tool for identifying investment

Project management by Nitish Sain

1. Project Management Submitted To: Submitted By: Ms.Neetu Mahendru Nitish S aini BBA 4th

2. Tools For Identifying Investment Opportunities There are several useful tools that are helpful in identifying promising investment opportunities . Porter Model : Profit Potential of Industries Life Cycle Approach The Experience Curve

3. Porter 5forces Model It helps in analyzing profit potential of an industry depends on the combinded strength of the following five bacis competitive forces: Threat of new entrants Rivalry among existing firms Pressure from substitute products Bargaining power of buyers Bargaining power of sellers

4. Life cycle Approach There are four stages a product goes through during his life cycle each stage represents different investment and net profit value (a) Pioneering Stage – In this stage the technology and product is new, there is high competition and very few entrants survive this stage. (b) Rapid Growth Stage – This stage witnesses a significant expansion in sales and profit. (c) Maturity Stage – It marks developed industries with mature product and steady growth rate. (d) Decline Stage – Due to introduction of new products and changes in customer preference the industry incurs a decline in market share and profits.

5. Experience Curve Experience curve analyzes how cost per unit changes with respect to accumulated volume of production. Investment must be such that reduces costs