(MGT403) Entrepreneurship

Assignment #2
Name: Muhammad Nouman Munir REG: CIIT/SP15-BSSE-068/cc

1. Key success factors determine the relative success of market participants and keys to
unlocking the secrets of competing successfully. Highlight common types of Key
success factors for competing successfully in any market segment.

Those functions, activities, or business practices, defined by the market not the company,
and as viewed by customers that are critical to the company/customer relationship. Key
Success Factors (KSF) are generally three to five areas that a company may focus on, to
attain its vision. KSF may also be major flaws that need to be addressed before other goals
can be completed or strengths that must be preserved.
MARKETING-RELATED KFS’s

A strong network of wholesale distributors/dealers

⇒ Available, dependable service and technical assistance

⇒ Accurate filling of buyer orders (few back orders or mistakes

⇒ Breadth of product line and production selection

⇒ Merchandising skills

⇒ Attractive styling/packaging
 ⇒ Customer guarantees and warranties (important in mail-order retailing, big
ticket purchases, new product introductions).

2. What are three basic generic strategy options about formulating strategies for
achieving organizational goals that comes under strategic management process.

The following three aspects or levels of strategy formulation, each with a different focus,
need to be dealt with in the formulation phase of strategic management. The three sets
of recommendations must be internally consistent and fit together in a mutually
supportive manner that forms an integrated hierarchy of strategy, in the order given.

Corporate Level Strategy: In this aspect of strategy, we are concerned with broad
decisions about the total organization's scope and direction. Basically, we consider what
changes should be made in our growth objective and strategy for achieving it, the lines
of business we are in, and how these lines of business fit together. It is useful to think
of three components of corporate level strategy: (a) growth or directional strategy (what
should be our growth objective, ranging from retrenchment through stability to varying
degrees of growth - and how do we accomplish this), (b) portfolio strategy (what should
be our portfolio of lines of business, which implicitly requires reconsidering how much
concentration or diversification we should have), and (c) parenting strategy (how we
allocate resources and manage capabilities and activities across the portfolio -- where
do we put special emphasis, and how much do we integrate our various lines of
business).

Competitive Strategy (often called Business Level Strategy): This involves deciding
how the company will compete within each line of business (LOB) or strategic business
unit (SBU).
 Functional Strategy: These more localized and shorter-horizon strategies deal with
how each functional area and unit will carry out its functional activities to be effective
and maximize resource productivity.

3. Discuss the steps involved in subjecting a business idea to a feasibility analysis? Further
discuss the three elements of feasibility analysis using the five forces model or
strategies of competition.

Feasibility analysis consists of three interrelated components: an industry and market

feasibility analysis, a product or service feasibility analysis, and a financial feasibility
analysis. The goal of the feasibility analysis is to determine whether an entrepreneur’s
idea is a viable foundation for creating a successful business.

Porter’s Five Forces Analysis

 Competitive Rivalry

There is significant competition in the discount furniture market with companies like
Ashley Furniture Home Stores, Home Depot or other local players. But IKEA has
managed to create a clear differentiated position in the market and remains the global
market leader in its industry.

 Threat of new Entrants

There is little threat from new entrants. The requisite expertise is difficult to replicate
and financial investments are significantly high. In addition, the market is saturated
enough with the existing players that there is little attraction for a competitor large
enough to threaten IKEA’s position.

 Threat of Substitutes

There is little threat of substitutes as the target market for IKEA is unlikely to switch to
higher end more classic styles of furniture. There are not many alternates that offer the
breadth of options that are available at IKEA.

 Bargaining Power of Buyers

 There is enough competition in the market to afford some power to the buyers in the
industry. Since IKEA has built up its USP with its competitive prices, customers can
choose to switch if there is any increase in the prices. There is little switching cost,
though loyalty may be a factor that prevents a switch.

 Bargaining Power of Suppliers

Suppliers do not have substantial bargaining power as there many options available to
IKEA around the world. There are numerous factories that have the requisite expertise
to partner with IKEA. Despite this IKEA attempts to firm long term strategic partnerships
with suppliers which benefits both supplier and the firm.

4. How would you prepare to make a formal presentation of your business plan to a
venture capital forum?

To prepare for a presentation in a venture capital forum there are several oral notes to
take. First, prepare the essentials of the industry and business plan into a 20-minute
presentation. Have additional talking points and information ready in case there was
more time allotted. Practice in front of friends and family, especially ones that don’t have
experience in the field to be discussed. That will help to anticipate questions and clarify
points that may be disguised by jargon. Have visual aids prepared so people can see an
actual representation of what is being discussed. Tailor parts of the presentation to focus
on what the investors get for their money and just as importantly, when. The essential
thing is to prepare and rehearse. Try to appear confident, enthusiastic, - but not overly so
- and knowledgeable.