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Scenarios...From the Syllabus

{....from your syllabus for MGT 2500....}

"....Be aware that the difficulty with some proposed ventures is the lack of good data.  For the financial sections you may need to make assumptions and projects as best as you can.  In these cases it is perfectly acceptable to make as many assumptions or extrapolations as you need, but identify them to the class and the instructor.

For the financial section a good approach is to make three separate financial scenarios, a best case, a realistic case and a worst case scenario.   The best case scenario uses the most favorable assumptions of market demand, economic conditions, and internal use of financial resources.  

The most realistic scenario uses realistic assumptions for market demand, the economy, and financial uses of resources.  The worst case scenario assumes that many or most of the above assumptions will not occur or that the demand for the product or service will be much less than needed.  It is also very helpful to construct a financial scenario at breakeven and then compare the breakeven to the above three.  To which scenario is it closest?...."

--David Lynn Hoffman

 

      

    Situation Analysis

    Situation Analysis  

    The main environments investigated in the Situation Analysis are market, industry and firm.  However, the Situation Analysis also considers relevant issues and trends in the macro environment.  A brief overview of these environments follows.  

    The Situation Analysis sets out the facts that are the bases for all future analyses in subsequent sections.  That is, with the exception of any primary research, all data reported in subsequent sections of the Marketing Plan should be traceable to the Situation Analysis, including current financial performance. 
     
    Market Background / Customer or User

    Business Source Premier SWOT

     









      

    Example: Business Source Premier Search Result

    Develop a working understanding of the customer or user.  Use Business Source Premier for a SWOT analysis, industry profiles, market research reports or product reviews.

    Questions to Ask 

    Develop a working understanding of the customer or user.  Use Business Source Premier for a SWOT analysis, industry profiles, market research reports or product reviews.  

    • Who are the people with the the problem we are looking to solve?
    • How do they currently solve that problem?
    • Why do they choose one solution over another?
    • How much value do they perceive in currently used solutions?
    • What needs to change in terms of the value function for them to consider your product

       
    Industry / Competitor Analysis   

    Investigate high-level factors like those reflected in Porter's 5-forces model: Forlani_New_Lexis_Nexis_2010  
    1. Rivalry among competitors
    2. Threat of new entrants
    3. Availability of substitutes
    4. Bargaining power of buyers
    5. Bargaining power of suppliers


    Internal Analysis of the Firm 

    Who We Are....

    Who We Are Not
       

    Consider our firm's past performance and the reasons for those outcomes.  Then analyze our firm as if we were a competitor.

      
    Macro Environment and Relevant Trends
      

    Many firms have failed or not performed as we expected by overlooking trends in their macro environments.  To avoid this fate, look at those factors that Porter identifies related to industries. For example:  Changes in long-term growth rates; Key buyer segments; Costs and efficiencies; Relevant government regulations; Rates at which proprietary knowledge is diffusing. You also want to consider trends related to markets such as changes in:  Cultural or Demographic factors; Social or Lifestyle factors; Economic issues; Legal or Political concerns; Physical environment.

     

        
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