by sachin sharma manipal jaipur

1. Project Identification/ Screening of Project
Ideas

2. Project Identification/ Screening of Project
Ideas (Tasks involved)
• Generation of project ideas
• Monitoring the environment
• Corporate appraisal
• Preliminary screening
• Project rating index
• Sources of NPV
• Entrepreneurial skills

3. Generation of Ideas
• SWOT Analysis
• Determination of Objectives
• Brainstorming

4. Sources of Project Ideas
• Analysis of performance of existing industries
• Analysis of inputs and outputs of various industries
• Review imports and exports
• Review of five year plans and government policies
• Suggestions of financial institutions and development agencies
• Survey of local resources
• Analysis of economic and social trends
• New technological developments
• Emulating consumption patterns from abroad
• Exploring possibility of reviving sick units
• Analysis of unsatisfied needs of consumers
• Trade fairs
• Others

5. Monitoring the Environment
Economic Government Technological Socio-Demographic Competition
State of the
economy
Industrial Policy State of technology Population trends No of firms and
their market share
Overall rate of
growth
Tax Framework Emergence of new
technology
Income profile Entry barriers
Macro-economic
factors
Subsidiaries,
Concessions
Technical know-how Education &
Employment details
Marketing policies
Balance of Payment
Situation
Import and Export
Policies
Attitude towards
consumption and
investment etc.
Comparison with
substitute etc
Linkage with World
Economy
Financing Norms
Growth of Primary,
Secondary, Tertiary

6. Corporate Appraisal
Market &
Distribution
Productions &
Operations
Research &
Development
Corporate
Resources and
Personnel
Finance &
Accounting
Market Image Availability of
resources
Research
capabilities of firm
Corporate image Cost of capital
Market Share Capacity of plant &
machinery
Track record of new
product
development
Dynamism of Top
Management
Taxation
Product Line Location & layout Laboratories &
testing facilities
Industrial Relations Financial Leverage
Distribution
Network
Cost Structure-Fixed
& Variable
Competence &
commitment of
employees
Cashflows &
Liquidity
Customer Loyalty Accounting &
Control System

7. Preliminary Screening
• Compatibility with promoter
• Consistency with government regulations
• Availability of inputs
• Adequacy of markets
• Reasonableness of cost
• Acceptability of risk level
Changing technology
Project vulnerability through business cycles etc

8. Project Rating Index
• Identify the factors relevant for project rating
• Assign weight to these factors
• Rate the project proposal
• All factor scores are added to get the overall project rating index
• Cut off value is determined, project below this cut off value are
rejcted

9. Sources of Net Present Value
• Economies of scale
• Product differentiation
• Cost advantage
• Market reach
• Technological edge
• Government policy

10. Entrepreneurial Skills
• Willing to take risk
• Leader
• Able to exploit opportunities
• Rational decision maker