STM Project Guidelines

Faculty: Prof. Brajaraj Mohanty

 Contents
1 Executive Summary............................................................................................................................................................... 4
2 Industry Overview.................................................................................................................................................................. 5
2.1 Nature and Size of the Industry....................................................................................................................................... 5
2.2 Key Growth drivers for the industry................................................................................................................................. 6
2.3 Identification of Critical Success Factors (CSF)................................................................................................................ 6
2.4 Market Analysis based on CSFs....................................................................................................................................... 7
2.5 Industry Benchmarks....................................................................................................................................................... 7
2.6 PESTEL Analysis............................................................................................................................................................. 12
2.7 Porter’s Five Forces Analysis.......................................................................................................................................... 13
2.8 Strategic Group Mapping............................................................................................................................................... 13
2.9 Competitive Landscape................................................................................................................................................. 13
2.10 Market Segmentation.................................................................................................................................................... 14
2.11 Buying Criteria Analysis of the Industry......................................................................................................................... 14
2.12 Key trends and future developments............................................................................................................................. 15
3 Company Overview.............................................................................................................................................................. 16
3.1 Company background.................................................................................................................................................... 16
3.2 Timeline with key milestones and their strategic impact............................................................................................... 16
3.3 Vision, Mission, Goals, and Strategic Themes................................................................................................................ 16
3.4 Key Product and Service Portfolio.................................................................................................................................. 16
3.5 Core Competencies of the firm...................................................................................................................................... 16
 3.6 Business Model of the organization............................................................................................................................... 16
3.7 3rd Generation Balanced Scorecard (Amalgamation of 1st Generation BSC and Activity System Map)........................19
3.8 SWOT Analysis............................................................................................................................................................... 19
3.9 Competitor Analysis (identify competitors)................................................................................................................... 19
3.9.1 Based on Critical Success factors............................................................................................................................ 19
3.9.2 Based on Financial indicators.................................................................................................................................. 19
4 Future Growth Strategy for the organization........................................................................................................................ 20
4.1 Portfolio Analysis........................................................................................................................................................... 20
4.1.1 Based on BCG Matrix............................................................................................................................................... 20
4.2 Company’s Strategic Roadmap for future...................................................................................................................... 20
4.3 Product Market Investment Strategy............................................................................................................................. 21
4.4 Re-imagining the Organization with the transformed business model or Use-case based on SMAC and IOE................21
1 Executive Summary
Guidelines The executive summary should provide a brief overview of the organization and the industry in which it
operates. It should also illustrate the results of the analysis made in the report. It should provide the
future growth prospects in the industry for the organization. It should also highlight on the strategy for
any organization to gain competitive advantage in this industry.
2 Industry Overview
2.1 Nature and Size of the Industry

Guidelines  Brief Description of the industry segment or sub segment

 History and Evolution of the Industry
 Position of Industry depending on Industry Life Cycle (Introduction, Growth, maturity, decline)
 Size (% of National GDP) of the industry

History and Evolution of the industry

Key Consumers of this industry and

their changing needs

Stage in the Industry Life cycle

Total Available Market Size (National

and Global)
Total Serviceable Market Size (National
and Global)

2.2 Key Growth drivers for the Industry

Key Growth drivers Rationale

2.3 Identification of Critical Success Factors (CSF)

Critical Success Factor identified Rationale
CSF 1 eg. Churn Rate in Telecom
CSF 2 eg. Average Revenue per User in
Telecom
CSF 3
CSF 4

2.4 Market Analysis based on CSFs

Region CSF 1 CSF 2 CSF 3 CSF 4
 Global

North

South

East
India
West

North-East

Central

Note: Use data for the year 2013-14

2.5 Industry Benchmarks

Size of industry:

Industry Average of Top 5 Firms or Market Leader

Category Indicator players serving 75-80% of the market
2011- 2012- 2013- 2014-15 2011- 2012-13 2013- 2014-15
12 13 14 (till Q3) 12 14 (till Q3)

Industry Level Market Size

(National)
Size as % of
GDP
Inventory
turnover
 Industry Average of Top 5 Firms or Market Leader
Category Indicator players serving 75-80% of the market
2011- 2012- 2013- 2014-15 2011- 2012-13 2013- 2014-15
12 13 14 (till Q3) 12 14 (till Q3)
Receivables
Activity Ratios turnover
Payables
turnover
Asset
turnover
Current ratio
Liquidity Ratios
Quick ratio
Cash ratio
Debt-to-
assets ratio
Debt-to-
Solvency Ratios capital ratio
Debt-to-
equity ratio
Interest
coverage
ratio
Gross profit
margin
 Industry Average of Top 5 Firms or Market Leader
Category Indicator players serving 75-80% of the market
2011- 2012- 2013- 2014-15 2011- 2012-13 2013- 2014-15
12 13 14 (till Q3) 12 14 (till Q3)
Operating
profit margin
Profitability Ratios
Net profit
margin
Return on
assets (ROA)
Return on
equity (ROE)
Price to
Earnings
(P/E)
PEG Ratio =
Valuation Ratios or (P/E Ratio) /
Price Ratios Projected
Annual
Growth in
Earnings per
Share
Price to Cash
Flow
Price to Book
(P/B)
 Industry Average of Top 5 Firms or Market Leader
Category Indicator players serving 75-80% of the market
2011- 2012- 2013- 2014-15 2011- 2012-13 2013- 2014-15
12 13 14 (till Q3) 12 14 (till Q3)
Price to Sales
Dividend
Yield
Dividend
Pay-out Ratio
Enterprise
value (EV is
market
capitalisation
plus debt
minus cash)/
EBITDA
Staff
Turnover or
Industry
Attrition Rate

Competitive Ratios Staff Cost/

Salary as
percentage
of Sales
 Industry Average of Top 5 Firms or Market Leader
Category Indicator players serving 75-80% of the market
2011- 2012- 2013- 2014-15 2011- 2012-13 2013- 2014-15
12 13 14 (till Q3) 12 14 (till Q3)
Operating
Expenses as
percentage
of Sales
Depreciation
as
percentage
of Sales
Fixed Assets
to Sales
Revenue
Advertising
as
percentage
of Sales
In case you come across other benchmark ratios used in particular Industry, then please include them as well.
2.6 PESTEL Analysis
Category Description Key factors for analysis Rationale
Political

Economic

Social

Technological

Environmental

Legal
2.7 Porter’s Five Forces Analysis
Porter’s Five Forces Description Key factors for analysis Rationale
Buyer Power

Supplier Power

Existing Competition  Total No of firms (Listed as well

as Unlisted)
 No of large firms
Threat to new  Entry/ Exit barriers and costs
entrants

Threat to substitutes

Effect of
Complementors

2.8 Strategic Group Mapping

2.9 Competitive Landscape

 Value propositions ( Low Cost, Differentiation, Niche)
 Competitive Strength Assessment (Normal and Weighted)
2.10 Market Segmentation
Key Products and/or Services Regions

2.11 Buying Criteria Analysis of the Industry

Parameter Details End-user Segments Significance Attached (Low,

Medium, High)

Ex It is the loan duration over Individual Customers High

Loan Term for Banking Sector which the borrower has to
Loans repay the loan. SMEs
Corporate High
High

 Impact of buying criteria on consumer choices

 Listing of key buying criteria for different consumer segments

The impact of the buying criteria is graded on the basis of the intensity and duration of their impact on the current market
landscape. The magnitude of the impact has been categorized as described below:
  Low - Negligible or no impact on the market landscape
 Medium - Medium-level impact on the market
 High - Very high impact with radical influence on the growth of the market

2.12 Key trends and future developments

Key Trend Impact on Industry (Low, Medium, High) Certainty of Impact (Low probability,
medium probability, high probability)

Trend 1 examples
Trend 2
Trend 3
Trend 4

 Analysis of Trends with High Impact and High Certainty to be carried out
 Impact on strategies or business models to be highlighted
3 Company Overview
3.1 Company background
3.2 Timeline with key milestones and their strategic impact
3.3 Vision, Mission, Goals, and Strategic Themes
3.4 Key Product and Service Portfolio
3.5 Core Competencies of the firm
3.6 Business Model of the organization

Key Partners  Who are our Key Partners? Motivations for partnerships
 Who are our key suppliers?  Optimization and economy
 Which Key Resources are we  Reduction of risk and uncertainty
acquiring from partners?  Acquisition of particular resources and activities
 Which Key Activities do
partners perform?
Key  What Key Activities do our Categories
Activities Value Propositions require?  Production
 Our Distribution Channels?  Problem Solving
 Customer Relationships?  Platform/Network
 Revenue streams?
Value  What value do we deliver to Characteristics
Propositions the customer?  Newness
 Which one of our customer’s  Performance
problems are we helping to  Customization
solve?  “Getting the Job Done”
 What bundles of products and  Design
services are we offering to  Brand/Status
each Customer Segment?  Price
 Which customer needs are we  Cost Reduction
satisfying?  Risk Reduction
  Accessibility
 Convenience/Usability
Customer  What type of relationship
Relationship does each of our
s  Customer Segments expect
us to establish and maintain
with them?
 Which ones have we
established?
 How are they integrated with
the rest of our business
model?
 How costly are they?
Customer  For whom are we creating  Mass Market
Segments value?  Niche Market
 Who are our most important  Segmented
customers?  Diversified
 Multi-sided Platform
Key  What Key Resources do our Types of resources
Resources Value Propositions require?  Physical
 Our Distribution Channels?  Intellectual (brand patents, copyrights, data)
Customer Relationships?  Human
 Revenue Streams?  Financial
Channels  Through which Channels do Channel phases
our Customer Segments want 1. Awareness
to be reached? How do we raise awareness about our company’s products and
 How are we reaching them services?
now? 2. Evaluation
 How are our Channels How do we help customers evaluate our organization’s Value
integrated? Proposition?
 Which ones work best? 3. Purchase
 Which ones are most cost- How do we allow customers to purchase specific products and services?
efficient? 4. Delivery
  How are we integrating them
with customer routines?
Cost  What are the most important
Structure costs inherent in our business
model?
 Which Key Resources are
most expensive?
 Which Key Activities are most
expensive?
Revenue  For what value are our
Streams customers really willing to
pay?
 For what do they currently
pay?
 How are they currently
paying?
 How would they prefer to
pay?
 How much does each
Revenue Stream contribute to
overall revenues?
How do we deliver a Value Proposition to customers?
5. After sales
How do we provide post-purchase customer support
Is your business more
Cost Driven (leanest cost structure, low price value proposition,
maximum automation, extensive outsourcing)
Value Driven (focused on value creation, premium value proposition)
Sample characteristics
Fixed Costs (salaries, rents, utilities)
Variable costs
Economies of scale
Economies of scope
Types
 Asset sale
 Usage fee
 Subscription Fees
 Lending/Renting/Leasing
 Licensing
 Brokerage fees
 Advertising
Fixed pricing
 List Price
 Product feature dependent
 Customer segment
 dependent
 Volume dependent
Dynamic pricing
 Negotiation (bargaining)
 Yield Management
 Real-time-Market
3.7 3rd Generation Balanced Scorecard (Amalgamation of 1st Generation BSC and Activity System Map)
3.8 SWOT Analysis
3.9 Competitor Analysis (identify competitors)
3.9.1 Based on Critical Success factors
3.9.2 Based on Financial indicators
4 Future Growth Strategy for the organization
4.1 Portfolio Analysis
4.1.1 Based on BCG Matrix

4.2 Company’s Strategic Roadmap for future

Near Term (<- 2 years) Mid Term (2-5 years) Long Term (5-10 years)

Growth Areas

High Level Tasks

Potential Benefits to be
achieved

Rewards

Risks

Key Success Factors

4.3 Product Market Investment Strategy

Country of Category of Industry Country Risk Adjusted Product Market Investment

Investment Investment Reward to Reward to Risk Rewards Investment Strategy Rationale
Risk Ratio (A) Ratio (B) ( 0.65A +
0.35B)

Which Industry? Strategic Alliance? High Profit?

Potential
Market ?

Which Mergers/acquisitions? Cost

Product/service? FDI? efficiencies?

Ratio calculations based on reward and risk ratings from Business Monitor International Report – March 2014

4.4 Re-imagining the Organization with the transformed business model or Use-case based on SMAC and
IOE(Internet of Everything)
 Reimagining Business Models
 Reimagining Business Processes
 Reimagining Customer Segments
 Reimagining Products & Services
 Reimagining Workplaces
 Reimagining Channels