Generation and Screening of Project Ideas

GENERATION AND SCREENING OF PROJECT IDEAS
IDENTIFICATIO N OF FEASIBLE PROJECTS.
GENERATION OF IDEAS MONITORING THE ENV. CORPORATE APPRAISAL SCOUTING FOR PROJECT IDEAS PRELIMINARY SCREENING PROJECT RATING INDEX ON BEING AN ENTREPRENEUR
GENERATION OF IDEAS
SWOT analysis Clear articulation of objectives Fostering a conducive climate
Clear articulation of objectives

Cost reduction Productivity improvement Increase in capacity utilization Expansion into promising fields
Fostering a conducive climate

Motivate employees to think creatively by suggestion schemes, unconstrained environment, etc.
MONITORING THE ENV.

Economic sector Govt. Technological Socio-demographic Competition Supplier
Economic sector
State of economy Growth rate of different sectors Inflation World economy Cyclical fluctuations Balance of payment
Govt. Sector
Industrial Policy Tax framework Subsidies Incentives Concessions Exim policy Lending conditions of banks & financial institutions.
Technological Sector
Emergence of new tech. Access to tech know-how
Socio-demographic Sector
Population trends Income distribution Educational profile Age shifts in population Women employment Attitude towards consumption & investment
Competition sector
Market share No. of firms in the industry Entry barriers Comparison with substitute in terms of quality, price, appeal, functional performance
Supplier sector
Availability & cost of raw material Availability & cost of energy Availability & cost of money
CORPORATE APPRAISAL
Marketing & distribution Production & operation Corporate resources & personnel Finance & accounting R& D
Marketing & distribution

Market image Market share Distribution network Customer loyalty Marketing & distribution costs
Production & operation

Condition & capacity of Plant & m/c Raw material availability Locational advantage Degree of vertical integration
Corporate resources & personnel

Corporate image Top management dynamism Employee commitment & competence Clout with govt. & regulatory agencies
Finance & accounting

Cost of capital Tax situation Borrowing capacity Relations with shareholders & creditors Cash flows & liquidity
R& D
R&D capabilities of firm Lab & testing facilities Track record of new product development
SCOUTING FOR PROJECT IDEAS

1.Analyse the performance of existing industries 2.Examine the inputs & outputs of various industries 3.Review imports & exports 4.Study plan outlays & Govt. guidelines 5.Look at the suggestions of financial institutions & developmental agencies
6.Investigate local materials & resources 7.Analyse economic & social trends 8.Study new technological developments 9.Draw clues from consumption abroad 10.Explore the possibility of reviving sick units 11.Identify unfulfilled psychological needs 12.Attend trade fairs 13.Chance factor might favour
1.Analyse the performance of existing industries

Profitability & capacity utilization of existing industries which are profitable & risk free.
2.Examine the inputs & outputs of various industries

Raw materials, parts, supplies as inputs Products, waste product, by product as outputs
3.Review imports & exports

Study of statistics of last 5 to 7 years of imports & exports. It improves balance of payment Generates employment
4.Study plan outlays & Govt. guidelines

Guidelines to industries by department of industrial development, govt of india published annually . Gives information regarding structure, location, production performance, licensed & installed capacity , exports, future scope of various induatries.
5.Look at the suggestions of financial institutions & developmental agencies

Mckinsey PWC KSATECHNOPAK CII FICCI IBEF
6.Investigate local materials & resources

The national council of applied economic research (NCAER) publish surveys regionwise regarding potential of industrial development, resources , men, material, infrastructure facilities, etc.
7.Analyse economic & social trends

Study of economy & social trends can give ideas Time saving products, leisure & recreational activities, etc.
8.Study new technological developments

Council of scientific & industrial research develop new products, technology, process, etc.which can be commercialised.
9.Draw clues from consumption abroad

Products or services which are not known in India but famous abroad can be studied. Pre fabricated house, entertainment parks, etc.
10.Explore the possibility of reviving sick units

Close or on the verge of it can be revived by: Sound management system Infuse further capital Shorter gestation period
11.Identify unfulfilled psychological needs

Unfulfilled psychological needs can be catered to.
12.Attend trade fairs

It gives latest information about new products, developments, etc.
13.Chance factor might favour

Sometimes by chance one might come across an idea with commercial viability.
PRELIMINARY SCREENING
After considering the above mentioned factors one can generate number of ideas for project. They require preliminary screening.
PRELIMINARY SCREENING
It consists of : Compatibility with the promoter Consistency with govt. priorities Availability of inputs Adequacy of the market Reasonableness of cost Acceptability of risk level
1.Compatibility with the promoter:

Idea must be compatible with the interest , personality & resources of entrepreneur . Gives him chance to grow with less risk.
2.Consistency with govt. priorities:

Is project consistent with national goals Environmental effects Obtaining license Foreign exchange requirement
Availability of inputs
Resources(raw materials, capital,power,technology,etc .) are easily & reasonably available.
Adequacy of the market

Present market(domestic, international) Sales & distribution Economic,social,demographic trends. Growth potential ROI Competitors & their shares Barriers to entry
Reasonableness of cost
The cost structure of the project must enable it to realize an acceptable profit with a competitive price. Cost of inputs,labour,overheads,distrib ution,service,etc.
Acceptability of risk level
Tech change Substitute Competition from imports Business cycle Governemnt control over price & distribution.
PROJECT RATING INDEX

Identify factors relevant for project rating Assign weights to these factors Rate the project proposal on various factors , using a suitable rating scale Factor score=factor ratingxfactor weight Add all the factor scores to get the overall project rating index
PROJECT RATING INDEX

Factor
Factor weight
Rating
VG5 G4 A3 P2 VP1
Factor Score
ON BEING AN ENTREPRENEUR
Willingness to make sacrifices Leadership Decisiveness Confidence in the project Marketing orientation Strong ego Open mindedness

Generation and Screening of Project Ideas

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Generation and Screening of Project Ideas

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GENERATION AND SCREENING OF PROJECT IDEAS

IDENTIFICATIO N OF FEASIBLE PROJECTS.

Clear articulation of objectives

Fostering a conducive climate

MONITORING THE ENV.

Emergence of new tech. Access to tech know-how

Marketing & distribution

Production & operation

Corporate resources & personnel

Finance & accounting

SCOUTING FOR PROJECT IDEAS

1.Analyse the performance of existing industries

2.Examine the inputs & outputs of various industries

3.Review imports & exports

4.Study plan outlays & Govt. guidelines

5.Look at the suggestions of financial institutions & developmental agencies

6.Investigate local materials & resources

7.Analyse economic & social trends

8.Study new technological developments

9.Draw clues from consumption abroad

10.Explore the possibility of reviving sick units

11.Identify unfulfilled psychological needs

12.Attend trade fairs

13.Chance factor might favour

1.Compatibility with the promoter:

2.Consistency with govt. priorities:

Resources(raw materials, capital,power,technology,etc .) are easily & reasonably available.

Adequacy of the market

Acceptability of risk level

PROJECT RATING INDEX

PROJECT RATING INDEX

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