Opportunity/ Identification and Product Selection

• Content: • Opportunity Identification• Product Selection• Conducting Feasibility Studies• Entry Strategies

By: Prof. Sonali Patil, IIMS PUNE

Opportunity Identification:• Profits • Growth • Power• Employee satisfaction and development• Quality Products and services• Market Leadership • Joy of Creation• Services to society

Search for Business Ideas• Observing Market• Prospective Consumers• Development in other Nations• Study of projects profiles• Government Organizations• Trade fairs and exhibition• Process the ideas• Technical feasibility• Commercial viability• Idea Selection

• Input Requirement • Information and intelligence• Personnel• Establishing of the Enterprise

Cont…

Product Selection:

• Elements of the Product Selection:• Supply-Gap• Fund• Availability of access to raw Materials• Technical Implication• Profitability/ Marketability• Availability of Qualified Personnel• Government Policies• Government Objectives

Product Selection Process

Idea Generation Screening

TestingProduct Development

Analysis of Ideas

Conducting Feasibility Studies

• Market Feasibility• Technical Feasibility• Financial Feasibility

FranchisingDefinition of Franchising

Franchising is a business model wherein an individual operates their own location(s) of a larger, more established company. For example, when you go to your local McDonald's, Subway, Dunkin' Donuts, or nearly any hotel in the United States, you are most likely at a franchise location.

Features of Franchise1.Well established business

A franchise is a readymade and well established business that needs expansion. It is a ready form of business seeking expansion in new market areas with the help of a local representative.

2. Needs limited investment

As franchise business is already set up by the franchisor, the initial investment required by the franchisee to enter and establish is relatively low.

3. Easy entry in new markets

As the goodwill and reputation is already set up in other countries, franchisor does not require more efforts to enter in new markets. He is easily accepted in the new markets.

Features of Franchise4. Business has large establishments

Franchise has large establishments around the world and operates through a network of local representatives in different market areas.

5. Helps in diverting business risks

By establishing outlets in different parts of the world franchise helps the owner of the firm to diversify his business risks.

6. Results in a large turnover

Franchise results in large volume of sales. Society is benefited by the management of franchisor and service skills of franchisee. Brand name and bumper publicity results in a large turnover.

Features of Franchise7. Separates labour and specialisation

Franchise results in division of labour and specialisation. The franchisor concentrates on production, whereas franchisee looks after distribution and service at a unit level. The advantages of division of labour and specialization benefits both.

8. Allows use of brand name and trademarkIn franchise selling the franchisor allows the franchisee to use his brand name, trademark, service mark and management skills for developing and expanding franchise business.

9. Business is based on mutual agreementFranchise business is based on mutual agreement or contract setting out terms and conditions for franchising. Agreement is based on the understanding between franchisor and franchisee. To avoid disputes, agreement should be drafted in a detailed manner.

Features of Franchise

10. Success needs a long-term relationship

For the successful functioning of a franchise business, both franchisor and franchisee have to remain committed in their long-term relationship, only then business will be mutually rewarding. Strong franchisee relationship enables the franchisor to sell a franchise more effectively, introduce needed changes into the system very easily and motivate franchisee and their managers to provide a consistent level of products and services to their customers.