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  2. Generation & screening of projectide INTRODUCTION A project is accomplished by performing asset ofactivities The project ideas as a process of identification of process begins with an analytical survey of the economy. The surveys & studies will give us ideas. 2
  3. Generation & screening of projectideas GENERATION OFIDEAS The project selection starts with generation of projectideas. The ideas are based on existing field of technology to offer variouspresent product of syllabus To stimulate the flow ideas the following are helpful 1) SWOT analysis Strengths Weakness Opportunities & Threats 2) Clear Articulation of objectives 3) Fostering a conducive climate 3
  4. Generation & screening of projecti 4 MONITORING THE ENVIRONMENT Competitive abilities of a firm depends on its environment The firm must systematically monitor the environment and assess its competitive abilities For purpose monitoring divided into six sectors Economic sector Governmental sector Technological sector Socio-demographic sector Competition sector Supplier sector.
  5. FORMULATION OF A PROJECT  It generally culminates in the preparation of a Project Report.  A Project Report is a document setting out in detail the nature of the activity proposed and the justification for Selection and Commitment of resources (men, materials, money) to the activity.
  6. WHAT ARE THE CONTENTS OF A PROJECT REPORT ?  Technology and Technical Arrangements.  Location and Land & Buildings.  Plant and Machinery and Raw Materials.  Utilities like power, Water Supply, Transportation, etc.  Labor  Schedule of Implementation  Cost of the Project.  Means of Financing.  Marketing and Selling Arrangements.  Profitability and Cash Flow and other Economic Considerations.  Government Consent.  Declaration of the Promoter.
  7. TECHNICAL FEASIBILITY  These are aimed at ensuring that all the physical facilities required for successful implementation of the project are available and the best of the alternative facilities are selected for the Project. For this importance is given to:  Proper location of the enterprise,  Selection of appropriate Technology, Plant & Machinery,  Availability of Raw Materials, Resources and other Inputs
  8. MARKETING FEASIBILITY  Marketing is the corner stone for the success of any business activity.  Marketing Feasibility studies attempt to determine the size of the market for any product service and its value in terms of revenue- generation.  The following aspects form part of Marketing Feasibiity Studies.  Definition of the Target Market  Marketing Segmentation  Determination of Market Share  This can be done by :  Estimating the total demand for the product service.  Estimating the market share of the organization
  9. FINANCIAL FEASIBILITY This studies aim to ensure the entrepreneur that:  The Project can meet the burden of servicing the debt i.e., the project can ensure sufficient revenues to pay the interest cost of borrowed funds and meet the schedules for repayment of loans.  The Project can earn sufficient revenues to satisfy the expectation of the owners of the promoting organization.
  10. It covers the following important aspects:  Project Cost Determination  Sources of Finance  Profitability Estimates  Cash Flow Estimates  Projected Financial Position and Flows
  11. PROJECT COST DETERMINATION  A proper determination of the cost of project is essential for determining the viability and profitability of the project. Following are the essential elements of Project Cost :  Land and Site Development  Buildings and Civil Works :  Plant and Machinery  Technical Know-how Fees  Miscellaneous Fixed Asset
  12. SOURCES OF FINANCE The cost of Project indicates the quantum of long-term finances needed by the organization to implement the project. The need for such funds is met out of  Equity Capital  Preference Capital  Borrowed Funds  Public deposits  Term loans  Lease finance  capital subsidies
  13. OTHERS:  Profitability estimates  Cash flow estimates  Economic feasibility
  14. WHAT IS APPRAISAL ?  It consists process of reviewing a given project and evaluating its content to approve or reject any project, through analysing the problem or need to be addressed by the project, solution generation options for solving the problem, selecting most feasible option .
  15.  Generally, promoters of a project approach Term Lending institutions for financing the Cost of the Project.  Commercial banks approaches for financing working capital needs.  However, Commercial Banks in India also finance project cost subject to certain monetary limits.  Such financial institutions appraise the Project Report submitted by the promoters for taking a decision on financing the project.  Appraisal Studies include:  Technical Appraisal,  Marketing Appraisal,  Financial Appraisal,  Economic Appraisal, and  Management Appraisal.
  16. Generation & screening of projec 5 CORPORATEAPPRAISEL Realistic appraisal of corporate strengths & weakness is essentialfor identifying investment opportunities Marketing & distribution Production & operations R &D Corporate resource and personnel Finance and accounting
  17. Generation & screening of proje 6 TOOLS FOR IDENTIFYING INVESTMENT OPPORTUNITY •Several useful tools that are helpful in identifyingpromising investment opportunities. a) Life cycle approach b) Porter model c) Experience Curve a) Life cycle approach Pioneering stage Rapid growth stage Maturity and stabilisation stage Decline stage
  18. Generation & screening of projec 7 b) Porter Model Profit potential of an industry depends on the combined strength of the following five basic competitive forces: Threat of new entrants Rivalry among existing frm Pressure from substitute products Bargaining power of buyers Bargaining power of sellers
  19. Generation & screening of projectide c) The Experience Curve 19 Cost per unit (present value) Accumulated volume of production Experience curve is used to find long term investments aimed at reducing costs It shows how the cost per unit behaves w.r.t the accumulated volume of production
  20. Generation & screening of proje SCOUTING OF PROJECT IDEAS 20 Analyse the performance of existing industries Examine the inputs and outputs of variousindustries Review imports and exports Study plan outlays and governmental guidelines
  21. Generation & screening of projectide PRELIMINARY SCREENING 21 By using the suggestions in the preceding section ,it is possible to develop a long list of project ideas Compatibility with the promoter Consistency with government priorities Availability of inputs Adequacy of market Reasonableness of cost Acceptability of risk level
  22. Generation & screening of projec 11 PROJECT RATING INDEX  Preliminary evaluation may be translated into a Project rating index  STEPS 1. Identify factors relevant for project rating 2. Assign weights to these factors 3. Rate the project proposal on various factors 4. For each factor multiply the factor rating with the factor weight to get the factor score 5. Add all the factor scores to get the overall project rating
  23. Generation & screening of projectide 12 SOURCES OF POSITIVE NET PRESENT VALUE(NPV) There are six main entry barriers that result in positive NPVprojects Economies of scale Product differentiation Cost advantage Marketing reach Technology edge Government policy
  24. Generation & screening of projectid BEINGAN ENTREPRENEUR 24 Qualities and traits of a successful entrpreneur Willingness to make sacrifices Leadership Decisiveness Confidence in the project Marketing orientation Strong ego
  25. Generation & screening of projectide CONCLUSION Thus the main objective of the generation and screening of project ideas is to identify investment opportunities which are feasible and promising and which merit further examination and appraisal 25
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