Idea Assessment, and Market & Industry

Feasibility
Week 3 Seminar

Essentials of Business Development

Seminar Learning Objectives

By the end of this seminar, you should be able to

❑ Identify steps in the process of business planning
❑ Apply idea assessment in the process of business planning
❑ Analyse the industry and market in the process of business planning using tools
such as PESTLE analysis and Porter’s Five Forces analysis
❑ Use complex thinking in analysis
 ACE Task: MCQ (5 min.)
1. The profile of an entrepreneur includes ________.
A. a desire for responsibility and moderate risk
B. confidence in the ability to succeed and determination
C. a high level of energy, a desire for immediate feedback and a future orientation
D. All the above

2. Potential drawbacks of entrepreneurship may include ________.

A. uncertainty of income, risk, long hours, and high stress

B. uncertainty of income, risk, easy hours, and frequent vacations
C. uncertainty of income, risk, long hours, and the immediate accumulation of wealth
D. certainty of income, risk, long hours, and high stress

3. Timely, attractive, durable, and anchored in a product or service are characteristics of ______
A. an idea
B. an innovation
C. an opportunity
D. a business model
Lecture (2) Recap: Processes of Business Planning
The outlined steps below play an important but separate roles in
the start-up and growth of an entrepreneurial venture.

Applying Theory to Practice

Step one: Develop business ideas
Step two: Conducting an idea assessment –assessment of the
opportunity
Step three: Conducting a feasibility analysis
Step Four: Developing a business model – decisions on how the business
will generate revenue
Step Five: Crafting a business plan – next week lecture
Step Six: Creating a strategic plan
Step Seven: Launching the business

Processes of Business Planning- Adapted from Scarborough and Cornwall (2019, p.171)
 Conducting an Idea Assessment

Ideas Assessment
Efficiently evaluate the numerous ideas that come
out of the creative process before committing the
time and effort to craft a business plan, design a
business model, or even conduct a feasibility
analysis.

Involves assessing
▪ Customers
▪ Product Offering
▪ Value proposition
▪ People
Tools in Industry and Market Feasibility –PESTLE Analysis
▪ Sociocultural changes
Purpose: ▪ Economic
e.g. 1970s-1980s:Women began entering
▪ Serves as both a management e.g. Great recession led people
the workforce at higher rates (Daycare
framework and a tool for to look for less costly options to
industry, restaurant industry)
gain knowledge ( e-learning)
diagnosis.
▪ Technology - Internet age
▪ Gain insights into external e.g. New products and new players as ▪ Political/Legal
factors that may affect an in music industry: Pandora, Spotify, e.g. Patient
organisation's strategy and iTunes. protection
influence key business Acts led to
decisions. ▪ Demographics new ventures
e.g. Generations Z, Y and to help heath
Millennials possess different providers
Structure: characteristics improve and
▪ include six element where track
▪ Global and Environment Forces performance
trends or changes are
e.g. access to global market
assessed under each element, (Automobile industry) and global
providing an opportunity or concern for
threat to the industry Climate Change
Tools in Industry and Market Feasibility- Porter’s Five
Forces Analysis

Origins
• Outcome of the research by
Harvard academic Michael Porter
(1979).
Purpose
• To analyse the competitive forces
operating within an industry
• To determine industry profitability
( or industry attractiveness)
• To describe the “structure” of an
industry
Structure
• Includes 5 “forces”; where the
threat of each force based on
Adapted from Michael E. Porter, “How Competitive Forces Shape Strategy,” Harvard
some analysis is assessed as: Business Review, March/April 1979, pp. 137–145.
High, Medium or Low.
Existing Competitive Rivalry

▪ Strongest of the five forces

▪ Industry is more attractive to new entrants when ( i.e. low
threat of rivalry) :
• Number of competitors is large, or, at the other
extreme, quite small
• Competitors are not similar in size or capacity
• Industry is growing fast
• Opportunity to sell a differentiated product or
service exists
Threat of New entrants

▪ The larger the pool of potential new entrants, the

less attractive an industry is.
▪ Industry is more attractive to new entrants when
(i.e. high threat of new entrants) :
• Advantages of economies of scale are absent
• Capital requirements to enter are low
• Cost advantages are not related to company
size
• Buyers are not loyal to existing brands
• Government does not restrict the entrance of
new companies
Threat of Substitutes

▪ Substitute products or services can turn an industry

on its head.
▪ Industry is more attractive to new entrants when
( i.e. low threat of substitute) :
• Quality substitutes are not readily available
• Prices of substitute products are not
significantly lower than those of the
industry’s products
• Buyers’ switching costs are high
Bargaining Power of Suppliers

▪ The greater the leverage of suppliers, the less

attractive the industry.
▪ Industry is more attractive to new entrants (i.e. low
threat of supplier power) :
• Many suppliers sell a commodity product
• Substitutes are available
• Switching costs are low
• Items acquired account for a small portion of
the cost of the entrants’ finished products
Bargaining Power of Buyers
▪ Buyers’ influence is high when number of customers is small and cost
of switching to a competitor’s product is low.
▪ Industry is more attractive to new entrants (i.e. Low buyer power)
when:
• Customers’ switching costs are high
• Number of customers is large
• Customers want differentiated products
• Customers find it difficult to collect information for comparing
providers or producers
• B2B scenario:
• Items sold by the supplier account for a small portion of business
buyer’s finished products i.e. not worth negotiating price
• Business buyer’s profit is high
Check Your Learning – Porter’s Five Forces Analysis
1. The lower the switching cost for end users,

A. The higher the buyer negotiation power

B. The higher the supplier negotiation power
C. The lower the buyer negotiation power
D. The lower the supplier negotiation power
2. The lower the switching cost for end users,

A. The higher the intensity of rivalry

B. The Lower the entry barriers
C. The higher the intensity of rivalry and lower the entry barriers
D. The lower the intensity of rivalry and higher the entry barriers
Check Your Learning – Porter’s Five Forces Analysis
The lower the switching cost for end users,

A. The higher the buyer negotiation power

B. The higher the supplier negotiation power
C. The lower the buyer negotiation power
D. The lower the supplier negotiation power

The lower the switching cost for end users,

A. The higher the intensity of rivalry

B. The Lower the entry barriers
C. The higher the intensity of rivalry and lower the entry barriers
D. The lower the intensity of rivalry and higher the entry barriers
Check Your Learning – Porter’s Five Forces Analysis
3. What is the impact of high product differentiation?
A. Low intensity of competition
B. High threat of substitutes
C. High threat of buyer negotiation power
D. Low threat of suppliers

4. What is the impact if the supplier’s product is an important part of the

buyer’s business ?
A. The higher the negotiation power of the buyer
B. The lower the negotiation power of the producer
C. The higher the negotiation power of suppliers
D. The lower the negotiation power of the supplier
Check Your Learning – Porter’s Five Forces Analysis A challenge
What if there is
high product
3. What is the impact of high product differentiation? differentiation
A. Low intensity of competition where buyers are
B. High threat of substitutes extremely brand
loyal ?
C. High threat of buyer negotiation power
D. Low threat of suppliers

4. What is the impact if the supplier’s product is an important part of the buyer’s
business ?
A. The higher the negotiation power of the buyer
B. The lower the negotiation power of the producer
C. The higher the negotiation power of suppliers
D. The lower the negotiation power of the supplier
This Photo by Unknown Author is licensed under CC BY

Assessment Support
Second Element of Assessment – Individual Presentation with a
Voiceover
• You are now ready to work
on slides (3) & (4) of your
presentation

• Please open a PowerPoint

presentation slides to work
on the next 2 activities

This Photo by Unknown Author is licensed under CC BY-NC

Activity (1): Conduct an Idea Assessment on behalf of
Green Spokes (In pairs- 15 min)
• Customers – What is the demographics of Green Spokes existing customer groups? What is the size of each
customer group ? Identify the preferences of the top three customer groups in terms of sales and promotion
channels?
• Open Sales & Marketing >> Go to Market Research
• View Customer Y3 Q4 report
• View Demographic report

• Product Offering – What product design does Green spokes have to offer? In which sub-segment is the
company product offering positioned ? What is Green Spokes market share in this sub-segment according to
the latest research report?

• Open Operation >> Go to Production >> Under Product find Design

• Open sales and Marketing >> Go to Branding >> find sub-segment
• Open Sales & Marketing >> Go to Market Research >> View Competition Y3 Q4 report >> find Market Share
Activity (1): Conduct an Idea Assessment on behalf of
Green Spokes (In pairs 15 min) (cont’d)
• Value Proposition – What is Green Spokes USP compared to competition? To what extent our USP meet
customers’ approval ?

• Open Sales & Marketing>>Go to Branding >> Find Attributes

• Open Sales & Marketing >> Go to Market Research >> View Focus Group Report and compare attributes
to expectations

• People – How many departments comprise the structure of Green Spokes? How many employees do we
have in each department? What is the total assigned workforce for each department? How satisfied are
Green Spokes’ employees?

• Open each individual department

• Find total number of employees in each department
• Find total Workforce effective hours assigned to each department
• Find percentage of satisfaction under Morale in each department
Activity (2): Apply PESTLE Analysis to the Context of UK Bicycle
Industry (20 min.)
External factors Factors affecting Importance to
Steps to conduct PESTLE analysis to consider my industry organisation

• Find credible sources of data

Political
❑ Collect data around element of PESTLE in the
UK Economic

❑ Identify those factors that are relevant to

Green Spokes Industry Social

❑ Identify those factors that are most important

Technology
to Green spokes
Legal
❑ Use the template on the right-hand side to
filter which factors are important and relevant Environmental
to the bicycle industry
❑ Analyse findings (i.e. consider prompts on the The template is to help you structure
next slide) your thoughts . Do not include in your
presentation slides
Activity (2): Apply PESTLE Analysis to the Context of UK Bicycle
Industry (20 min.)

Through your PESTLE Analysis, you might be able to answer the following:
1.How large is the bicycle industry?
2.How fast is it growing?
3.Is the bicycle industry as a whole profitable?
4.Is the bicycle industry characterized by high profit margins or razor-thin margins?
5.How essential are its products or services to customers?
6.What trends are shaping the bicycle industry’s future?
7.What threats does the bicycle industry face?
8.What opportunities does the bicycle industry face?
9.Is the bicycle industry young, mature, or somewhere in between?
PESTLE - Presentation Tips!
❖ Avoid overly crowding your presentation slides with text

❖ Use bullet points under each element of PESTLE ( at least 4 elements)

❖ Cite sources to support your analysis i.e. evidence

❖ Do not forget to select only elements that are important and establish links to the bicycle
industry, indicating whether trends discussed under each element offer opportunities, threats
or both!

❖ The provided prompts are there to help you to structure your thinking about some relevant
trends/changes under elements of PESTLE. However, it is not an exhaustive list!

❖ Your narration should also include your overall view, based on findings, of whether entering the
bicycle industry was all worth it (or not!)
Activity (3): Apply Porter’s Five Forces analysis to the Bicycle Industry
(20 min)
Force Assessing the Threat of Each Force ( Low , Moderate or High Threat) in the bicycle industry
Intensity of ▪ Is the number of competitors large ? Or extreme small? In between?
Rivalry ▪ Are competitors similar in size and/or capacity ?
▪ Is there an opportunity to sell differentiated product /service ?
Threat of New ▪ Are there advantages of economies of scale?
Entrants ▪ Is the Capital requirement low or high?
▪ If there are cost advantages, are they related to company size?
▪ To what extent buyers are loyal to existing brands
▪ Are any legal/political barriers to restrict the entrance of new companies?
Bargaining ▪ Are switching costs from one bicycle manufacturer to another high?
Power of ▪ What is the number of bicycle customers in the industry?
▪ Do customers want differentiated products?
Buyers ▪ How easy is it for customers to collect information for comparing bicycle providers or producers ?
Bargaining ▪ How many suppliers sell parts, items and/or production material in the bicycle industry?
Power of ▪ Are substitutes for suppliers available in the bicycle?
Suppliers ▪ Are switching costs from one supplier another low? High?
▪ Are items acquired account for a small portion of the cost of the entrants’ finished products?
Threat of ▪ Are substitutes of high quality ?
Substitutes ▪ Are the prices of substitute products significantly lower than those of the industry’s products?
▪ Are buyers’ switching costs low ? High?
Porter Five Forces- Presentation Tips!

❖ Avoid overly crowding your presentation slides with text

❖ Use bullet points under each force. You should address all forces

❖ Cite sources to support your analysis i.e. evidence

❖ Your narration should clearly indicate the level of threat of each force ( low, moderate, or high)

❖ Bonus to those who demonstrate some interrelationship among force ( i.e. complex thinking)

❖ Your narration should also include your overall view, based on findings, of whether the bicycle
industry is an attractive or unattractive industry
 The following seminar groups are under the direct lead
Have more of Rasha Goumaa (From Module Leadership Team)

Questions?
Tutor name Tutor Contact Seminar Group

1 Rasha Goumaa [email protected] BABM_ACF05

2 Rasha Goumaa [email protected] BABM_ACF07
3 Rasha Goumaa [email protected] BABM_MKT09
4 Manish Sherstha [email protected] BABM_MKT10
5 Manish Sherstha [email protected] BABM_ACF03
Your Tutor is your 6 Manish Sherstha [email protected] BABM_ECN03
7 Himi Gideon [email protected] BABM_ECN05
First point of 8 Himi Gideon [email protected] BABM_ACF06
contact 9
10
Himi Gideon
Himi Gideon
[email protected]
[email protected]
BABM_MKT04
BABM_HR01
11 Kiran Khan* [email protected] BABM_ACF09
12 Kiran Khan* [email protected] BABM_MKT17
13 Kiran Khan* [email protected] BABM_MKT14
14 Erkenwald Apur [email protected] BABM_ECN01
Queries in relation to Module's resource list, 15 Erkenwald Apur [email protected] BABM_ACF08
16 Erkenwald Apur [email protected] BABM_MKT08
Assessments, or any other personal queries
17 Jieya Lyu * [email protected] BAB_05
should be directed to ONE Module 18 Jieya Lyu* [email protected] BABM_MKT05
Leader according to the table shown on this 19 Jieya Lyu* [email protected] BABM_MKT07
slide : 20 Babajide Babatope [email protected] BABM_ACF02
21 Babajide Babatope [email protected] BABM_MTG16
22 Babajide Babatope [email protected] BABM_MKT13
23 Babajide Babatope [email protected] BABM_ENT05
24 Hafiz Khalid* [email protected] BABM_ENT07
25 Hafiz Khalid* [email protected] BABM_ENT04
26 Hafiz Khalid* [email protected] BABM_MKT19
27 Hafiz Khalid* [email protected] BABM_MKT20
28 Louise Woolley [email protected] BABM_ACF04
Have more The following seminar groups are under the direct lead
of Dami Pokubo (From Module Leadership Team)
Questions? 1
Tutor name

Daminabo Pokubo (Dami)

Tutor Contact

[email protected]
Seminar Group

BAB_08

2 Daminabo Pokubo (Dami) [email protected] BAB_02

3 Helen Cheng* [email protected] BABM_ECN04

4 Helen Cheng* [email protected] BABM_MKT01
5 Yuxi Zhao [email protected] BAB_06
6 Yuxi Zhao [email protected] BABM_MKT02
Your tutor is your 7 Kehinde Olafar [email protected] BABM_MKT11
first point of 8 Kehinde Olafar [email protected] BABM_HR03
9 Kehinde Olafar [email protected] BABM-ENT02
contact 10 Linda Antonio [email protected] BAB_01
11 Linda Antonio [email protected] BABM_HR02
12 Wajiha Kazim [email protected] BABM_MKT18
13 Wajiha Kazim [email protected] BAB_07
14 Muhammad Khalid [email protected] BABM_MKT03
15 Muhammad Khalid [email protected] BABM_ENT08
Queries in relation to Module's resource list, 16 Muhammad Khalid [email protected] BABM_MKT06
Assessments, or any other personal queries 17 Nana Wilson [email protected] BABM_MKT12
should be directed to ONE Module 18 Nana Wilson [email protected] BAB_04
Leader according to the table shown on this 19 Humayun Sheikh [email protected] BAB_03
20 Humayun Sheikh [email protected] BABM_ECN02
slide: 21 Humayun Sheikh [email protected] BABM_ACF01
22 Sarah Walker [email protected] BABM_ENT03
23 Sarah Walker [email protected] BAB_09
24 Barbie Nash* [email protected] BABM_ENT06
25 Barbie Nash* [email protected] BABM_ENT01
26 Barbie Nash* [email protected] BABM_MKT15
Thank you