exploring Business Opportunities Assignment

-Ramachandran T, Section A, PGBE Batch 17, EDI

1. How will you identify viable business opportunities? Describe in detail steps involved in the

process.

The existing business opportunities can be identified through the following steps:

Step 1: Preparation of personal profile

Step 2: Development of Opportunity selection(OS) Framework

Step3: Generation of ideas

Step 4: Snap investigation of ideas

Step 5: Evaluating in terms of OS framework and shortlisting of ideas

Step 6: Pre-feasibility studies

Step 7: Opportunity Selection

Preparation of personal profile:

Personal profile describes the basic details of the person such as his education, work experience, his

area of interest and personality. It is also necessary that the individual highlights his objectives of

establishing the enterprise, his current investment preparedness, level of risk taking attitude and his

personal considerations.

Development of OS Framework:

The development of OS framework mentions the following:

Investment

Technological Sophistication

Managerial / Organizational Needs

Market and competition

Sector Preference

Govt. Intervention/ dependence

Implementation time

Profitability

Degree of risk and its form

Location

Personal Considerations

Taboos/Religious sentiments

Life StyleTrader in Agra

Relative Importance of MoneyRestaurant in Ahmedabad


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Amenability to takeover by children

Speculative OrientationEye on land & building

Generation of Ideas:

The ideas can be generated from the following sources:

Natural resources

Existing/anticipated industries

Market-driven

Service sector scanning

Extension/modification of present work content

Creative effort and

Other ways

Snap Investigation of Ideas:

Reading material and journals relevant to the opportunity must be read. The investigation shouldanswer what exactly is the product or services, its application, possible scales of production/operation,

project cost corresponding to a given scale of production/operation, market, unit sale price, degree of

technological complexity, expected annual turnover and expected profit margin.

An information sheet on a given idea should be arrived and that should have the estimates of the above

mentioned.

Evaluation in terms of OS framework and short listing of ideas

Evaluation can be done after the snap investigation of ideas. The viability can be assessed in terms of

the OS framework done. But however, it is not an ideal evaluation as there is always a room for intuitive

judgment and gut feeling.

There can also be some answers found for the questions like whether there can be learning and grip

over the business; what are the key determinants of success and risk factors.

At this stage, one can, often, ill-afford the cost of a comprehensive project-investigation. So, you attach

considerable importance to well-meaning judgment of persons supposedly knowledgeable about a

given opportunity. You should, of course, cross check such judgment.

Pre-Feasibility Study

The purpose of this study is to satisfy regarding the viability of the project, without incurring too

much cost/effort on the exercise. This is an optional stage because, in the course of initial evaluation or

shortlisting,that collected enough information or carried out sufficient/enthusiastic about the shot-listed

idea that you go in for a full-scale feasibility study. It depends on the circumstances

Opportunity Selection

This is the most critical point in the whole OIS process the culminating point. Until now, it

was exploration, elimination, information-gathering and analysis. But after this it is upon investigation

and the opportunity is selected.


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2. a) What are the Sources of Business Ideas?

The various sources of Business ideas are as follows:

1) Natural Resources

It is logical to look for ways of converting natural resources into profitable enterprises. Following

are gamut of natural resources:

Forest

Horticulture

Agriculture

Agro-Waste

Marine Or Aqua

Mineral

Live Stock

Wind

Sun

Human

So, while identifying opportunities based on natural resources, it would be beneficial for you to

pay attention to the following:

(i)

Exploitation- Feasibility

(ii)

Resources-quantification and life

(iii)

Resource specification

(iv)

Resource stability

(v)

Critical infrastructure

(vi)

Commodity/Trading dimension

(vii)

Legal dimension

(viii)

Other dimension

2)

Existing/Anticipated industries

The existing industries might give ideas of the following:

Similar project

Raw material for existing industry

Further processing of output of existing industry

Capital goods for existing industry

Project based on waste or by-product of existing industry

Packaging material for existing industry

Project based on skills/technology developed

While identifying opportunities based on existing industry, one is advised to keep the

following in view:

Outlook For Existing Industry

Ancillary-Parent Industry Syndrome


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Captive Arrangements

Nature Of Decision-Making

Projects In The Pipeline

Motivated Feed-Back

Look Beyond Local Industries For Market

Well-Entrenched Non-Local Supply Industries

3)

Demand-driven or Market-driven Opportunities

Technological advancement, constant upgradation of transport and communication facilities

and growing globalization, all these combine to make opportunity identification, a market-

centred process. Under the market-driven approach, market itself becomes the basis for

opportunity identification. The following methods are popular:

Trade-flows

-

Industrial / services / consumer products- Kerala coconut / rubber products

import substitution

-

Import data, particle boards / toys, consumer

Goods, mosquito racket / glass beads

growth products

-

healthcare products & services, processed foods, entertainment products and

innovative products like; courier services, plastic water tank, sachets, ro plants, rte

vegetables

Product positioning/differentiation

-

Product features / applications / price & quality

-

Groundnut - roasted / vacuum packed, coated

(detergent powder), coconut hair-oil loose to

Bottle, namkins, vicks vaporub, mosquito spray /

Vapouriser

exports

-

Follow others ready-made garments, diamond, leather products

- Limitations of Indian sources: gn aflatoxin, spirits, mango, sugar, large diamond, basis

for imports: pollution, not-grown / manufactured, low labour cost, overseas market

details (www.cbi.nl, trade fairs)

4)

Service sector Scanning

Service needs of an existing industry present an excellence avenue for local entrepreneurs.

These are the needs for which one prefers a local arrangement. The list of the needs is truly long

and includes fabrication, paint, insulation work, lift and shift transport and so on. There is a

prevailing trend in the large scale sector to farm out service contracts rather than make


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permanent investment in physical facilities and/or manpower. The demand-supply statistics on

service enterprises are woefully inadequate.

5) Extension/modification of present work-content

Thus is a popular and natural approach for identification, particularly in the context of small

ventures. It assumes the following forms:

Skill-based self-employment such as Carpenter, electrician etc.

Marketing to production such as traders, salesmen

Managing or working in a similar enterprise such as supervisor, chemist, engineer (atul-dyes

and intermediates)

6) Creative effort

The following are some patterns of creative opportunity identification:

Development of problem-solving through products/service like aqua guard, domestic flour mill

Exploitation of new technology or material to meet a widely felt need like vending machines,

PVC footwear, soya milk

Creating a demand for a psychological product like mood ring, cease fire

2. b) List out the errors commonly made by entrepreneurs in identification of opportunities

The errors commonly made by entrepreneurs in identification of opportunities are :

Lack of ownership

Catch the first bus

Inaccurate information

Ahead of times

Unwillingness to step back

2. c) What information sources you will use to make a market survey of your consumer

product?

The sources of information can be any of the following:

Market related

Technical analysis

Financial feasibility

Business opportunity identification

Govt. policy & procedure

It is useful to refer to a ready list of

Over 700 industries reserved for small scale sector

Opportunities in the nature of low-technology/low-investment ideas

Over 300 ideas for mini/micro enterprises


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Nearly 200 service-enterprise ideas

3. a) Expand the following:

ONGCOil and Natural Gas Corporation

CAGRCompound Annual Growth Rate

DRDODefense Research and Development Organization

CIIConfederation of Indian Industry

FICCIFederation of Indian Chamber of Commerce and Industry

MSMEMicro Small and Medium Enterprises

MOFPIMinistry Of Food Processing Industries

UNIDOUnited Nations Industrial Development Organization

KVICKhadi and Village Industries Commission

CFTRICentral Food Technological Research Institute

IREDAIndian Renewable Energy Development Agency

CSIRCouncil of Scientific and Industrial Research

NHAINational Highway Authority of India

WTOWorld Trade Organization

BARCBaba Atomic Research Centre

3. b) List out natural resources used to identify business opportunities and give three

business ideas on each natural resource.

Forest Resources

Major forest produces like Timber, Wood, Bamboo, Rubber etc.

Minor forest produces like Honey, Medicinal and Aromatic plants, Natural Fibers, Minor Oil

Seeds, Tree leaves and bark

Opportunity: Designer furniture; Herbal cosmetics and Forest tourism

Horticulture

Business Opportunities based on inputs, outputs and waste/ by-products.

Inputs like nutrients, insecticides, nursery plants, irrigation facility, tools and equipments.

Outputs like fruits, vegetables, wastes and by- products

Business Opportunities in processing of fruits, vegetables and by-products; Floriculture and

value-added products like dry flowers, extraction of oils, flower based pharma and nutra

compounds, natural dyes and pot porri (a mixture of dried, scented flowers, leaves, seeds, stems

& roots of flowering plants)


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Agriculture

70% population depends on wide variety of agriculture operations

Agriculture produces like paddy, wheat, oil seeds, sugarcane, cotton, pulses etc. offers huge

opportunity in primary and secondary processing, storage, transportation, etc.

Inputs like certified seeds, fertilizer, pesticides, irrigation facilities, agricultural implements,consultancy and services like soil and water testing, agronomy, hydrology, etc

Agro Waste

Agro waste such as paddy husk, straw, wheat straw, sugarcane bagasse, cotton stalk, groundnut

husk etc. offer vast opportunities for processing and converting into commercial and industrial

products

Business opportunities depend on the availability and quality of agro waste in a given location

Marine and Aqua

Long coastal line offers wide and varied business opportunities based on marine coastal line

Products such as salt, gypsum, marine chemicals, sea weeds, fish and marine animals offer vast

industrial opportunities.

Tourism related business opportunities such as water sports, diving, surfing, boating, etc. are

commercially exploited.

Mineral

India has vast resources of minerals such as coal, iron ore, bauxite, mica, lime stone, marble and

granite stone, soap stone, graphite, mineral oil and gas etc.

Each mineral depending on available quantity and quality offers business opportunities in

mining, processing, transportation and other logistics

Mining equipments, tools, testing laboratory, safety equipments and gadgets, prospecting

services etc offer huge opportunities

Live Stock

Livestock includes poultry, cow, buffalo, goat, sheep etc.

Poultry Farms, Dairy Farms, Raising other animals, Slaughter house, animal feeds etc. offer huge

opportunities as it is always in short supply.

By-products such as bones, leather, horns and huffs, animal hair, blood etc. also are of

commercial importance

Wind/solar Renewable Energy

Renewable sources of energy are very important for green environment.

Wind power generation is possible where sufficient wind velocity is available to run wind mill.

Opportunities are in construction, erection, installation, repairs and maintenance of wind mills.


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Solar energy offers opportunities to generate electricity and run gadgets such as PV Cells based

water pumps, lighting, battery chargers, roof top power generation, lantern, solar hot water

systems and dryers etc

4. a) Draft out your personal profile with justification. How it is useful to identify

opportunity?

1. Name : Ramachandran T

2. Education : B. Tech (Electrical and Electronics Engineering)

3. Work experience Shift Team Leader in Coated Glass

Manufacturing Plant at Saint-Gobain Glass IndiaLimited (25 months)

4. Other Academic / Practical Interests Manufacturing and Tourism

5. Personality Hard-working. Dynamic. An upper middle-classbackground. Parents and close relatives are eitherjob-holders or professionals. Initial financial

assistance and moral support assured by parents.But cannot expect support either in terms of term-loan tie-up, market- entry or emergency financial

assistance.

6. Objectives for establishing anenterprise

To earn a lot of money. There is optimism that ifhe works hard and makes sacrifices now, he willreap a good harvest in a few years.

7. Investment Preparedness Own fund of Rs.15 lacs can be committed tobusiness

8. Attitude to Risk-taking Low risk attitude

9. Personal Considerations Wants to set it up in / around the city where helives- Partnership based on the skills of the partner


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4 b) List three names of

[i]Export Promotion Councils

Electronic & Computer Software Export Promotion Council

Gems & Jewellery Export Promotion Council

Handloom Export Promotion Council

[ii]Financial Daily

The Economic Times

The Financial express

Business Line

[iii]Journals on Trade and Industry

Business Today

Fortune India

India today

[iv]Industries Associations

Internet Service Providers Association Of India

Indian Small Scale Paint Association

Silk Association Of India

[v]Chambers of Commerce

The Cochin Chamber Of Commerce & Industry

Indian Merchants Chamber

Gujarat Chamber Of Commerce And Industry

[vi]Institutions/organizations helping entrepreneurs

City and Industrial Development of Maharashtra Ltd. Mumbai (CIDCO)

Pondichery Industrial Promotion Development and Investment Corp. Ltd.

Madras Export Processing Zone

[vii]Trade Fairs

Emat International

Electronica India

IITF India International Trade Fair


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5. a) Explain the following terms:

Breakeven Point:

Break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or

gain, and one has "broken even." A profit or a loss has not been made, althoughopportunity costs have been

"paid," and capital has received the risk-adjusted, expected return.

Payback period:

Payback period incapital budgeting refers to the period of time required to recoup the funds expended

in an investment, or to reach thebreak-even point.

Scalability:

Scalability is the ability of the business to grow and accommodate that growth.

5. b) Would you prefer to use Primary information or Secondary information in preparing a

Project Profile? Why?

The information universe contains many different types of information. Some of this information is

characterized as primary information, whilst some is characterized as secondary information.

Primary Informationis first-level literature such as journal articles, conference papers, and theses.

It also includes direct data, theories, or artifacts.

Secondary Informationreflects upon, analyses, criticizes or reports upon the primary literature. It

includes review articles, textbooks, and some databases

For our project profile to be of a good standard, we should ensure that we strike an effective

balance between primary and secondary sources. Relying too much on one type of resource may

create problem in our business.

5. c) Indicate whether the following items are:

(a) Cost of Project

(b) Means of Finance

(c) Fixed Cost

(d) Variable Cost

(e) None of these.

You may write your answer against each item as a, b, c, d or e.
http://en.wikipedia.org/wiki/Opportunity_costhttp://en.wikipedia.org/wiki/Capital_budgetinghttp://en.wikipedia.org/wiki/Break-even_(economics)http://en.wikipedia.org/wiki/Break-even_(economics)http://en.wikipedia.org/wiki/Capital_budgetinghttp://en.wikipedia.org/wiki/Opportunity_cost


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Sr.

No.

Item Answer (a, b, c, d or e)

1 Promoter Funds B

2 Land A

3 Telephone expenses D

4 Tuition fees paid for brothers

education

E

5 Business Inauguration expenses A

6 Loss of stock due to rain waterdamage

E

7 Security deposit to landlord A

8 Raw Materials D

9 Trade mark renewal fees C

10 Packing material consumed D

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