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Ch 19 Identifying Business Ideas - Coggle Diagram
Ch 19 Identifying Business Ideas
Internal Sources: Entrepreneurs
Interests & Hobbies
Unexpected Events
Frustration
Skills & Knowledge
Internal Sources: Existing Firms
Brainstorming
Intrapreneurship
Research & Development (R&D)
External Sources: Entrepreneurs & Existing Business
Family & Friends
Networking
Media
Market Trends
State Agencies
Import Substitution
Competitors
Customer Feedback
Reasons for Conducting Market Research
Find out the market size
Identify competitors
Find out customer needs & wants
Identify trends
Stages in Market Research
What info will be researched?
How will data be collected?
Who will collect the info?
How long will it take to complete?
How much will it cost?
Gather/Analyse/Report on the data collected
Types of Market Research
Primary (Field)
Observation
Focus Groups
Surveys
Mystery Shoppers
Advantages
Specific info
Better Analysis
Timing
Confidentiality
Disadvantages
Time-consuming
Cost
Inaccurate Feedback
Business resources
Secondary (Desk)
Business Reports
Government Publications
Internet
Commercial Research Agencies
Media
Advantages
Cheaper than Primary
Faster than Primary
Large Volume of Info
Accurate
Disadvantages
Non-specific
Outdated
Copyright
Information Overload
Benefits of Market Research
Identify the target market
Reduce costs
Evaluate an advertising campaign
Forecast future trends
Identify problems
Development Process of a New Product
Idea Generation
Product Screening
Concept Development
Feasibility Study
Prototype Development
Test Marketing
Product Launch
Break-Even Point (BEP)
BEP = Fixed Costs/Contribution per unit
Profit at Forecast Output = Total Revenue - Total Costs
Margin of Safety at Forecast Output = Forecast Output (Sales) - BEP
Steps in Drawing a Break-Even Chart
Label the diagram
Draw the FC line
Plot & Label the TR line
Plot & Label the TC line
Label the BEP
Label the Profit at Forecast Output
Label the Margin of Safety (MoS)
Limitations of Break-Even Analysis
Sales
Selling price
Faulty products
Classification of costs
Changes in selling price