1. Provide 5 examples of what might influence potential business ideas.

ANS. Example of things which might influence potential business ideas are as follow-

 Period of demand – for example if an entrepreneur is willing to start business

dealing in masks and sanitizers currently because of the increased demand of
the pandemic he should analyze that the demand iss ephemeral and is going to
diminish in a year or two as situation normalizes. If he wants to pursue this as
long term business then he should target hospitals, dispensaries etc.
 Availability of credit – if the credit is easily available at cheap rate of intrest then it
is the right time otherwise the entrepreneur should take cautious decisions.
 Competetion in the market- rival products must also be taken into account while
launching a new product or starting a new venture.
 Locality of the enterprise- this is also an important decision to be taken care of.
The entrepreneur will have to make sure that the place of business suits the
types of customers he is targeting.
 Form of ownership of venture- the form of ownership should also be taken into
account . various factors such as capital requirements, the degree of control over
operations etc will be deciding factor whether the person goes for sole
proprietorship, partnership etc.

2. When gathering information for business ideas, who might you consult?
Provide at least 6 examples.

ANS. The following persons must be consulted-

BUSINESS ANALYSIST- he can offer a lots of relevant information to the rookie

entrepreneur regarding the market conditions and other relevant factors.

REAL ESTATE AGENT- he will be a useful asset in suggesting the right place for the
new venture.

RIVAL COMPETETIOR- if someone in the same line of business is willing to give

advice then he can offer a lot more than just simple trade information.

MACHINE VENDOR- the person selling the machine and other fixed asset relted to the
line of business can offe a lot of informationin terms capital requirement and estitamated
ROI.

POTENTIAL CUSTOMERS- a survey among the potential customers may also be

conducted to know about the prospects of the business.

BANKS- financial institutions must also be consulted to know of the ease and extent of
availability of credit.
 3. Identify 3 forms of potential customer information for business ideas.

ANS. Pontention customer information can be derived via-

Conducting online surveys- surveys in the form of google forms could be circulated to
gather relevant information.

Door to door surveys – this can be done to gather extensive information which will be
possible in case of online surveys.

Analysis of data of rival firms such as sales figures of their products could be reviewed
to gather information regarding customer preferences.

4. When researching business opportunities, what should be identified and

considered? Provide 4 examples.

ANS. Following factors must be considered.

1. Consumer segmentation

To understand your demand, you must identify consumer segments that share common
characteristics. These characteristics can be “hard” variables such as age, gender,
place of residence, educational level, occupation and level of income or “soft” variables
such as lifestyle, attitude, values and purchasing motivations.

Hard variables can help estimate the number of potential customers a business can
have. For example, a nappies/diapers producer should know how many children under
3 years live in a certain country as well as the birth rate. Soft variables can help identify
motivations that lead to purchasing decisions including price, prestige, convenience,
durability and design.

2. Purchase situation analysis

Purchase situations must also be examined to uncover expansion opportunities.

Questions to ask when reviewing purchase analysis are:

When do people buy our product or service?

Is it when they need it?

Where do people make the purchase?

How do they pay?

Looking at distribution channels, payment methods and all other circumstances that
involve purchasing decisions can teach you how consumers buy and how you can
position your product appropriately. Offering new shopping alternatives may bring new
customers. For example, vending machines offering snacks like yoghurt and individual
juices have been introduced in the hallways of the subway of Santiago de Chile,
promoting on-the-go consumption.

Another aspect to explore is the acceptance of different means of payment. For

example, Amazon recently launched Amazon Cash in the US, enabling consumers
without credit cards to shop online by adding credit to their personal Amazon accounts.

3. Direct competition analysis

In addition to analysing demand and purchasing situations, it is important to analyse

supply. Knowing the existing players in the market where you are competing or going to
compete is important when evaluating opportunities. Relevant questions in this case
are:

What are the products and brands of our industry that are growing more significantly
and why?

What is their value proposition?

What competitive advantage do we have over them?

5. Outline 5 steps to estimate market size.

ANS. Below are the 5 basic steps in estimating market size.

1. Defining the Market 

Knowing the level of detail necessary to approach your strategic questions is the key
to properly scoping your market sizing approach. Defining your target market should
always be the first step in estimating market size, and it is critical that you do not
stray from your determined market definition through the data collection process.

Market size can be viewed in terms of Total Available Market (TAM), Served
Available Market (SAM), and Share of Market (SOM). Total Available Market refers
to the combined revenue or unit volume in a specified market. Often a company or
investor will require the market size or Total Available Market for a particular
geographic area. If we take the example of food packaging, the Total Available
Market can be calculated by adding sales of food packaging producers in a
particular geographic region or market segment.

The Served Available Market refers to the percentage or size of TAM that a
company can reasonably serve based on product, technology and geographic
constraints. SAM typically will be less than TAM. Using the same example of food
packaging, if the TAM for food packaging is $200 BN, then the Served Available
Market for companies making flexible packaging would be only a percentage of
TAM. Lastly, Share of Market or SOM refers to the percentage of SAM that a
particular company currently serves or plans to serve. Again, SOM should be less
than SAM except in the case of a monopoly.

In your market sizing process, start by determining what products or services should
be included as part of your TAM. Then narrow down by geographic scope—US,
North America, Europe, etc. Another factor to consider is the timeframe. Are you
looking for historic market sizing or future projections? By defining what should be
included in your market sizing estimation, your company can more accurately
determine the market potential and the estimated available share of the market.

2. Determining Your Approach

There are two basic methodologies for determining market size: top-down and
bottom-up. Your selected approach may be based on what market information is
available. However, the best approach is to develop market sizing estimations using
both methodologies in order to gain a higher confidence in your estimation.

The top-down methodology uses a broad market size figure and determines the
percentage that the target market represents. For example, to determine the TAM
for food packaging, you might start with retail sales of packaged food and multiply by
an assumed packaging cost (e.g. 10% of the total retail food value is packaging
cost). In general, a top-down approach is typically a quicker, more time efficient
approach. It is great for validation or a quick assessment of market size but seldom
will provide the detail necessary for a true opportunity analysis.

The bottom-up methodology builds the TAM by totaling the main variables of the
target market. Using the same example of food packaging, a researcher might total
the food packaging sales of packaging producers – all food packaging or by
package type or by geography. This method is generally considered to be more
accurate and takes considerably more time to complete. As a result, the bottom-up
method is a more valid estimate because it is less likely to include non-addressable
revenue or units.
3. Selecting Sources
Your selected approach will dictate the necessary sources to estimate market size. 
desk research searches for existing data and is the most commonly used form of
research in this type of exercise because it is quicker to obtain and therefore usually
more cost effective. Through general web searching, a wealth of information can be
found at little or no cost. Subscription-based or syndicated research is a great place
to start, but there are also free sources that contain valuable information. Articles
about companies or products in the target market will often quote data from these
sources. You might also check whitepapers and product announcements for similar
information. Publicly held companies are required to share information in analyst
and investor reports. Quarterly and annual reports are typically available on these
company websites as well as through the SEC filings. Also, trade associations will
often conduct market research and aggregate industry data.

Primary research, also called field research, is often used in addition to secondary
research. The primary research can take on many forms and can strengthen your
understanding of the market, allowing you to make better informed assumptions.
The most versatile form of primary research is in-depth telephone interviews that
can be used to capture more sensitive information. If possible, on-site visits can be
used to confirm or contradict market sizing estimations or determine key information
on market trends, such as technology, market performance, relative competitive
position or other information dealing with understanding scope and defining the
target market.

4. Data Structuring—Typology 
To further develop your understanding of the market, it is important to gather trend
information, which is typically in the form of qualitative data. This information can
come through secondary research or comments from primary research. If we look at
food packaging, it may be of interest to evaluate trends for specific food segments,
such as dairy, meats/poultry/fish, or beverages. For example, look for trends in beef
packaging that differ from chicken or pork. It may also be valuable to look for trends
in packaging type (cans, cartons, trays, etc.) or fill technology (hot fill, aseptic, ESL,
etc.).

Once the trends information has been collected, you can start structuring data by
group or theme. Typology is the strategy for qualitative data analysis to group
findings into distinct categories in order to identify data themes.
This process allows the researcher to quickly consider the value of information by
comparing with other information in the same “cluster” or “line.” Typology is also
useful for creating a story line as the project moves into analysis stage and the
development of conclusions.

5. Data Analysis
As mentioned above, it is often necessary to develop multiple estimates using
different approaches or sources. This is called triangulation. When multiple sources
or estimations triangulate, the confidence in a market estimate increases. If the
approaches widely differ, additional research is required to reduce risk and is
recommended to narrow the range of market sizing estimates.

Common pitfalls or mistakes often start early on by not properly defining the market
or gathering data from non-reputable sources. The market definition should remain
consistent throughout the data collection process and methodology should be based
on market knowledge—not just demographics. Where possible, attempt to verify
each significant finding through multiple published source materials or primary
research. By confirming findings, you are able to leverage the value of various
information sources and thus increase confidence in the final results.

6. Explain at least 5 ways to identify and evolve with industry trends.

ANS. ways to identify and evolve with industry trends are as follow-

1. Take advantage of industry research and trends reports.

One of the simplest things you can do to better recognize trends is read research
reports or solution guides. Often, industry leaders perform original research and compile
their findings in one large report, and by taking the time to actually read through it
beyond the executive summary, you can almost always find something in it that's
valuable and relevant to what's trending right now in your space.

As the CEO of a content marketing agency, I like following a variety of marketing reports
to stay on top of trends--whether it's reading about trends in content marketing from
Content Marketing Institute's research reports or digging through a specific reports from
ITSMA's report library.

These reports don't contain the word of god or anything, but reading a variety of reports
can help you get a feel for the landscape and where things are headed. And you can
use the info you gather for things like building keynote speeches or simply just making
sure you're leading your company in the right direction.
2. Regularly follow publications and influencers in your industry.

Let's be honest--we don't all have the time or desire to read through every interesting
report a leader in our space produces. If you aren't in it for the long read, a good
alternative is making a point to read through top blogs and publications in your industry
every day.

A lot of the articles in those publications will probably reference data from the longer
reports you don't have time to read in full anyway, so you can still gather that info in a
more conversational, easy-to-digest format. For example, I wrote an article on PR
trends in 2016, and in that article, I include data from industry reports, along with my
personal experiences in the industry--both of which help my readers evolve with trends.

3. Use different tools and analytics systems to identify the direction trends are heading.

Depending on your industry, your audience, your goals, and even the size of your
company, different tools and metrics will be important to you to identify trends.

Fortunately for me, when I look at things like Google Trends, I can see from a big-
picture perspective that the area my company specializes in--thought leadership--is
steadily increasing in search interest. To break it down more specifically, my marketing
team uses tools like Google AdWords and Moz to better pinpoint exact keywords and
queries, and from there, we can analyze the big picture and the smaller picture to
evolve with those trends.

Whatever you use, it's important to use a variety of tools together (from Google to your
CRM system to a customizable analytics template) to track your customers' behavior,
any correlations among a specific audience, and your performance.

4. Make it a point to surround yourself with smart people.

Have you ever heard the saying, "If you're the smartest person in the room, you're in the
wrong room"? Well, it's true--and especially so if we're talking about trends and evolving
your company with them.

I spoke at the Collision Conference (and at ITSMA shortly after), and between the two, I
feel like there are a lot fewer surprises that can blindside me--the countless intelligent
people at those events gave me a better pulse on where the industry is heading.

If you're looking to find yourself in a room of smart people, you can check out the
articles I've written on marketing conferences and entrepreneur conferences to point
you in the right direction.
5. Build and maintain a close group of advisers.

"Boards of advisers" never really got me excited as a young entrepreneur--and,

honestly, I still don't care for them. The formality and structure of boards like these
always seemed to stifle the kind of candid, conversational elements that make
relationships so valuable.

Instead, I keep a very close group of friends, peers, and partners as my informal group
of advisers. Together, they're able to show me all kinds of different perspectives, help
me see things that weren't on my radar before, and spot what's coming around the
curve. And I can do the same for them.

7. In order to identify possible market needs in relation to business ideas, you must
gather information from primary and secondary sources. Provide 3 examples of a
primary source and 3 examples of a secondary source.

ANS. Examples of primary souces include-

 Interviews (telephone or face-to-face)

 Surveys (online or mail)

 Questionnaires (online or mail)

 Focus groups

 Visits to competitors' locations

Examples of secondary sorces include-

 books
 newspapers
 Magazines
 trade publications
 journals articles

8. Ethical and cultural requirements of the market may impact on business ideas.

Provide 3 examples of ethical and cultural requirements

ANS. Examples of ethical and cultural requirements are as follow-

Transparency
Transparency involves accurately representing facts, telling a truth in its entirety and
communicating clearly and openly about everything a company does and says. It is the
foundation of a strong relationship with customers, which directly impacts the success
and stability of a company. The more candidness a company shows, the more the
public is likely to trust in its service, product or mission. This is especially true during
public relations crises when full disclosure is imperative to overcoming business issues.

Integrity

Sticking with a decision, especially when pressured to do otherwise, shows honor and
courage. Companies that do what they believe is morally right based on equality and
fairness can demonstrate strength and commendable character.

Trustworthiness

Companies that keep promises and fulfill commitments to their employees, business
partners and customers display their commitment to business ethics. Trustworthiness is
a monumental component to success in business because people typically like to work
with and buy from those they believe are dependable and principled.

9. Identify 3 new and emerging markets. Explain the features of each of them.

ANS.

10. What are the risks of expanding a business? Provide 3 examples of business
expansion risks and challenges.

ANS. The risks of business are real, otherwise everyone would grow their business. Risks fall
into many categories including: personal, business and competitive.

By acknowledging the risks, you can seek out solutions, learn from others who have
faced the same challenges, and gain confidence in forging on with your business
expansion strategies.

As you do look around for help from your employees, suppliers, partners and
customers. You may be surprised to find out how much support you really have!

The Case Against Growth: Managing Risk

1. Personal Risks: Stress, No Family Time, Loss of Control.

If you think that business expansion is not going to affect your loved ones, and your own
health and personal finances, and that they can be separated from the ongoing
pressures of growing your business – you are misinformed. Safeguard against poor
health by getting regular exercise, eating well and spending quality time (vs. quantity
time) with your family members.

Choose your business partners just as wisely as you choose you friends/family.
Bringing on business partners and signing covenants can feel to an entrepreneur like
they are losing control and independence. Would you like to own 50% of a multi-million
dollar business, or 100% of a $100,000 business? If you cannot grow without taking on
a new partner then the three questions to ask yourself when evaluating a potential
partnership’s worth are:

 Is it a good fit strategically?

 Is it a good fit operationally?

 Could you spend a week on a boat with this person(s)?

2. Business Risks: Instability, Ineffective Management, Financial Loss.

Business growth brings pressures to a system that may not have had the
time/experience to get geared up for increased production or services. New timings of
payables/receivables may create financial strain. Customers may feel underserved.
Employees may be uneasy about all the changes. The owner(s) and management may
not have the right skills. This is a good time for a soul-searching examination of
strengths and weaknesses. Do you have enough of the right stuff?

3. Competitive Risks: Unknown Markets, Aggressive Competitors, Unfamiliar

Terrain.

Growing is the next big challenge for a business owner – it’s exciting and new. That part
is familiar. Pushing your existing product into new markets, or new products into existing
markets will be unfamiliar and may have unanticipated results. Also as you push up
against bigger competitors, don’t be surprised if they fight back! Think about
outsourcing, bringing in temporary executive savvy in expansion, training your staff in
new technology/methodology or starting a new company with new equity, rather than
existing cash flow.

This is not an exhaustive list – your analysis will uncover many other risks particular to
your busienss. The next section will discuss the various expansion strategies,
addressing how to mitigate some of the risks while accentuating the rewards.

11. Explain how Labour demand changes with economic development (Approx.

40 words)
ANS. The labour market is a factor market – it provides a means by which
employers find the labour they need, whilst millions of individuals offer their
labour services in different jobs.

 Many factors influence how many people a business is willing and able
to take on. But we start with the most obvious – the wage rate or salary

 There is an inverse relationship between the demand for labour and the
wage rate that a business needs to pay as they take on more workers

 If the wage rate is high, it is more costly to hire extra employees

 When wages are lower, labour becomes relatively cheaper than for
example using capital inputs. A fall in the wage rate might create a
substitution effect and lead to an expansion in labour demand.

12. What is a labour force trend? (Approx. 20 words)

ANS. The labour force is often referred to as the ‘work force’ or the ‘active population’,
labour force trend refes to change in preferences of labour over a period of time.

13. Explain how movements in prices and changes in the availability of resources

can have a significant impact on the Australian market.

ANS. Movements in prices and changes in the availability of resources can have a
significant impact on the market.Price movements in a market such as Australia can be
quite volatile due to reliance on imports and other foreign trade issues (both imports and
exports).

14. Identify 5 trends and developments that should be reviewed.

ANS. trends and developments that should be reviewed includes-

1. The continuing distribution of organizations

2. The availability of enabling technologies and social collaboration tools

3. The coming shortage of knowledge workers

4. The demand for more work flexibility

5. Pressure for more sustainable organizations and workstyles