What knowledge do you possess that can contribute to serving a market need within your industry of interest?
The knowledge that I possess to contribute to serving a market needs are to explore ideas that align with my educational and/or work experiences. To seek ideas that intersects my know-how, my interests, and my social capital. By considering new venture ideas that build on my existing knowledge, I can create favorable knowledge conditions for myself. I need to seek opportunities to build my knowledge of industries, markets, technologies etc. By partnering with co-founder/team members will bring complimentary knowledge and adds social capital for the venture.
What are the demand conditions in the market need discussed in prior question?
Three aspects of customer demand conditions need to be examined. They are magnitude of customer demand, rate of growth of that demand, and heterogeneity of that demand across customer segments
What is the lifecycle stage of industry and market that you are interested in entering?
Industry lifecycle examines the stages of development of an industry. They are young and emerging stage of industry, middle-aged, level, and predictable stage of industry, or old and declining stage of industry.
What complimentary assets are most critical in the above industry and market of interest?
Complimentary assets involve tangible and intangible resources. Tangible assets include money, equipment, real estate, etc. Intangible assets include knowledge, relationships, etc. Patents or brands may sit between the tangible and intangible categories.
Discuss the five competitive forces that determine industry profitability.
There are five competitive forces that determine industry profitability. They are rivalry determinants, determinants of buyer power, determinants of supplier power, entry barriers, and determinants of substitution threat. Rivalry determinants include industry growth, fixed costs, products differences, brand identity, switching costs, concentration and balance, diversity of competitors, and exit barriers. Determinants of buyer power in bargaining leverage aspect includes buyer concentration, buyer volume, buyer switching costs relative to firm switching costs, buyer information, ability to backward integrate, and substitute products. Determinants of buyer power in price sensitivity aspect include price/total purchases, product differences, brand identity, impact on quality and performance, buyer profits and decision makers’ incentives. Determinants of supplier power includes differentiation of inputs, switching costs of suppliers and firms in the industry, presence of substitute inputs, supplier concentration, importance of volume to supplier, cost relative to total purchases in the industry and impact of inputs on cost or differentiation. Entry barriers include economies of scale, proprietary product differences, brand identity, switching costs, capital requirements, access to distribution, absolute cost advantages, learning curve, and access to necessary inputs, proprietary processes, government policies, and expected retaliation. Determinants of substitution threat include relative price performance of substitutes, switching costs, and buyer propensity to substitute.