�Business Plan Competition
Presented by:
Omar Shawky
Bill Gates
Why write a Business Plan
1. Because I have to…
Why write a Business Plan
2. Because I Need to Understand My Business
The Right Ingredients
Company
Structure
Financials
Operations
&
Production
Team
Idea
Market
Competitive
Edge
Marketing
Strategy
Business
Plan
Business Planning Steps
1. The Idea
�Give a man a fish and you feed him for one day…��Teach him how to fish and you feed him forever …��Chinese Wisdom
Business Plan Competition
Key Questions for Business Planning
1- Where is the NEED? Idea Generation
2- What are your:
Strengths, Weaknesses, Opportunities, Threats SWOT Analysis
3- Where do you want to go at the end? Vision
4- Whom do you live for? Mission
5- How to get to achieve your objectives? Strategy
4.1 How do you grow? Corporate Strategy
4.2 How do you compete? Business Strategy
4.3 How to implement? Functional Strategy
6- What do you need? Resources Needed
7- How do you measure performance? KPIs
8- How do you ensure sustainability? Corporatization
Business Planning Model
Performance
Actual
Results
Evaluation
&
Control
Programs
Budget
Procedures
Activities
needed
to
accomplish
a plan
Cost of the
programs
Sequences
of steps
needed to
do the job
Objectives
Strategies
What
results to
accomplish
when
Plan to
achieve
mission &
objectives
Broad
guidelines
for
decision
making
Mission
Reasons
for
existence
Environmental
Scanning
Policies
Societal
Environment:
General Forces
Task
Environment
Industry Analysis
Internal
Structure:
Chain of
command
Culture:
Beliefs,
Expectations
Resources:
Assets, skills
Competencies
knowledge
External
Strategy Formulation
Strategy Implementation
Feedback Learning
Business Plan Competition Criteria
1- Market Analysis
2- Strategy Formulation
3- Implementation
4- Financial Modeling
5- Measuring Performance
6- Corporatization: Sustainability
7- Social Responsibility
1- Market Analysis
1- Identifying the NEED of specific Targeted Group
2- External Analysis: Opportunities & Threats
- Country: Political, Economical, Socio-Cultural & Technological Forces (PEST)
- Industry: New Entrants, Competitors, Substitute, Buyers & Suppliers (Porter 5 Forces)
3- Internal Analysis: Strengths & Weakness
- Company: Value-Chain Analysis
4- SWOT Analysis:
How you capitalize on them
How you avoid them
How maximize them
How minimize their effects
Strengths
Weaknesses
Opportunities
Threats
Internal
External
Country Analysis – PEST
Economic
Forces
availability
Technological
Forces
on R&D
on R&D
Technology need to
improve productivity
Political-Legal
Forces
foreign companies
Socio-Cultural
Forces
Industry Analysis Porter’s 5-Forces
Rivalry among
Competition
Bargaining Power
Of Suppliers
Entry Barriers
Bargaining Power
Of Buyers
Threat of
Substitute
Threat of new Entrants
Barriers to entry:
Rivalry among Competition
Intense rivalry related to :
Threat of Substitute
Threat of substitute :
Bargaining Power of Buyers
Buyers Power :
Bargaining Power of Suppliers
Suppliers Power :
Firm’s Resources
Resource: an asset, competency, skills, knowledge controlled by the corporation
Value Chain Analysis
Value Chain:
Set of value-added activities begins with basic raw material sourcing and ending with handling the product to the consumer
Center of Gravity:
The part of the value chain where the company has its greatest
expertise and capabilities.
Firm Infrastructure
(general management, accounting, finance, strategic planning)
Human Resource Management
(recruiting, training, development)
Technology Development
(R&D, product and process improvement)
Procurement
(purchasing of raw material, machines and supplies)
Inbound
Logistics
(raw material
Handling and
Warehousing)
Operations
(machining,
Assembling,
Testing)
Outbound
Logistics
(warehousing,
distribution
Of finished
goods)
Marketing
And Sales
(Ads,
promotion
Pricing,
Channel )
Services
(insulation,
Repair,
Parts)
Company - Value Chain Analysis
Profit
Margin
Support
Activities
Primary Activities
How you capitalize on them
How you avoid them
How maximize them
How minimize their effects
Strengths
Weaknesses
Opportunities
Threats
Internal
External
SWOT Analysis
2- Strategy Formulation
1- Vision: what do you want to be?
2- Mission: what do you exist for?
3- Objectives: SMART Short - Medium and Long Term
4- Strategies:
- Corporate Strategy: How to grow?
- Business Strategy: How to compete?
- Functional Strategy: How to do it? Strategic Marketing Plan.
Strategic Management Model
Performance
Actual
Results
Evaluation
&
Control
Programs
Budget
Procedures
Activities
needed
to
accomplish
a plan
Cost of the
programs
Sequences
of steps
needed to
do the job
Objectives
Strategies
What
results to
accomplish
when
Plan to
achieve
mission &
objectives
Broad
guidelines
for
decision
making
Mission
Reasons
for
existence
Environmental
Scanning
Policies
Societal
Environment:
General Forces
Task
Environment
Industry Analysis
Internal
Structure:
Chain of
command
Culture:
Beliefs,
Expectations
Resources:
Assets, skills
Competencies
knowledge
External
Strategy Formulation
Strategy Implementation
Feedback Learning
Vision
1st Objective
2nd Objective
3rd Objective
4th Objective
Strategy
Where do you want to go at the end?
What is the road map and major mile stones?
How will you reach your objectives?
Vision
Objectives
Mission:
Stakeholders
Family
Work
Friends
Religion
Country
Community
Who are your stakeholders and what is your mission to each one of them?
Mission:
Stakeholders
Shareholders
Employees
Customers
Suppliers
Country
Community
Who are your stakeholders and what is your mission to each one of them?
SMART Objectives
Specific
Measurable
Achievable
Relevant
Time-Bound
Hierarchy of Strategy
Functional
Strategy
Functional Strategy
How To Do Implement?
Corporate Strategy
How To Grow ?
Business Strategy
How To Compete?
Corporate Strategy
Manufacturing
Feeding Industry
Primary
Manufacturing
Retail
Distribution
Raw Material
Customers
New Product
New Region
Forward Integration
Backward Integration
Horizontal Integration
Vertical Integration
Horizontal Integration
Business Strategy
Business Strategy:
Emphasizes improvement of the competitive position:
1- Competitive (Apple Computers)
2- Cooperative (British Airways)
Competitive Advantage
Cost Leadership – Differentiation
Focused –integrated %
High
High
Low
Low
Relative Cost
Outstanding Success
Maintain Cost
advantage
Hope for
market growth
Maintain Specialty
Degree
of
Differentiation
(Swiss)
(Coca-Cola / Pepsi)
(China)
(Egyptian FIAT 128)
Functional Strategy
Functional Strategy:
How to achieve corporate and business unit strategy by maximizing resource productivity:
1- Marketing Plan
2- Production Plan
3- R&D Plan
4- HR Plan
5- Financial Plan
Your Marketing Plan
What is Marketing: Satisfying Needs Profitably
Business Planning Steps
Segmentation
A process of subdividing the market into distinct subsets of customers that behave in the same way or have similar need.
Bases for Segmenting Consumer Markets
These segmentation variables can be used singly or in combination
Geographic
Calls for dividing the market into different geographical units such as states, regions,counties & neighborhood
Demographic
Psychographic
Behavioral
Segmentation
Targeting
The act of evaluating and comparing the identified groups and then selecting one or more of them as the prospects
Selecting the Market Segments
Targeting
M1
M2
M3
P1
P2
P3
Single segment
Concentration
The company selects a single segment, it gains a strong knowledge of the segments needs & wants& achieves a string market position in the segment
M1
M2
M3
P1
P2
P3
Selective
Specialization
The company selects a number of segments all fits objectives & resources.
& all promises to be money makers
M1
M2
M3
P1
P2
P3
Product
Specialization
The company concentrates on a certain product that it sells to several segments.
It builds a strong reputation in the specific product area
M1
M2
M3
P1
P2
P3
Market
Specialization
The company concentrates on serving many needs of a particular customer group.
It builds a strong reputation in serving this customer group
M1
M2
M3
P1
P2
P3
Full Market
Coverage
The company serves all customer groups with all the products they might need.
Only very large firms can undertake a full market coverage strategy
Differentiation & Positioning
Differentiation & Positioning
Product
Characteristics that supplement the product’s basic function
The level at which the product’s primary characteristics operates
Degree to which produced units are identical & meet promised specs
(Perceived quality is more imp. than technical quality)
The product operating lifecycle under natural & stressful conditions
The measure of the probability that a product will not malfunction or fail within a specified period of time
The product’s looks & feel to the customer
Service
Speed, accuracy &care attending
Work done to make a product operates in its planned location
Training customer employees
Data information & advising services
Helping customers to have the product in a good working order
Tools for competitive Differentiation
McDonald’s
Mercedes
Cisco
Pizza Hut
Metro
McDonald’s
Tools for competitive Differentiation
Personnel
Required skill & knowledge
Friendly respectable & considerate
Trustworthy
The employees perform the service consistently & accurately
Respond quickly to request & problems
Make an effort to understand customers & communicate clearly
Channel
Image
Identity is the ways that the company aims to identify itself or position its product.
Image is how the public perceives the company or its products
Triggers company or brand recognition (Brand Logos)
Convey a storyline or mood or a performance level
Physical space in which the company produces or delivers its products
The company could build an identity through the type of event it sponsors
Differentiation & Positioning
Marlboro
Apple
Malaysia
Morgan Stanley
Vodafone
Chipsy
New Product Development Process
“How to launch a new product ?”
Product
1- Idea Generation
5- Business Analysis
6- Product Development
7- Market Testing
8- Commercialization
2- Idea Screening
3- Concept Development & Testing
4- Marketing Strategy Development
New Product Development Process
“How to launch a new product ?”
Growth
Decline
Maturity
Emerging
Profits
Sales
Product Life Cycle
BCG Matrix
High
High
Low
Low
Relative Market Share
?
Question Mark
Dog
Cash Cow
Star
Market
Growth
Rate
Value-Delivery Process
Product
Design
Procure
Make
Price
Sell
Advertise
Promote
Distribute
Service
Make the Product
Sell the Product
Customer
Segmentation
Market
Selection/
Focus
Targeting
Value
Positioning
Product
Development
Service
Development
Sourcing
Making
Pricing
Distributing
Serving
Sales
Force
Sales
Promotion
Advertising
Choose the Value
Provide the Value
Communicate the Value
(a) Traditional Physical Process Sequence
(b) Value Creation and Delivery Sequence
Strategic Marketing
Tactical Marketing
Marketing Plan Process
Marketing Research
Segmenting
Positioning
Targeting
Defining Target Market
Needs, Wants, Demand
Product
Variety
Quality
Design
Features
Brand
Packaging
Size
Services
Warranty
Return
Price
Price List
Discounts
Allowances
Payments
Credit
Promotion
Promotions
Advertising
Sales Force
Public
relation
Direct
marketing
Place
Channels
Coverage
Assortment
Location
Inventory
Transport
Marketing Mix
4 Ps
4 Ps 4 Cs
Marketing Mix
Business Planning Steps
2. Market Analysis
Market Analysis (cont’d)
It is all about your EDGE
3. Marketing Strategy
Business Model
How Shall I reach my target customers?
Business Planning Steps
4. Production plan
Business Planning Steps
5. Management Plans
3- Implementation
1- Action Plan: Programs needed to achieve the targeted objectives
2- Procedures: Sequences of the programs
3- Budgets for such programs
4- Tools & resources needed
4- Financial Modeling
1- Projected Income Statement
2- Projected Cash Flow Statement
3- Projected Capital Expenditure
4- Projected Investments Required
5- Measuring Performance (KPIs)
1- Measuring Profitability
2- Measuring Feasibility: Return on Investments
3- Measuring Market Penetration
4- Measuring Satisfaction
Structure –control - benchmark
6- Corporatization: Sustainability
1- Legal Structure
2- Organization Structure
3- Logo & Slogan
4- Team
7- Social Responsibility
1- What target market will be your project benefit (non-financially)
2- What specific programs or action will your project perform to benefit such segment
3- How do you measure the effect?
4- How do you ensure sustainability?
Business Planning Steps
6. Financial Plans
Income Statement
Objective: provides information about the firm’s operating activities over a specific period of time.
Revenue: 100 100%
- Cost of Goods Sold (COGS): 60 60%
Gross Profit (Profit Margin) 40 40%
Operating Expenses:
General & Administration 8 8%
Sales & Marketing 12 12%
- Total Operating Expenses 20 20%
Earning Before Interest, Tax, Depreciation & Amortization (EBITDA)20 20%
- Depreciation & Amortization 5 5%
Earning Before Interest and Tax (EBIT) 15 15%
- Interest Expenses 5 5%
Net Income Before Tax 10 10%
-Taxes 2 2%
Net Income 8 8%
Financial Plans (cont’d)
Business Planning Steps
7. The Company
Mission – Values - Objectives
Elements of the �Business Plan
Thank You
&
God Bless You
Omar Shawky