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The profitability analysis of society is a boring topic. But this is also the most important part of your business and marketing plans, in which direction the market environment has the potential of supply and demand, and scope out your potential decisions to the market. Note that financial modeling is beyond the scope of this article.
I have the economic feasibility analysis separated into two main categories, namely the valuation models for synthesis and Your DomainBusiness valuation models. The first includes Porter's five competitive forces model, PEST analysis. The second includes the SWOT analysis matrix, Target Segment Analysis, Product Life Cycle Analysis, Competitive Advantage Model, Product Growth Directions, BCG Matrix. Both series of models that will help qualify if the company is valid on market demand and market opportunities of supply.
1. Porter's five competitive forces model
Porter's five competitiveForces model of Michael E. Porter, a strategic analysis of prospects for broader context of the developed market. It explores the five main factors namely the bargaining power of suppliers, customers who buy power on / New entry threats, threats of replacement rivalry and competition.
The five forces of influence are interdependent, and interacting with each other at any given time. This is a model which will be reviewed on a consistent basis, usually takes about a year and a halfDeadline for re-evaluation of market trends.
2. PEST analysis
Click the "pest control" ensures good health is a major boost for the company. PEST analysis means, in essence, the macro analysis and the political and legal, economic, social, cultural, technological.
Economic environment could make or break your business. In 2008, the subprime problem is a global financial crisis, which affected not just the housing market, butvirtually all aspects of the economy because of their spill-over effect. The interest rate to cry at the time of writing, 2%, far from 4% a year ago. Banks tighten their belts in lending and loan business loan has become more difficult to obtain. But if you can get the business loan, you must be a refund of much lower interest.
One factor in-line, more and more important is the environment. Every big company today are involved in one form or the reductionemissions of carbon dioxide and ozone in climate change.
3. SWOT Analysis Matrix
SWOT stands for strengths, weaknesses, opportunities and threats your business. Strengthening domestic capacities in component analysis of all business functions that may be the only record in which the mapping business strategies. Weaknesses internal gap analysis at present. Similarly, opportunities and threats analysis of your companythe external environment that could give rise to opportunities or threats for the company. It is a liquid cheat sheet (not completely exhaustive and should add to their own industry fair), which should be reviewed annually as a reality check stop-shop.
4. Target segment analysis
This is a very critical part of the marketing plan that will help you with your market segmentation and define your target markets. Define your segment &customer base in target groups of primary and secondary market with demographic and psychographic information. The demographics are age, income, geographic location, etc. Psychographic data include needs throughout life, lifestyle, purchasing habits of consumers, etc. Once done, there would be a better measure of the potential size of target segments. You can simply use the segments to fit your products, thus expanding its segment for more potential.
5.Competitive advantage model
The model of competitive advantage by Michael E. Porter proposes four approaches to benchmarking against your competitors, cost leadership, differentiation or focus with 2 variations.
cost leadership strategy: a policy of cost price within your industry leader. This is achieved by economies of scale. It is almost exclusively for this competition otherwise place more than one company to dominate in this region cause a priceWar.
differentiation strategy as the unique value proposition, and in areas such as product, service, image, sales, marketing, etc. or a combination thereof.
Strategy Focus looks for the best in a segment aimed at focusing with two versions of cost and differentiation focus
6. Analysis of the life cycle of the product
The Product Life Cycle Analysis helps to identify the product stage. All the products pass through four stages, namely theIntroduction, growth, maturity and decline. Each product has a life cycle. You must know the life cycles of products carefully in order to plan their life stages during the period horizon.
This analysis is a fluid document that must be updated annually for planning purpose. If you believe that the product is not currently being exploited by other potential maximized, you should try pro-active, rejuvenating the life cycle of these products and their maturitydecline phases.
7. Size and growth directions
How can the size and growth of the approaches likely to adopt growth while driving sales of the product. This is a matrix that maps your product growth strategies into new markets and existing products vs. Potentially, the four segments of market penetration, market development, diversification and development of the product. The market penetration, in essence, the exploitation of new markets with existing products.Market development is gaining momentum in existing markets and products. Diversification means existing markets with new products leverage. And, of course, the development of product expansion into new markets with new products.
Eighth BCG Matrix
Boston Consulting Group has developed the BCG matrix to set priorities in the portfolio of a product should be given help. It has two main dimensions - market share and market growthRate, with 4 categories fall in this quadrant.
Industry-leading Stars = - Products with high growth and high market share. Generate cash flow and require a high input high liquidity. Net cash flow is usually flat.
Cash Cows = creation of the Business (stars of past years) - Products with a lower growth rate and high market share. It produces a high cash flow with low entry requirements in cash.
Dog = drag the company - products with a growth rate lowersmall market share. Should be avoided. the largest possible number outstanding.
Question Marks = ambiguity of the business - the products with high growth and low market share. Strong demand and low cash yields. If you take the question mark, you must ensure increased market share and provide liquidity.
The identification of your products in each category will tell you the proper growth and funding strategy. For example, the injection of money fromQuestion Marks provided & / or Stars Fund in order to drive the next level - Cash Cow positions.
real application of the feasibility analysis above is a cumulative interaction of the different models, even if they are developed separately by separate strategies. I am in favor of a broad approach to the use or conjugation therein lies the great interdependence of the individual to another.
Recommend : Proposition 8
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