Common Questions to ask_most impt Flashcards
(26 cards)
Market Questions_general
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
Would You Invest_customers
Who are they
How can you reach them
How can you ensure you retain them
Market Entry_general
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
Developing a New Product_product
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
Growth_increasing revenue
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)
Developing a New Product_funding
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
Industry Analysis_drivers
Brand/street cred Price Quality Endorsements Fads Marketing Products Size Economics Technologies
Competitive Response_come for your market share
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
Industry analysis_general
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
Would You Invest_distribution channels
Which, and how many, dist channels can we rely on
Would You Invest_market and strategic plans
What are the barriers to entering the market
Who are major players and what are their market shares
What will their response be
Competitive Response_responses
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
Due Diligence (company and industry)_general
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
Would You Invest_finances
How is the project funded
What is the best allocation of funds
Can we support the debt under various economic conditions
Would You Invest_products and services
What is the product, service, or tech
What’s the competitive edge
What are the disadvantages
Is the tech proprietary
Developing a New Product_marketing
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
Company Questions_general
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
M&A_possible synergies
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
Would You Invest_management
How experienced is the mgmt team
What are its core competencies
Have they worked together before
Is there an advisory board
Company_turn arounds
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
Starting a New Business_general
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
Market Entry_ways to enter
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
Developing a New Product_consumer
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
Market_market entry
What role does technology play in the industry and how quickly will it change
How will the competition respond
