Monday, November 12, 2007

Why Is My Skin Mottled

The Business Plan - the simple story (5)

third sector / market. - The external view of the company


After the chapters on "company" and product / service, "the quasi represent the internal view of the company is now following the outside perspective on the company. The external view includes the areas
- Industries
- Market
- Competition


3.1. Industry

"The industry - that while you are fighting"

As an industry (also known as industry, in English: "industry") is known in the industry, the sum of the companies that produce similar products or provide similar services and offer. The industry is divided into 2 segments, the industry representation in general and industry analysis.

industry profile

is in the industry view it first of all a matter of describing what business the company assigns the founding team (what industry you are Company feels a part). Then, an overview of the general development in the sector, the dynamics and the importance of innovation and technological Forestry step for the industry are given.

Furthermore, it is necessary here
possible - economic,
- legal,
- eco
- social and
- regional influences,
present, which are relevant to your industry or in the near future will be largely (if already known or estimated). Similarly, here on issues such as prices, expected returns and potential growth factors enter into the industry. Finally

makes it make sense to assess their own position in the sector estimate. This gives the reader a sense of the business plan as the contractor team (team founder), the industry generally, with all its influences can see and compare this with their own beliefs and experiences.

industry analysis

The industry analysis aims to be the intensity of the competition in a relevant market. This is done usefully with reference to the analysis of the 5 market forces after Michael Porter. This 5 Market forces are:

- market entry barriers : This will aim to show how difficult or easy it is to bring a new company in the sector distance. The easier it is, the smaller but the motivation of investors to invest in a new company. The higher the barriers to entry, therefore, appear more attractive investment. Entry barriers may include:
o Legal nature (license, etc.)
o knowledge (education, experience)
o Financial Nature (high initial investment)

- threat of substitute products : This is is to be as high the threat from similar products (services) for their own products / services. Again and again: The lower the threat, the more likely investors are willing to invest in a company, or vice versa, the greater the danger of substitute products, the less interesting is a company for potential investors.

- market power (bargaining power) of suppliers : An important point in the industry analysis is the possible dependence on suppliers. The higher the dependency, the greater the risk of price increases for the purchase of goods and - as a result - the less interesting is a company for investors. This means that a company should then seek to have this matter independently, or with a strong potential suppliers to enter into long-term, contractually secured supply agreements.

- market power (bargaining power) of customers : that which applies to the suppliers, also applies to the dependence of potential major customers. Once this dependency is possible, by reducing the sale price will be considered by that customer as a result of pressure, undermining the profitability of the company. Even many large existing companies therefore describe in their annual reports, that they have no client who makes more than a certain percentage of the total sales (usually 10%), in order not only come from the front to exclude potential dependencies. Because investors have no interest in a company with a possible dependence on one or few major customers.

- rivalry within the industry : The rivalry within the industry is really only a summary of the above points. The rivalry within an industry will therefore be higher the:
o Low market entry barriers
o Greater than the risk of substitute products
o the Greater Market power of suppliers
o greater the market power of customers
Conversely, the rivalry in an industry the less, each:
o Greater than the market entry barriers
o Low risk of substitute products
o Low market power of suppliers
o Low market power of customers

These are all essential information needed by an investor to make a decision for or against an investment in a company.


more information, and the central questions of this chapter, see: http://www.gruenderservice.at/publikationen/Handbuch_p4ye_teil1.pdf

In Technical paper next I go to the chapter on "market" go and treat the issues including market representation, market segmentation, target customers.

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