31-10-2012, 06:02 PM
Generation and Screening of Project Ideas
generation and screening of projects.pdf (Size: 48.48 KB / Downloads: 85)
Generation of ideas
•Monitoring the environment
•Corporate appraisal
•Tools for identifying the investment opportunities
•Scouting for project ideas
•Preliminary screening
•Project rating index
•Sources of +ve NPV
•On being an entrepreneur...
•Questions
Corporate appraisal
•Marketing and distribution
• Market image
• Customer loyalty
• Market share
• Marketing and distribution costs
•Production and operations
• Condition and capacity of plant and machinery
• Degree of vertical integration
• Locational advantages
•RnD
• Research capabilities of the firm
• Track record of new product developments
• Co-ordination between research and operations
•Corporate resources and personnel
• Corporate image
• Clout with governmental and regulatory agencies
• Dynamism of top management
•Finance and accounting
• Financial leverage and borrowing capacity
• Cost of capital
• Cash flows and liquidity
Scouting for project ideas
Analyze performance of existing industries
•Examine the inputs and outputs of various industries
•Review imports and exports for last 5 yrs or so.
•Study plan outlays and governmental guidelines
•Look at the suggestions of financial institutions an developmental
agencies
•Investigate local material and resources
•Analyze economic and social trends
•Study new technological developments
•Draw clues from consumption abroad
•Explore the possibility of reviving sick units
•Identify unfulfilled psychological needs
•Attend trade fairs
•Simulate creativity for generation of new product ideas
•Hope that chance factor will favor you.
Project rating index
A preliminary evaluation may be translated into a project
rating index.
•Steps involved:
• Identify factors relevant for project rating
• Assign weights to these factors to indicate their
importance(total factor weights should equal 100%)
• Rate the project proposal on various factors( 5 or 7 point
scale)
• Multiply the factor rating with the factor weight to get the
factor score
• Add all of these to get the overall project rating index.
•Do the same for various project ideas and select one with the
highest score