V1 Flashcards
US Population
320 Million
Life Expectancy of an American
80 years
Number of US households
100 Million
Assuming even distribution, how many people per age group
4 Million
7 Core Questions To Ask about the Company
Profits and Revenues for last 3 years
Production Capabilities and Capacity
Product mix (and Costs/Margins)
Distribution Channels
Customer segmentation
Brand
What constitutes success?
9 Core questions to ask about the market?
Market size, growth rate, and trends
Major players and market share
Barriers to entry/exit
Industry drivers
Industry changes (M&A, technology)
Where is it in its lifecycle
Product differentiation
Distribution channels
Customer segmentation
Profit and Loss formula
E(P=R-C)M
Entering a new market- 4 steps
Questions about the company
Questions about the current and future market
Investigate whether entry makes good business sense
If entering, what is the best way to become a player (organically, M&A, JV/Alliance, Outsource)
Pricing strategies
Company Objective
Competitive analysis
Cost-based pricing
Price-based costing
Growth and Increasing Sales steps
Learn about the company
Investigate the industry
Rogers Adoption/Innovation Curve
Innovators - 2.5% Early Adopters - 13.5% Early Majority - 34% Late Majority - 34% Laggards - 16%
8 Ways to cut labor costs
Increase efficiency:
- Cross-train workers
- 4-10 hour days instead of 5-8 hour days
Reduce benefit expenses:
- Reduce 401k or 403b match
- Raise employee contribution to healthcare premiums
Restructure incentives:
-Convert workers into owners
Cut overtime
Contemplate layoffs
Pay decreases
8 Ways to cut production costs
Production Line:
- Invest in technology
- Consolidate production space (gain scale)
- Flexible production lines
- Outsource
Supplies:
- Reduce inventories
- Renegotiate with suppliers
- Consolidate suppliers
- Import parts
5 Ways to reduce finance costs
Get your money quicker:
-Have Customers pay sooner
Take advantage of economy:
- Refinance your debt
- Hedge currency rates
Sell nonessential assets
Redesign health insurance
If a product is in emerging growth stage…
Concentrate on R&D, competition, and pricing
If a product is in growth stage…
Concentrate on marketing and competition
If a product is in mature stage…
Focus on manufacturing, costs, and competition
If a product is in declining stage…
Define niche market, analyze competition’s play, or think exit strategy
M&A case structure
Company
Current Market Analysis
Due Diligence and Risks
Costs
Exit Strategies
World population
7 billion
