Post on 22-Dec-2015
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What to Do Before Your Business Plan Course
John W. MullinsLondon Business School
REE 2004
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The Problem: This Turkey Won’t Fly!
• Occurs for many student teams partway through the course
• Too late to turn back and write a plan for a better opportunity
• Students are faced with convincing your panel of judges why their turkey will fly (when really it won’t)
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The Solution• Create a preceding course to focus
on opportunity assessment and development– Market, industry, team dimensions– Deliverable: a feasibility study, based
on actual primary and secondary research
– Either conclusion is welcomed• Feed the best into the business
plan course
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The Genesis of the Course
“When a business with a reputation for poor
fundamentals meets a management team with a
reputation for brilliance, it’s the reputation of the former that
remains intact.”Warren Buffett
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Research Question
How do successful entrepreneurs (and investors,
too) assess market opportunities?
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Point of Confusion #1: The Market / Industry
Distinction
• What’s a market?• What’s an industry?• These are frequently confused!
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The Seven Domains of Attractive Opportunities Market Domains Industry Domains
Market Attractiveness Industry Attractiveness
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Point of Confusion #2:The Macro / Micro
Distinction
• Large and growing markets are important, but…
• Structurally attractive industries (in a five forces sense) are also important, but…
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The Seven Domains of Attractive Opportunities
Macro Level
Micro Level
Market Domains Industry Domains
Market Attractiveness
Target Segment Benefits and Attractiveness
Industry Attractiveness
Sustainable Advantage
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Point of Confusion #3:What’s Crucial about
Entrepreneurs and Their Teams…
• It’s not found on their CVs• Not simply about “chemistry” or
“character” or “entrepreneurial drive”
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The Seven Domains of
Attractive Opportunities Macro
Level
Micro Level
Market Domains Industry Domains
Mission, Ability toAspirations, Execute Propensity on CSFsfor Risk
Connectedness up and down Value Chain
Team Domains
Market Attractiveness
Target Segment Benefits and Attractiveness
Industry Attractiveness
Sustainable Advantage
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Putting the Seven Domains to Work
• No opportunity is perfect – all have significant question marks or negatives at the outset
• Thus, the opportunity development challenge:– Reshape: turn question marks or minuses
into pluses (different market, industry, or team)
– Mitigate: weaknesses offset with compensating strengths
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The Seven Domains…• Identify key weaknesses
– Questions to be answered• Suggest avenues for reshaping the
opportunity • Identify key strengths, jump-start
business planning– Crucial in telling the story to resource
providers• Integrate and bring to life material
seen (learned?) in the core
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A Final Note
• For the seven domains…– Scores are not additive: summing the
scores across the seven domains is meaningless
– Strong scores at the micro level can mitigate poor macro-level scores
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But don’t just take it from me…
“When a business with a reputation for poor
fundamentals meets a management team with a
reputation for brilliance, it’s the reputation of the former that
remains intact.”Warren Buffett
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If You Need a Textbook… The New Business Road Test
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To Download Chapter 1 for Your Business Plan Course:
www.london.edu/faculty/jwmullins