Common Questions to ask_most impt

Question 1

Market Questions_general

Answer 1

Market size, growth rate, and trends
Where is it in its lifecycle (emerging? Mature? declining?)
Industry drivers
Customer segmentations
Margins – what are the typical margins in the industry
Industry changes - MA? New players?, Changes in technology?, Regulations?
Distributions channels
Major players and market share
Product differentiation
Barriers to entry/exit

Question 2

Would You Invest_customers

Answer 2

Who are they
How can you reach them
How can you ensure you retain them

Question 3

Market Entry_general

Answer 3

Who are the competitors and what size market share do they have
How do their products differ from ours
How will we price our products or services
Are substitutions available
Are there any barriers to entry
Are there barriers to an exit? How would we exit if this market sours
What are the risks? Examples include changing market regulations or technology

Question 4

Developing a New Product_product

Answer 4

Will it cannibalize an existing product
Is the customer segmentation(s) the same
Can we use the same distribution channels
Can we use the same sales force – dont want a new sales force for just one product
How and where will this new product be produced
Will we have to hire new workers or retrain current workers
What’s special or proprietary about it? Is it patented? For how long
Are there similar products out there? Are there substitutions
What are the advantages and disadvantages of this new product
How does the new product fit in with the rest of our product line

Question 5

Growth_increasing revenue

Answer 5

Expand the number of distribution channels
Increase the product line through diversification of products or services (esp with products that won’t cannibalize sales of existing products)
Analyze the segments of the business with the highest future potential and margins
Invest in a marketing campaign
Acquire a competitor (esp if the question is an increasing market share)
Adjust prices (take price sensitivity of the customer into account. Lower price to inc volume and raise them to dec demand or inc profits per unit)
Create a seasonal balance (diff product each quarter)

Question 6

Developing a New Product_funding

Answer 6

How is the product being funded? Does out company have the cash or are we taking on debt? Can we support the debt under various economic conditions
What is the best allocation of funds

Question 7

Industry Analysis_drivers

Answer 7

Brand/street cred
Price
Quality
Endorsements
Fads
Marketing
Products
Size
Economics
Technologies

Question 8

Competitive Response_come for your market share

Answer 8

What is their new product and how does it differ from what we have
What has the competitor done differently? What changed?
Have any other competitors picked up market share?
Have the consumers needs changes
Did they increase or expand into new channels

Question 9

Industry analysis_general

Answer 9

Where is it in its lifecycle (emerging, mature, declining)
How has the industry been performing (growing or declining) over the last one, two, five, and ten years
How have we been doing compared with the industry
Who are the major players and what market share does each have? Who has the rest
Has the industry seen any major changes lately? These might include new players, new tech, increased regulation
What drives the industry? brand/street cred, price, quality, endorsements, fads, marketing, products, size, economics, or tech
Profitability. What are the margins

Question 10

Would You Invest_distribution channels

Answer 10

Which, and how many, dist channels can we rely on

Question 11

Would You Invest_market and strategic plans

Answer 11

What are the barriers to entering the market
Who are major players and what are their market shares
What will their response be

Question 12

Competitive Response_responses

Answer 12

Analyze our current product and redesign, repackage, or move upmarket
Introduce a new product
Increase our profile with a marketing and pr campaign
Build customer loyalty
Cut prices
Lock up raw materials and talent
Acquire them or another player in the same market
Merge with a comp to create a strategic advantage and become more powerful
Copy the comp

Question 13

Due Diligence (company and industry)_general

Answer 13

What kind of shape is the target company in?
Management?
Products?
Profitability?
Brand?
What is the standalone value?
What has been its growth rate?
Why is it on the market?
Consider all the items in the core box about analyzing
a company
How secure are the markets, customers, and suppliers
What are the margins like? Are they high volume, low margin, or low-volume-high-margin
How is the industry doing overall? And how is the company doing compared with the industry? Is it a leader in the field
How will competitors respond
Are there any legal reasons we can’t or should not acquire the target company
Are there technology risks
How much will it cost? Will the client overpay
Does the buyer have enough cash or access to capital markets

Question 14

Would You Invest_finances

Answer 14

How is the project funded
What is the best allocation of funds
Can we support the debt under various economic conditions

Question 15

Would You Invest_products and services

Answer 15

What is the product, service, or tech
What’s the competitive edge
What are the disadvantages
Is the tech proprietary

Question 16

Developing a New Product_marketing

Answer 16

How does this strategy affect our existing product line
Are we cannibalizing our own sales from existing product
Are we replacing an existing product
How will this strategy expand our customer base and increase our sales
What will the competitive response be
If we are entering new market, what are barriers to entry
Who are the major players and what are their market shares

Question 17

Company Questions_general

Answer 17

Profits and revenues for the last three years
Customer segmentations - Characteristics, Changing needs, Profitability by segment
Product mix - Costs/margins, Product differentiation, Market share
Production capabilities/capacity
Brand - strength and what is it
Distribution channels
WCS (what constitutes success?) - Which metric is used

Question 18

M&A_possible synergies

Answer 18

Cost Side
Reduction of employees
Reduction of administrative and factory overheads
Elimination of excess facilities and integration of
complementary technologies
Increase in purchasing power
Revenue Side
Cross-selling
Marketing, selling and distribution of similar or
complementary products
Gaining access to new markets
Sharing of distribution channels
Reduction or elimination of competition

Question 19

Would You Invest_management

Answer 19

How experienced is the mgmt team
What are its core competencies
Have they worked together before
Is there an advisory board

Question 20

Company_turn arounds

Answer 20

Why is it failing? Bad products or services? Bad management? Bad economy
Are competitors facing the same problem
Do we have access to capital
Is the company publicly traded or privately held

Question 21

Starting a New Business_general

Answer 21

Start with market entry questions
Who are competitors
What market share do they have
How do their products or services differ from ours
Barriers to entry/exit

Question 22

Market Entry_ways to enter

Answer 22

Start from scratch and grow organically
Acquire an existing player from within the industry (grow inorganically)

Form a joint venture/strategic alliance with another player with a similar interest. What can wash side bring to the venture

Outsourcing. have someone else manufacture the product, with the client still handling marketing and distribution

Question 23

Developing a New Product_consumer

Answer 23

Who are our customers and what is impt to them
How are they segmented
How can we best reach them
How can we ensure we retain them

Question 24

Market_market entry

Answer 24

What role does technology play in the industry and how quickly will it change
How will the competition respond

Question 25

M&A_reasons to purchase

Answer 25

Increase market access, boost the brand, and increase market share
Diversify the company’s holdings
Preempt the competition from acquiring the company
Target company is a threat
Inherit management talent
Obtain patents or licenses or products
Gain from synergies, cost savings, cultural integration, expansion of distribution channels, and customer base. Cross-sell products
Gain tax advantages
Increase shareholder value

Question 26

Market Entry_barriers to entry

Answer 26

Lack of brand or street cred
Capital requirements
Access to raw materials
Access to distribution channels
Lack of human capital
Government policy
Industries dominated by a small number of big players can be a barrier