GENERATION OF PROJECT IDEAS

K.CHITRA 11TM03

OUTLINE
Generation of Ideas Stimulating the flow of ideas Monitoring the Environment Key sectors of the environment Corporate Appraisal Aspects of corporate appraisal Tools for Identifying Investment Opportunities Porter model Scouting for Project Ideas

 For a successful venture, we need to have promising ideas. Many organisations or firms pursue ideas that will help them to achieve their objectives. There is a relationship between the information gathered about the market and the ideas generated by the work groups in the organisation. The ideas with the greatest prospective are then adopted. This is known as screening of ideas.

Generation of Ideas
Generation of ideas mainly comprises of two elements. The first one being the source of the ideas which can either be internal or external in nature and the second one being the methods used to identify these sources and gather information about them. The methods can be differentiated by the time horizon in which they are implemented

Stimulating the flow of ideas

The following features are helpful for the stimulation of ideas: SWOT analysis. Clear articulation of objectives. Developing a conducive climate. Brainstorming.

 Strengths, Weaknesses, Opportunities, and Threats (SWOT) is a well-known analysis technique adopted by business owners to improve the current position of their business. The internal aspects of a company are the strengths and weaknesses such as the quality of the product or the managerial skills. The external factors are the opportunities and threats like the development of a completely new market or the arrival of new competitors. The SWOT analysis helps to identify the core activities and how to perform them well.

 Clear articulation of objectives A clear articulation of objectives will help in grouping the efforts of employees, which would in turn make them think more imaginatively. Developing a conducive climate It is essential to develop an environment in an organisation, where the employees of a company can bring out their creativity. The ideas of the employees must be acknowledged properly and promptly.

MONITORING THE ENVIRONMENT

A promising investment idea allows a firm to exploit opportunities in the environment by drawing on its competitive strengths External forces affect business decisions. These forces can be economic, social, political, and technological factors. A firm needs to constantly monitor its environment to remain competitive. A business environment is dynamic in nature.

MONITORING THE ENVIRONMENT

Governmental Sector These factors are neither in the control of the promoter nor the project manager. International projects get affected by both local and international regulations. Projects also get affected by changes in import, export and exchange restrictions. Sudden revolutions can completely stop a project.

MONITORING THE ENVIRONMENT

Technological Sector Technology plays an important role in a competitive business environment. This sector includes the level of technology available in the country, the pace of research and progress made in introducing modern technology in production

MONITORING THE ENVIRONMENT

Socio-Demographic Sector This describes the characteristics of the society in which the organisation exists. Literacy rate, customs, values, beliefs, lifestyle, and mobility of population are part of the socio-demographic sector

MONITORING THE ENVIRONMENT

Economic sector This sector consists of factors that influence the business in a country. It includes. Inflation rate, Employment, Interest rates, Gross national product.

CORPORATE APPRAISAL
Corporate appraisal refers to the examination of an organisation from different angles. It is essential to identify the strengths, weaknesses, and the readiness of the internal culture of the firm to interact with the external environment.

Aspects of corporate appraisal

Marketing and distribution We must analyse the marketing and distribution strategy of the firm. This includes the image of the firm in market, the product line, market share, distribution network, customer loyalty, and the costs involved. For example, Coca Colas strong market position is in the soft drinks sector.

 Product and operations This includes the product that the company wants to manufacture and capacity of the plant and machinery, availability of raw materials, sub-assemblies and power Research and development It is necessary to identify the research abilities of the firm, the type of laboratories, and testing facilities available, along with the coordination between research and operations. It is also essential for a firm to keep a record of the new product developments.

 Corporate resources and personnel This includes the corporate image, governmental, regulatory agencies influence, and dynamism of top management, competence of employees along with the state of industrial relations. Finance and accounting This includes the financial leverage and borrowing capacity of the firm, cost of capital, tax situation, and relationship with the shareholders, creditors, accounting and control system, cash flows and liquidity.

Tools for Identifying Investment Opportunities

There are various tools that can be used to identify promising investment opportunities Porter model.

 It is important that a corporate plan should meet the opportunities and threats in the firms external environment and a competitive approach must be based on an understanding of industry structures and the way they change. The Porter model is based on these insights of a corporate strategy. Porter has identified the five competitive forces that can make every industry gain a good position in the market. The forces determine the intensity of competition and therefore the profitability of an industry. This model explains the driving forces in a business. Management decides the way to influence or achieve particular characteristics of their industry based on the information derived from the five forces analysis.

PROFIT POTENTIAL OF INDUSTIRES PORTER MODEL

Potential Entrants Threat of New Entrants Bargaining Power of Suppliers

Suppliers

THE INDUSTRY Rivalry Among Existing Firms

Threat of Substitute Products Substitutes

Bargaining Power of Buyers

Buyers

SCOUTING FOR PROJECT IDEAS

It is essential to have good project ideas since they are the key to success for everyone. However, it is difficult to have such ideas. Hence, various sources should be analysed to get good ideas. A few factors that need to be considered while scouting for project ideas are:

 Analysing the performance of existing companies A company should be study the terms of its profitability and its capacity to utilise available resources. This indicates a promising investment opportunity. Examining the inputs and outputs of industries By analysing the various input and output strategies adopted by industries, we can get project ideas. Reviewing import and exports Analysing the import and export strategy for a period of three to five years helps in understanding the trends of import or export of various products. Evaluating the suggestions of financial institutions and developmental agencies The state financial corporations and developmental agencies conduct studies, prepare feasible reports, and offer suggestions to industrialists. With the help of these suggestions, they can identify promising projects.

 Reference Dr. Chandra. P (2008). Projects, Planning, Analysis, Selection, Financing, Implementation and Review, Seventh edition, McGraw-Hill Education