Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 1© Copyright Troy Dyer 2004 Business Opportunities.

Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 1 © Copyright Troy Dyer 2004

Business Opportunities

• Identifying a Business Opportunity means identifying an unfulfilled need in the market, for which there is a customer willing pay for in exchange of the service or product.

• It is easy to identify an existing opportunity then totally new or innovative ideas

• The success rate of any new idea is 1:100 , hence quite risky



Types of Opportunities

• An unmet need is met by a new service or product• A new product or services replaces an existing product or service• A new product or service may be created because of a new technology, or pure innovation or changing

social or economic conditions.• The new product or service may create additional value to the customer, reduced cost, saves time or

increases convenience or saves energy or makes him happy.


Connecting personal vision to business strategy

Personal Vision

Business Vision

Business Strategy

Business Opportunit

y


Constructing & Deconstructing Personal & Business Vision

Personal and / or Business Vision (1)Personal and / or Business Vision (1)

Core IdeologyCore Ideology Envisioned FutureEnvisioned Future

Core ValuesCore Values Core PurposeCore Purpose 10 to 30 yr “BHAG”10 to 30 yr “BHAG” Vivid DescriptionVivid Description

• The individual and / or company’s essential mores and principles that guide its choices and actions• Enacted and not merely espoused values

• The individual and / or company’s essential reason for existing and for going forward• Long term mission

• “Big, Hairy, Audacious Goals”• Can be quantitative or qualitative• Involves David vs. Goliath type of thinking• Dreaming “the impossible dream”

• A clear picture of what the future will look like• Guided by passion, emotion and conviction• A compelling image to which everyone can relate

(1) Model adapted from Building Your Company’s Vision by James Collins and Jerry Porras (HBR, Sep-Oct, 1996)


Using PESTLE framework to identify growth opportunities

Strategic Forces

(PESTLE framework)

Categories of Entrepreneurial

Business Opportunity

Ideas for business opportunities

Investment criteria

Top 5 Opportunities

PESTLE

Model developed by Audax Ideas Management Consulting

PESTLE Forces:

• Political

• Economic

• Social

• Technology

• Legal

• Environmental


Combining the PESTLE analysis with an industry structure analysis to identify growth opportunities

Supplier Power

Buyer Power

New Entrants

Substitutes

Industry Rivalry

Political

Technological

Economic

Social

Legal

Environmental

Adapted from model in Competitive Strategy - by Michael Porter


Linking personal vision, business vision, business opportunity and business strategy

Relative Competitive Position (RCP)

Re

lativ

e A

ttra

ctiv

en

ess

(R

A)

Competitors

CustomersCapabilities

Ideal New

Venture Position

Industry

MarketVenture

RCP: a measure of:

(1) The extent of our capabilities to provide a product or service,

(2) which our customers want and are willing to pay for,

(3) in a manner which is better than our competitors, in a sustainable and value-adding manner

RA: a measure of the combined attractiveness of:

(1) The venture in terms of its economic profile and harvest potential

(2) The market in terms of its capacity to generate large, sustainable and growing profits

(3) The industry in terms of the relative power of various forces which determine the size and share of margins

Core

Competencies

Opportunity

Personal and

business

Vision

Entry Point:

What are the ventures out there that:

(1) we want to create or develop

(2) represents a business opportunity

(3) we can (or could) do well at Model developed by Audax Ideas Management Consulting


The RA/RCP matrix provides a useful approach to mapping out a business strategy

(2) Build required

capabilities

(3) Identify niche

opportunities

(1) Invest & pursue

opportunity

(4) Avoid / Wait & Re-assess in

future

High

Low

HighLow

Relative Competitive PositionRelative Competitive Position

Rel

ativ

e A

ttra

ctiv

enes

s o

f O

pp

ort

un

ity

Rel

ativ

e A

ttra

ctiv

enes

s o

f O

pp

ort

un

ity

• Business economics, risks and projected returns on investment

• Market size, growth and potential margins

• Industry structure and degree of competitiveness

• Macro-economic, political & regulatory environment

• Customer needs & wants

• Competitor capabilities

• Our capabilities


The Business Development Matrix is another way to map out different strategies for growing a business

Product Development

Market Development

New Business Development

Market Penetration

• Identify opportunities for each type of business development

• Assess relative attractiveness of different opportunities

• Assess our relative competitive position in the pursuit of different opportunities

• Agree overall business development strategy

• Identify opportunities for each type of business development

• Assess relative attractiveness of different opportunities

• Assess our relative competitive position in the pursuit of different opportunities

• Agree overall business development strategy

New

Existing

NewExisting

Target Customers & MarketsTarget Customers & Markets

Pro

du

cts

& S

ervi

ces

Pro

du

cts

& S

ervi

ces


The work done on business strategy fits into an overall Business Plan framework

• The industry and the company and its products / services

• Market research and analysis

• Economics of the business

• Marketing plan

• Design and development plans

• Manufacturing and operations plan

• Management team

• Overall schedule

• Critical risks, problems, and assumptions

• The financial plan

• Proposed company offering

Source: New Venture Creation, by Timmons and Spinelli - Chapter 12

• Financial Analysis• Industry and Market Analysis• Manufacturing / Operations Analysis

• Organisation Design• Product Design• Other

Appendices

• Description of the business concept, the business opportunity and the business strategy

• Target market and projections• Competitive advantages

Executive Summary

• Costs• Economics, profitability • Harvest potential• The lead entrepreneur & the management

team• The offering to investors

Detailed Contents


The Prioritization Matrix may be used to structure a more detailed Action Plan

Potential Impact of the Action (in terms of positive contribution

to business objectives

High

High

Low

Low

Ease of Implementation (in terms of complexity, resource requirements,

etc

1. Quick Hits - actions

with highest priority

2. Other quick hits -

second level of priority

3. Medium term actions

- detailed plan may be

required

4. List actions now, review later

to see if priority has

changed

List the actions and then evaluate, categorize and prioritize according to the above matrixList the actions and then evaluate, categorize and prioritize according to the above matrix

Design Institute - Prototype Awards Seminar - 20 November 2004 - Presentation on Business Strategy Page 1© Copyright Troy Dyer 2004 Business Opportunities.

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