Chapter 15

Question 1

6 phases associated with venture analysis

Answer 1

1. Market analysis
2. Value analysis
3. Financial analysis
4. Operations analysis
5. Management competency analysis
6. Contingency plans or exit options

Question 2

Key Fatal Flaws

Answer 2

• inadequate pricing
• undercapitalization
• weak management competencies
• insufficient marketing research
• poor industry assessment
• absence of well-focused execution strategy

Question 3

four key metrics for market analysis

Answer 3

environment
industry
market fit
customer

Question 4

About fully understanding “market fit” and validating competitive advantage around which we can develop a positioning campaign

Answer 4

value analysis

Question 5

New Venture Financial Analysis =

Answer 5

demand and revenue model 
 \+ cost structure and key drivers 
 \+ capitalization well depth and length 
 \+ anticipated margins 
 \+ initial cash flow projections

Question 6

Assessing the revenue model of a new venture is really about validating the legitimacy of:

Answer 6

where revenue is going to come from,

and how it will be generated

Question 7

Two key benchmarks are:

Answer 7

point of cash flow positivity breakeven point

Question 8

three critical metrics in the capitalization well (assessing viability)

Answer 8

depth of capital need
length of capital burn
potential revenue flow to be tapped

Question 9

refers to a framework for assessing the full-capital requirements of a business venture

Answer 9

capitalization well

Question 10

is the situation where a company lacks the required funding to continue business activities

Answer 10

undercapitalization

Question 11

roof of the value chain

Answer 11

support activities

Question 12

foundation of the value chain

Answer 12

inbound logistics
operations
outbound logistics
marketing and sales
customer service

Question 13

management acumen assessment model (MERFS)

Answer 13

motivation
expertise
risk acceptance
focus
self belief

Question 14

refers to growth that comes from an organization’s existing business portfolio

Answer 14

organic growth

Question 15

refers to the process of acquiring another company or operation

Answer 15

acquisition

Question 16

steps of an acquisition

Answer 16

○ Identify the target
○ Assess the fit
○ Determine a price (valuation)
○ Make the purchase
○ Integrate the operation

Question 17

refers to maximization of productivity and efficiency through the combining of resources

Answer 17

operational synergies

Question 18

market/opportunity pyramid - the go or no go decision

Answer 18

can the management team make it happen?
is the business system aligned and properly structured?
are the market and financial characteristics strong enough to result in success?
is the customer fully understood?
is there a true market need and the timing is right?