This PowerPoint presentation complements our NCV 2 New Venture Creation Hands-on Training (Moduel 1) book published by Future Managers Pty Ltd. Visit www.futuremanagers.net for more details

1. New Venture Creation: Level 2 1
New Venture Creation: NCV Level 2New Venture Creation: NCV Level 2

2. New Venture Creation: Level 2 2
New Venture Creation: NCV Level 2New Venture Creation: NCV Level 2
Module 1: The business environment
Module 2: The markets & needs for a new venture
Module 3: Financial requirements for a new venture

3. New Venture Creation: Level 2 3
Module 1Module 1
The business environmentThe business environment

4. New Venture Creation: Level 2 4
In Module 1 we shall be covering:In Module 1 we shall be covering:
the structure and roles of different organisations
within their own industry in South Africa
the concept of a market and how to market
products and services
what market positioning is
the role of professional associations in the
business sector

5. New Venture Creation: Level 2 5
The 3 types of organisationsThe 3 types of organisations
operating in South Africaoperating in South Africa
Non-profit
organisations
Non-profit
organisations
Government
organisations
Government
organisations
Private business
organisations
Private business
organisations

6. New Venture Creation: Level 2 6
Government (public)Government (public)
organisationsorganisations
• offer goods & services to the
public
• sometimes compete with
private business
• are fully or partly owned by
the State (the government)

7. New Venture Creation: Level 2 7
One example ofOne example of
a government ora government or
public-ownedpublic-owned
organisation isorganisation is
………………

8. New Venture Creation: Level 2 8
Another exampleAnother example
isis
………………

9. New Venture Creation: Level 2 9
The role of government organisationsThe role of government organisations
● facilitating economic growth by providing
finance to ‘would be’ entrepreneurs
● protecting the public against malpractice by
private organisations (e.g. Public Protector)
● providing specialised services (e.g. National
Lottery)

10. New Venture Creation: Level 2 10
Refuse removalRefuse removal
ElectricityElectricity
??
??
??
The role of government organisationsThe role of government organisations
Providing Essential ServicesProviding Essential Services
??

11. New Venture Creation: Level 2 11
Rail linksRail links
Sanitation (sewage)Sanitation (sewage)
??
??
The role of government organisationsThe role of government organisations
Providing InfrastructureProviding Infrastructure

12. New Venture Creation: Level 2 12
Non-profit organisationsNon-profit organisations
• aim to uplift & provide support
to communities
• do not seek profits
• rely on financial support from
the communities they serve
• are privately managed by
community groups e.g.
churches

13. New Venture Creation: Level 2 13
One example ofOne example of
a non-profita non-profit
organisation isorganisation is
………………

14. New Venture Creation: Level 2 14
Another exampleAnother example
isis
………………

15. New Venture Creation: Level 2 15
The role of non-profit organisationsThe role of non-profit organisations
● providing specific medical support to people (e.g. Hospice)
● providing protection for animals (e.g. SPCA)
● protecting the environment (e.g. World Wildlife Fund – WWF)
● providing emergency relief in the case of natural disasters
● supporting the ‘arts’ in the country (e.g. Grahamstown Arts
Festival)
● lobbying for specific causes (e.g. Treatment Action Campaign –
TAG)

16. New Venture Creation: Level 2 16
Business organisationsBusiness organisations
• are the driving force of any
free-market economy
• accept risks in pursuit of
profits
• offer products and/or
services on the open market

17. New Venture Creation: Level 2 17
An example ofAn example of
a businessa business
organisation thatorganisation that
sellssells goodsgoods on theon the
open market isopen market is
………………

18. New Venture Creation: Level 2 18
An example of aAn example of a
businessbusiness
organisation thatorganisation that
sellssells servicesservices on theon the
open market isopen market is
isis
………………

19. New Venture Creation: Level 2 19
The role of business organisationsThe role of business organisations
● staying in business
● helping to grow the economy
● creating wealth for the country
● creating employment opportunities
● paying taxes to the government
● providing important services

20. New Venture Creation: Level 2 20
The value chain of aThe value chain of a
businessbusiness

21. New Venture Creation: Level 2 21
Outputs
• products
• services
Outputs
• products
• services
Inputs
• raw materials
• information
Inputs
• raw materials
• information
TransformationTransformation

22. New Venture Creation: Level 2 22
ProductionProductionPurchasingPurchasing
Core activities in the value chainCore activities in the value chain
DistributionDistribution MarketingMarketing

23. New Venture Creation: Level 2 23
ProductionProductionPurchasingPurchasing
Support activities in the value chainSupport activities in the value chain
DistributionDistribution MarketingMarketing
ProcurementProcurement Technology developmentTechnology development HR ManagementHR Management

24. New Venture Creation: Level 2 24
ShareholdersShareholders
CustomersCustomers
Key stakeholders in a businessKey stakeholders in a business
SuppliersSuppliers
CommunityCommunity
BusinessBusiness
EmployeesEmployees
GovernmentGovernment

25. New Venture Creation: Level 2 25
Business categoriesBusiness categories
Primary
Industries
Primary
Industries
Secondary
Industries
Secondary
Industries
Tertiary
Industries
Tertiary
Industries

26. New Venture Creation: Level 2 26
An example of aAn example of a
business sectorbusiness sector
in the primaryin the primary
category iscategory is
……………………

27. New Venture Creation: Level 2 27
An example of aAn example of a
business sectorbusiness sector
in the secondaryin the secondary
category iscategory is
……………………

28. New Venture Creation: Level 2 28
An example of aAn example of a
business sectorbusiness sector
in the tertiaryin the tertiary
category iscategory is
……………………

29. New Venture Creation: Level 2 29
The contribution of these categories to the GDP of South AfricaThe contribution of these categories to the GDP of South Africa
Primary, 11%
Secondary, 24%
Tertiary, 65%

30. New Venture Creation: Level 2 30
The contribution of the major business sectors to SA’s GDPThe contribution of the major business sectors to SA’s GDP
2.4%
2.4%
3.7%
6.2%
7.4%
9.7%
13.9%
14.7%
19.5%
20.1%
Electricity/water
Construction
Agriculture
Personal Services
Mining
Transport
W/sal/retail
Govt Services
Manufacturing
Financial Services

31. New Venture Creation: Level 2 31
Principles of business marketingPrinciples of business marketing
Business marketing is the decision and effort by a business to develop a
need-satisfying product or service and sell it successfully to customers.
Key principles are:
● A product is manufactured
● A service is delivered
● Success will only happen if there is a need for the product or service
e.g. a need for food, clothing, security or social contact
● Success is measured by making a profit while meeting the identified
need

32. New Venture Creation: Level 2 32
A product:A product:
• is tangible – it can be
seen, felt, held, tasted,
smelt and owned
• is bought in exchange
for something of value
(e.g. money)
• normally comes in
some kind of
packaging
• is owned by the
customer

33. New Venture Creation: Level 2 33
A service:A service:
• cannot be held, seen or
touched – this is called
service intangibility
• cannot be separated from the
person providing it – this is
called service inseparability
• will depend on how
professional the person
providing it is – this is called
service variability
• Cannot be ‘stored’ for later
use like a product – this is
called service perishability

34. New Venture Creation: Level 2 34
The principles of trade that define marketingThe principles of trade that define marketing
Needs, wants, demandsNeeds, wants, demands
ExchangeExchange
ValueValue

35. New Venture Creation: Level 2 35
The difference between needs, wants & demandsThe difference between needs, wants & demands
NeedsNeeds
WantsWants
DemandsDemands

36. New Venture Creation: Level 2 36
PricePriceProductProduct
The 4 P’s of marketingThe 4 P’s of marketing
PlacePlace PromotionPromotion

37. New Venture Creation: Level 2 37
In-store promotionIn-store promotion
AdvertisingAdvertising
PromotionPromotion
Direct MarketingDirect Marketing
Personal SellingPersonal Selling
• inform
• persuade
• remind
• inform
• persuade
• remind
PR (sponsorship)PR (sponsorship)
PR (brochures)PR (brochures)

38. New Venture Creation: Level 2 38
Market positioningMarket positioning
is based on theis based on the
competitive advantagecompetitive advantage
of a business – for exampleof a business – for example
a superior ……………….a superior ……………….
……………………………………. is the. is the
competitive advantage ofcompetitive advantage of
Coca-Coca-

39. New Venture Creation: Level 2 39
TheThe internalinternal strengths & weaknesses of a businessstrengths & weaknesses of a business
Strengths
• quality products
• cost effective manufacturing
• skilled & motivated employees
• strong brand identity in marketplace
• good business location
Strengths
• quality products
• cost effective manufacturing
• skilled & motivated employees
• strong brand identity in marketplace
• good business location
Weaknesses
• limited capital
• insufficient staff
• limited distribution capacity
• too few products
Weaknesses
• limited capital
• insufficient staff
• limited distribution capacity
• too few products

40. New Venture Creation: Level 2 40
TheThe externalexternal opportunities & threats for a businessopportunities & threats for a business
Opportunities
• growth in chosen market
• increase in middle class income
• new distribution methods
• export market opening up
Opportunities
• growth in chosen market
• increase in middle class income
• new distribution methods
• export market opening up
Threats
• new competitors entering market
• customer needs & wants changing
• labour unrest in country
• economic recession
Threats
• new competitors entering market
• customer needs & wants changing
• labour unrest in country
• economic recession

41. New Venture Creation: Level 2 41
Professional associationsProfessional associations
• organisations to which professional people
such as accountants, engineers, lawyers and
teachers belong
• ensure standards of professional ethics &
integrity are maintained amongst members
• provide professional training & accreditation
for members
• provide access to networking opportunities
and job information