spe3002 entrerpeneurship - venture environment assesemant w1

7/30/2019 SPE3002 Entrerpeneurship - Venture Environment Assesemant w1

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Mohd. Khata Bin Jabor email: [email protected] slide 1

WEEK 10

11 - 17 SEPTEMBER 2006


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AGENDA

Venture Environment

Assesement


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LEARNING OUTLINE

Business Venture EnvironmentComponent?Evaluating Business Segment

Macro Environmental InfluenceMicro Environment InfluenceInternal Influence


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InternalExternal

Macro

Micro

BUSINESSVENTURES

ENVIRONMENTCOMPONENTS


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InternalExternal

Macro

Micro

Political &

legislation Socio-Cultural

TechnologyEconomy

Financial

Institution

Customers

Suppliers Competitors

Government Agency

NGO

Porters 5 Forces

Model


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THE FIVE FORCES MODEL

EVALUATING BUSINESS SEGMENTS Organizations use Porters Five Forces Model to determine the relative attractiveness of

an industry


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Michael Porter 5 Forces Model

Further readings

http://www.themanager.org/Models/p5f.htm

http://en.wikipedia.org/wiki/Porter_5_forces_analysis
http://www.themanager.org/Models/p5f.htmhttp://en.wikipedia.org/wiki/Porter_5_forces_analysishttp://en.wikipedia.org/wiki/Porter_5_forces_analysishttp://en.wikipedia.org/wiki/Porter_5_forces_analysishttp://en.wikipedia.org/wiki/Porter_5_forces_analysishttp://www.themanager.org/Models/p5f.htm


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Internal

Organizations Structure

External

Resources

Culture

Macro

Micro

Political &

legislation Socio-Cultural

TechnologyEconomy

Financial

Institution

Customers

Suppliers

Competitors

Government Agency

NGO


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MACRO ENVIRONMENTALINFLUENCE

SOCIO-CULTURAL ECONOMY

POLITICAL ANDLEGISLATION TECHNOLOGY
http://rds.yahoo.com/_ylt=A9G_Rq4uVH5ETXIBEvCJzbkF;_ylu=X3oDMTBjMHZkMjZyBHBvcwMxBHNlYwNzcg--/SIG=1dkk35j3s/EXP=1149216174/**http%3a//images.search.yahoo.com/search/images/view%3fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dtechnology%2526ei%253DUTF-8%2526fr%253Dslv1-msgr%2526x%253Dwrt%26w=232%26h=289%26imgurl=ese.sbmc.org%252Fimages%252Ftechnology.jpg%26rurl=http%253A%252F%252Fese.sbmc.org%252Ftechnology.htm%26size=21.5kB%26name=technology.jpg%26p=technology%26type=jpeg%26no=1%26tt=7,205,991%26ei=UTF-8http://rds.yahoo.com/_ylt=A9G_Rq70U35ETXIBeNKJzbkF;_ylu=X3oDMTBjMHZkMjZyBHBvcwMxBHNlYwNzcg--/SIG=1du154ai8/EXP=1149216116/**http%3a//images.search.yahoo.com/search/images/view%3fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dlaw%2526ei%253DUTF-8%2526fr%253Dslv1-msgr%2526x%253Dwrt%26w=147%26h=189%26imgurl=www.coltenlaw.com%252Fimages%252Ffamily_law.jpg%26rurl=http%253A%252F%252Fwww.coltenlaw.com%252Fpractices%252Ffamily_law.asp%26size=12.5kB%26name=family_law.jpg%26p=law%26type=jpeg%26no=1%26tt=3,016,638%26ei=UTF-8http://rds.yahoo.com/_ylt=A9G_Rq70U35ETXIBetKJzbkF;_ylu=X3oDMTBjcXBoZjEwBHBvcwMzBHNlYwNzcg--/SIG=1fgsjplro/EXP=1149216116/**http%3a//images.search.yahoo.com/search/images/view%3fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dlaw%2526ei%253DUTF-8%2526fr%253Dslv1-msgr%2526x%253Dwrt%26w=200%26h=300%26imgurl=www.lynchlawofc.com%252Fimages%252Flaw-scales_of_justice2-cmstk_legalities00011855.jpg%26rurl=http%253A%252F%252Fwww.lynchlawofc.com%252F%26size=94.8kB%26name=law-scales_of_justice2-cmstk_legalities00011855.jpg%26p=law%26type=jpeg%26no=3%26tt=3,016,638%26ei=UTF-8http://rds.yahoo.com/_ylt=A9G_Rq9jU35EKvwAjVaJzbkF;_ylu=X3oDMTBjMzRvMDBnBHBvcwM5BHNlYwNzcg--/SIG=1f17o7h99/EXP=1149215971/**http%3a//images.search.yahoo.com/search/images/view%3fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dculture%2526ei%253DUTF-8%2526fr%253Dslv1-msgr%2526x%253Dwrt%26w=400%26h=300%26imgurl=www.justsalsa.com%252Farton2%252Froom2%252Ffromthezone%252Fimages%252Fculture.jpg%26rurl=http%253A%252F%252Fwww.professorsearch.com%252Fsearch%252Fculture%26size=24.3kB%26name=culture.jpg%26p=culture%26type=jpeg%26no=9%26tt=4,191,253%26ei=UTF-8http://rds.yahoo.com/_ylt=A9G_Rq9jU35EKvwAhlaJzbkF;_ylu=X3oDMTBjdmNoOTVjBHBvcwMyBHNlYwNzcg--/SIG=1dusvjvnk/EXP=1149215971/**http%3a//images.search.yahoo.com/search/images/view%3fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dculture%2526ei%253DUTF-8%2526fr%253Dslv1-msgr%2526x%253Dwrt%26w=252%26h=128%26imgurl=plaza.ufl.edu%252Fnsdighe%252Fimages%252FCulture.jpg%26rurl=http%253A%252F%252Fplaza.ufl.edu%252Fnsdighe%252FCulture.htm%26size=6.8kB%26name=Culture.jpg%26p=culture%26type=jpeg%26no=2%26tt=4,191,253%26ei=UTF-8


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MACRO ENVIRONMENTALINFLUENCE
http://www.animationfactory.com/animations/people_a_l/legal/109594/http://rds.yahoo.com/_ylt=A9G_Rq70U35ETXIBetKJzbkF;_ylu=X3oDMTBjcXBoZjEwBHBvcwMzBHNlYwNzcg--/SIG=1fgsjplro/EXP=1149216116/**http%3a//images.search.yahoo.com/search/images/view%3fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dlaw%2526ei%253DUTF-8%2526fr%253Dslv1-msgr%2526x%253Dwrt%26w=200%26h=300%26imgurl=www.lynchlawofc.com%252Fimages%252Flaw-scales_of_justice2-cmstk_legalities00011855.jpg%26rurl=http%253A%252F%252Fwww.lynchlawofc.com%252F%26size=94.8kB%26name=law-scales_of_justice2-cmstk_legalities00011855.jpg%26p=law%26type=jpeg%26no=3%26tt=3,016,638%26ei=UTF-8


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Trade Barriers A is a general term

that describes any governmentpolicy or regulation that restrictsinternational trade, the barriers cantake many forms, including:

Import duties - Import licenses

Export licenses

Quotas

Tariffs

Subsidies

Non-tariff barriers to trade
http://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Import_dutyhttp://en.wikipedia.org/w/index.php?title=Import_license&action=edithttp://en.wikipedia.org/w/index.php?title=Export_license&action=edithttp://en.wikipedia.org/wiki/Quotashttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Subsidieshttp://en.wikipedia.org/wiki/Non-tariff_barriers_to_tradehttp://en.wikipedia.org/wiki/Non-tariff_barriers_to_tradehttp://en.wikipedia.org/wiki/Non-tariff_barriers_to_tradehttp://en.wikipedia.org/wiki/Non-tariff_barriers_to_tradehttp://en.wikipedia.org/wiki/Subsidieshttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Quotashttp://en.wikipedia.org/w/index.php?title=Export_license&action=edithttp://en.wikipedia.org/w/index.php?title=Import_license&action=edithttp://en.wikipedia.org/wiki/Import_dutyhttp://en.wikipedia.org/wiki/International_trade


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Trade BarriersImport DutiesImport duties

a schedule of duties imposed by a country onimported goods.

It is paid at a border or port of entry to the

relevant government to allow a good to passinto that government's territory. In medievaland ancient times, such tariffs were even

collected by local governments. Now this isvery rare. Typically they are collected bynational governments or, in a customs union,by the regional authority.
http://en.wikipedia.org/wiki/Import_dutyhttp://en.wikipedia.org/wiki/Taxhttp://en.wikipedia.org/wiki/Countryhttp://en.wikipedia.org/wiki/Customs_unionhttp://en.wikipedia.org/wiki/Customs_unionhttp://en.wikipedia.org/wiki/Countryhttp://en.wikipedia.org/wiki/Taxhttp://en.wikipedia.org/wiki/Import_duty


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Trade Barriers - Quota

A quota is a time-measured goal

forproduction or achievement. An assembly line worker might

have a quota for the number of

products made; a salesperson might have a

quota to meet for weekly sales;

a police officermight have a

quota fortickets issued orarrests made.
http://en.wikipedia.org/wiki/Productionhttp://en.wikipedia.org/wiki/Productionhttp://en.wikipedia.org/wiki/Assembly_linehttp://en.wikipedia.org/wiki/Police_officerhttp://en.wikipedia.org/wiki/Ticketshttp://en.wikipedia.org/wiki/Ticketshttp://en.wikipedia.org/wiki/Arrestshttp://en.wikipedia.org/wiki/Ticketshttp://en.wikipedia.org/wiki/Arrestshttp://en.wikipedia.org/wiki/Arrestshttp://en.wikipedia.org/wiki/Ticketshttp://en.wikipedia.org/wiki/Police_officerhttp://en.wikipedia.org/wiki/Assembly_linehttp://en.wikipedia.org/wiki/Production


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Trade Barriers - Quota In trade, a quota is a form of

protectionism used to restrictthe import of something to aspecific quantity (Sawyer &Sprinkle, International

Economics, 2nd Edition, 2003, p157).

The number of cars imported

from Japan may have a quota of50,000 vehicles per annum toprotect auto manufacturers inthe United States.
http://en.wikipedia.org/wiki/Protectionismhttp://en.wikipedia.org/wiki/Protectionismhttp://en.wikipedia.org/wiki/Importhttp://en.wikipedia.org/wiki/Protectionismhttp://en.wikipedia.org/wiki/Importhttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Importhttp://en.wikipedia.org/wiki/Protectionism


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Trade Barriers -Tariff

A tariff is a tax on imported goods.When a ship arrives in port a customsofficer inspects the contents andcharges a tax according to the tariff

formula. Since the goods cannot be landed until

the tax is paid it is the easiest tax to

collect, and the cost of collection issmall. Smugglers of course seek toevade the tariff.

List of tariffs http://en.wikipedia.org/wiki/List_of_tariffs
http://en.wikipedia.org/wiki/List_of_tariffshttp://en.wikipedia.org/wiki/List_of_tariffs


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Trade Barriers -Subsidy

A is generally a monetary

grant given by government to

lower the price faced by

producers or consumers of a good,

generally because it is considered

to be in the public interest.

Subsidies are also referred to as

corporate welfare by those whooppose their use.
http://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Good_%28economics%29http://en.wikipedia.org/wiki/Public_interesthttp://en.wikipedia.org/wiki/Public_interesthttp://en.wikipedia.org/wiki/Good_%28economics%29http://en.wikipedia.org/wiki/Government


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Trade Barriers -Subsidy

The term subsidymay also referto assistance granted by others,

such as individuals or non-

government institutions,

although this is more usually

described as charity.
http://en.wikipedia.org/wiki/Charityhttp://en.wikipedia.org/wiki/Charity


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Trade Barriers -Subsidy A subsidy normally exemplifies the opposite of a

tax, but can also be given using a reduction of thetax burden. These kinds of subsidies are generallycalled tax expendituresor tax breaks.

Subsidies protect the consumer from paying thefull price of the good consumed, however theyalso prevent the consumer from receiving the fullvalue of the thing not consumed in that sense, asubsidized society is a consumption society

because it unfairly encourages consumption morethan conservation.
http://en.wikipedia.org/wiki/Taxhttp://en.wikipedia.org/wiki/Taxhttp://en.wikipedia.org/wiki/Tax


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MACRO ENVIRONMENTAL

INFLUENCE
http://www.animationfactory.com/animations/people_a_l/legal/109594/http://rds.yahoo.com/_ylt=A9G_Rq70U35ETXIBetKJzbkF;_ylu=X3oDMTBjcXBoZjEwBHBvcwMzBHNlYwNzcg--/SIG=1fgsjplro/EXP=1149216116/**http%3a//images.search.yahoo.com/search/images/view%3fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dlaw%2526ei%253DUTF-8%2526fr%253Dslv1-msgr%2526x%253Dwrt%26w=200%26h=300%26imgurl=www.lynchlawofc.com%252Fimages%252Flaw-scales_of_justice2-cmstk_legalities00011855.jpg%26rurl=http%253A%252F%252Fwww.lynchlawofc.com%252F%26size=94.8kB%26name=law-scales_of_justice2-cmstk_legalities00011855.jpg%26p=law%26type=jpeg%26no=3%26tt=3,016,638%26ei=UTF-8


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ASEAN FREE TRADE AGREEMENT


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ASEAN FREE TRADE

AGREEMENT (AFTA)The ASEAN Free Trade Area was established in January 1992 toeliminate tariff barriers among the Southeast Asian countries with aview to integrating the ASEAN economies into a single productionbase and creating a regional market of 500 million people.

The Agreement on the Common Effective Preferential Tariff (CEPT)Scheme for the ASEAN Free Trade Area requires that tariff rateslevied on a wide range of products traded within the region bereduced to no more than five percent.

Quantitative Restrictions and other non-tariff barriers are to be

eliminated.

Link : http://www.aseansec.org/12025.htm
http://www.aseansec.org/12025.htmhttp://www.aseansec.org/12025.htm


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ECONOMIC

What is the current state of theeconomy?

What is the condition of the future

outlook?Are the interest rates favorable?

What is the currency value and the

exchange rate?


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ECONOMIC

How many firms are there in theindustry?

Do the firms serve only the domestic

market? Is there any opportunity to go

international?

What is the competitive nature of thebusiness?


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SOCIO - CULTURAL

Demography -the study of human

population and its structure and change.

Distributions of values within a

demographic variable, and acrosshouseholds, are both of interest, as well

as trends over time.

Demographics are primarily used ineconomic and marketing research.
http://en.wikipedia.org/wiki/Populationhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Marketing_researchhttp://en.wikipedia.org/wiki/Marketing_researchhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Population


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SOCIO - CULTURAL

Age Sex / Gender Race/ Ethnicity Location of residence Socioeconomic status

(SES) Religion Nationality Occupation

Demographic variables

Marketers and other social scientists often group populationsinto categories based on demographic variables. The mostfrequently used demographic variables are:

Education Family size Marital status Ownership's (home,

car, pet, etc.)

Language Mobility Life cycles (fertility,

mortility, migration)
http://en.wikipedia.org/wiki/Agehttp://en.wikipedia.org/wiki/Sexhttp://en.wikipedia.org/wiki/Genderhttp://en.wikipedia.org/wiki/Racehttp://en.wikipedia.org/wiki/Ethnicityhttp://en.wikipedia.org/wiki/Socioeconomicshttp://en.wikipedia.org/wiki/Socioeconomicshttp://en.wikipedia.org/wiki/Religionhttp://en.wikipedia.org/wiki/Nationalityhttp://en.wikipedia.org/wiki/Occupationhttp://en.wikipedia.org/wiki/Educationhttp://en.wikipedia.org/wiki/Familyhttp://en.wikipedia.org/wiki/Marriagehttp://en.wikipedia.org/wiki/Propertyhttp://en.wikipedia.org/wiki/Propertyhttp://en.wikipedia.org/wiki/Languagehttp://en.wikipedia.org/wiki/Mobilityhttp://en.wikipedia.org/wiki/Life_history_theoryhttp://en.wikipedia.org/wiki/Life_history_theoryhttp://en.wikipedia.org/wiki/Life_history_theoryhttp://en.wikipedia.org/wiki/Life_history_theoryhttp://en.wikipedia.org/wiki/Mobilityhttp://en.wikipedia.org/wiki/Languagehttp://en.wikipedia.org/wiki/Propertyhttp://en.wikipedia.org/wiki/Propertyhttp://en.wikipedia.org/wiki/Marriagehttp://en.wikipedia.org/wiki/Familyhttp://en.wikipedia.org/wiki/Educationhttp://en.wikipedia.org/wiki/Occupationhttp://en.wikipedia.org/wiki/Nationalityhttp://en.wikipedia.org/wiki/Religionhttp://en.wikipedia.org/wiki/Socioeconomicshttp://en.wikipedia.org/wiki/Socioeconomicshttp://en.wikipedia.org/wiki/Ethnicityhttp://en.wikipedia.org/wiki/Racehttp://en.wikipedia.org/wiki/Genderhttp://en.wikipedia.org/wiki/Sexhttp://en.wikipedia.org/wiki/Age


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SOCIO - CULTURAL

The variables that need attention are

household formation,

work modes and labor force participation rates,

education levels,

patterns of consumption and patterns of leisure.

Social Trends relate to the modes and manner in

which people live their lives.

Lifestylereflects the peoples tastes and preferences.


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TECHNOLOGICAL PURE INVENTIONPROCESS

INNOVATION

Creation of something new that

is different from existing

technology or products

Small changes in design, product

formulation and manufacturing,

materials and distribution.


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MICRO ENVIRONMENT

Consumers Competitors

Suppliers

Financial Institutions

Government Agencies


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Consumers

The bargaining power of customers buyer concentration to firm

concentration ratio

bargaining leverage buyer volume

buyer switching costs relative to firm

switching costs
http://en.wikipedia.org/wiki/Switching_costshttp://en.wikipedia.org/wiki/Switching_costs


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Consumers

The bargaining power of customers buyer information availability

availability of existing substitute

products buyer price sensitivity

price of total purchase


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Competitors

A resource-based competitive analysisgrid can be used as a tool to analyzeand rank the competitors in theindustry.

Entrepreneurs can also identify thestrengths and weaknesses ofcompetitors using this tool and help

them to position new ventures.


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CompetitorsThe resources-based competitive analysis.

On a scale of 1 through 7 evaluate thecompetitors resource base.

1= the firm has absolutely no advantage in the

resource area; 4 = the firm possesses about the same

resource capabilities as the other industryparticipants;

7 = the firm possesses an absolute advantagein the resource category.


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Suppliers

The bargaining power of suppliers supplier switching costs relative to

firm switching costs

degree of differentiation of inputs

presence of substitute inputs

supplier concentration to firm

concentration ratio


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Suppliers

The bargaining power of suppliers threat of forward integration by

suppliers relative to the threat ofbackward integration by firms

cost of inputs relative to selling priceof the product

importance of volume to supplier


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Financial Institutions and NGOs

Functions Lists

Examples


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INTERNAL ENVIRONMENT

Resources Structure

Culture
http://images.google.com/imgres?imgurl=http://www.innovation-direct.com/indexpage/teampicture.jpg&imgrefurl=http://www.innovation-direct.com/&h=291&w=372&sz=21&tbnid=mOLA-v0AjAoqEM:&tbnh=92&tbnw=118&hl=en&start=17&prev=/images%3Fq%3DINNOVATION%2BIMAGES%26svnum%3D10%26hl%3Den%26lr%3D%26rls%3DRNWE,RNWE:2006-22,RNWE:en


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Resources

Human resource Financial resource

Special skills, technology


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Structure

Business set up Type of business


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Culture

Organizational culture Surrounding culture


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Opportunities - business concept that, if turnedinto a tangible product @ service offered by abusiness enterprise, will result in financial profit

Opportunity

Economicchange

Ready Availability

of established,non-proprietary

technology

Development ofnew Market &DistributionChannels

Social change


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Change in perception

Demographics

Industry & marketstructures

The process need

The incongruous

The unexpected

New knowledge

Sources ofOpportunity
http://images.google.com/imgres?imgurl=http://www.scincro.com/images/eCommerce/fondo.jpg&imgrefurl=http://www.scincro.com/ecommerce.asp&h=239&w=330&sz=22&tbnid=VTV1Hy4m5hHrHM:&tbnh=82&tbnw=114&hl=en&start=1&prev=/images%3Fq%3De-commerce%26svnum%3D10%26hl%3Den%26lr%3D%26rls%3DRNWE,RNWE:2006-22,RNWE:en%26sa%3DN


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http://images.google.com/imgres?imgurl=http://www.scincro.com/images/eCommerce/fondo.jpg&imgrefurl=http://www.scincro.com/ecommerce.asp&h=239&w=330&sz=22&tbnid=VTV1Hy4m5hHrHM:&tbnh=82&tbnw=114&hl=en&start=1&prev=/images%3Fq%3De-commerce%26svnum%3D10%26hl%3Den%26lr%3D%26rls%3DRNWE,RNWE:2006-22,RNWE:en%26sa%3DN


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BUSINESS OPPORTUNITY EVALUATION


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Magnitude of Opportunity

Depends on The value that the entrepreneurs want

to create

The size Economics factors

Business orientation


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Magnitude of Opportunity

Comes in 3 situations Creation -Original opportunities

lead to other opportunities

Skill development

Implementation


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Sources of Opportunity


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Opportunities and New Firms


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Opportunities and New Firms

spe3002 entrerpeneurship - venture environment assesemant w1

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