THEORY NOTES

Q1: What is Market Assessment? Why is it important?

Market assessment evaluates if a product or business idea can succeed.

It helps identify customer needs, risks, and competition.

It guides decisions on entering a market or launching a product.

Without it, businesses may waste resources and lose money.

Q2: What are the main features of SWOT Analysis?

SWOT analyzes internal and external factors affecting business.

Strengths are internal advantages and resources.

Weaknesses are internal limitations or missing resources.

Opportunities are external chances for growth.

Threats are external risks or challenges.

Q3: Explain the strategies used in SWOT.

Use strengths to take advantage of opportunities.

Use strengths to reduce threats.

Improve weaknesses by using opportunities.

Eliminate weaknesses to avoid threats.

Q4: What is PEST Analysis and why is it used?

PEST studies external factors affecting business success.

Political factors include government laws and stability.

Economic factors include inflation and economic growth.

Social factors include culture and demographics.

Technological factors include innovations and new technology.

PEST helps businesses understand their environment and plan ahead.

Q5: What factors should be considered when naming a business?

The name should be easy to remember and say.

It should reflect the business’s nature or values.

It must be unique and different from competitors.

The name should be available as a website domain and on social media.

It must suit the target culture and customers.

It should allow the business to grow over time.

Q6: Explain Porter’s Five Forces briefly.

Rivalry means how strong the competition is.

New entrants show how easy it is for new businesses to join.

Supplier power is how much suppliers can influence prices.

Buyer power is how much customers can negotiate prices.

Substitutes are alternative products available to customers.

Q7: Differentiate between BMC, Lean Canvas, and Business Plan.

BMC gives a simple overview of business model parts.

Lean Canvas focuses on startup problems and solutions quickly.

Business Plan is a detailed document for planning and funding.

BMC and Lean Canvas are usually one page, Business Plan is longer.

Business Plan covers marketing, finance, and operations in detail.

Q8: What are the main requirements of market research?

Define clear goals for the research.

Collect accurate and relevant data.

Analyze customer needs and market trends.

Understand competitors and the environment.

Use reliable methods for collecting data.

Use findings to make informed decisions.

Q1: What is market assessment?

A: Market assessment is a thorough and objective evaluation to check if a new product, business idea, or investment is feasible. It involves
analyzing the market environment, including trends, competition, risks, and opportunities, along with the company’s strengths and
limitations.

Q2: Why is market assessment important?

A: Market assessment helps entrepreneurs understand if there is a real need or customer base for their product before investing. It also
reveals potential barriers, risks, and challenges that the business might face, allowing better planning and decision-making.

Q3: What are the benefits of market assessment?

A: It guides companies on where to allocate limited resources effectively. It also helps identify promising markets and opportunities that
can generate the best returns, reducing the risk of failure.

Q4: What are the consequences of weak market assessment?

A: Poor market assessment can lead to wasting valuable resources, missing good business opportunities, receiving low returns on
investment, and ultimately suffering financial losses.

Q5: How can market assessment be done systematically?

A: Entrepreneurs can use SWOT analysis to evaluate internal strengths and weaknesses, PEST analysis to examine external factors, and
Porter’s Five Forces to understand competition. These tools provide a comprehensive view of the market and business environment.

Q6: What does SWOT analysis stand for?

A: SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is a tool used to analyze both internal and external factors
affecting a business.

Q7: What are examples of strengths in SWOT?

A: Strengths include things like strong research and development, effective marketing skills, good business location, trained employees, a
good brand image, financial stability, innovative products, and strong business networks.

Q8: What are examples of weaknesses in SWOT?

A: Weaknesses may be poor financial health, high employee turnover, a weak brand image, low customer demand, poor product quality,
limited marketing skills, cash flow issues, or weak financial planning.

Q9: What are examples of opportunities in SWOT?

A: Opportunities can include new emerging markets, government support for startups, availability of seed funding or grants, crises that
create new business needs, supportive government policies, and few competitors.

Q10: What are examples of threats in SWOT?

A: Threats include social or political instability, strong competitors, low barriers to market entry, new tax laws, influx of cheap imported
products, and changing customer preferences.

Q11: How can strengths and opportunities be used together?

A: Businesses should use their internal strengths, such as skilled marketing or financial resources, to take advantage of external
opportunities like government grants or new markets. This helps maximize growth potential.

Q12: What is the purpose of the TOWS exercise?

A: TOWS is used to develop strategic plans by matching strengths, weaknesses, opportunities, and threats. It helps organizations decide
how to best use their resources and address challenges.

Q13: What does PEST analysis examine?

A: PEST analysis looks at Political, Economic, Social, and Technological factors outside the company that can influence business success or
failure.

Q14: Why is PEST analysis important?

A: It helps businesses understand the bigger external forces affecting their industry and market, especially when launching new products
or entering new markets, leading to more informed decisions.

Q15: What are political factors in PEST?

A: These include government policies, political stability, tax regulations, trade rules, labor laws, and government funding programs. These
can impact how a business operates.

Q16: What are economic factors in PEST?

A: Economic factors include inflation, growth rates, unemployment, interest rates, taxation, consumer income, and the cost of raw
materials, all of which affect business performance.

Q17: What are social factors in PEST?

A: Social factors cover demographics, cultural values, lifestyle trends, education levels, population changes, and social attitudes, which
influence consumer behavior and demand.

Q18: What are technological factors in PEST?

A: Technological factors involve new inventions, internet access, automation, innovation, government investment in technology, and laws
related to technology, affecting how products are made and sold.

Q19: How should PEST information be collected?

A: Information should be gathered from a wide range of sources or teams using tools like video calls, online surveys, and brainstorming
software to get a complete and up-to-date analysis.

Q: What is a Business Plan?

A written document (1 or more pages) outlining short- and long-term goals.

It includes sales targets, expense budgets, and growth strategies.
Useful for startups raising funds and for established businesses aiming to grow.

Types of Business Plans: Three (not specified in detail).

Audience:

• Internal: Owners, founders, employees

• External: Investors, lenders, customers, suppliers

Contents of a Business Plan:

• Title Page
• Executive Summary
• Business Concept and Industry
• Market Analysis and Competition
• Sales and Marketing Plan
• Management Plan
• Operating Plan
• Financial Plan
• Appendices and Exhibits

Q: What is Business Model Canvas (BMC)?

A visual tool developed by Alexander Osterwalder with 9 structural elements.

It helps identify potential risks and deficiencies in business models.
Useful for existing businesses to clarify their idea in a simple format.

Contents of BMC:

• Customer Segments
• Value Propositions
• Customer Relationships
• Key Partners
• Key Activities
• Key Resources
• Channels
• Cost Structure
• Revenue Streams

Q: What is Lean Canvas?

A 1-page startup-focused template created by Ash Maurya, adapted from BMC.

Helps deconstruct startup ideas into key assumptions.
Designed for entrepreneurs, startup founders, and product owners.
Difference from BMC:

• BMC is for existing businesses

• Lean Canvas is for startups

Contents of Lean Canvas:

• Problem
• Solution
• Customer Segments
• Unique Value Proposition
• Unfair Advantage
• Channels
• Key Metrics
• Cost Structure
• Revenue Stream