This sub-section covers Critical Issues. In general, these are found in the areas of Product Feasibility, Market Acceptance, Production, Partnership, and/or Business Fit. An adequate definition of Critical Issues determines the key elements of a Development Program. Critical Issues do not have to be "bad". They are merely critical to the candidate Venture.
What are the critical questions for continuing the analysis of the project?The development program for new ventures must focus on the critical questions and issues. These questions should be listed first and revised as issues are identified. It should be realized that the process of exploring for this information will likely change the focus of the business concept. During the early phase of business development such changes should be expected and encouraged. Few successful businesses were originally focused on products and markets that eventually were responsible for their success. |
Is it feasible to make this product or deliver the service?What information must be gathered to confirm or refute the feasibility of making and delivering the product or service that will meet customers' expectations? |
How well will the product meet customers' expectations?What information will confirm that the products, as conceived, will meet customers' expectations? |
How extensive is the product patent position?Will it give competitive advantage? The potential for basic, composition of matter, and application patents must be discussed. The relative strengths of patents are not easily assessed without court action, but estimates can be generated. The potential importance of adequate product patent protection should be covered. |
Do we have prototype products to show customers?At some point prototype products will need to be produced. The sooner the better. Describe the prototype products and how they will be produced. |
How do the customers tell us if they will purchase the product?How should we obtain potential customer input into the development process? If marketing research is needed, describe the resources that will be necessary. |
How can we determine if the market prefers the products and services?A concept test can be critical to verify the viability of the business concept. This involves some level of marketing research. Market research can run the range from "self-study" to in-depth interviews and "focus groups". Tests preformed by an outside resource, not directly connected with the venture, tend to improve credibility. |
What do the customers expect the products to do and what services do they expect from us?A procedure to obtain customer use information should be designed. |
Will the customer commit to purchasing the product if his expectations are met?Some "objective" means of obtaining a measure of customer commitment should be derived. |
How much will it cost to develop this market?How long will it take to establish the product in this market? |
What are the details of the process?Can it be optimized? |
What are the consistency and performance requirements for the products and services? |
How much will the product cost to produce?What is the required production investment? |
Can this process meet the quality and cost requirements within the time frame of this venture? |
How extensive is the process patent position?Will it give competitive advantage? The potential for patent protection for the process must be discussed. The relative strengths of patents are not easily assessed without court action, but estimates can be generated. The potential importance of adequate process patent protection should be covered. |
What are the requirements and conditions for a development partner?A development partner is a producer or processor who will manufacture the products or services in total or in part. The intent is to use outside resources for manufacture to reduce investment and costs and to secure specific manufacturing expertise. The types of arrangements may be as simple as toll production, where the firm uses a contractor to process materials. Or it may consist of a joint venture to produce the product. A key condition of the development partnership is that the firm maintains ownership of the product , either in part or totally, during the processing. |
Whom should we consider?The selection of potential development partners is usually complex. The conditions need to be identified as well as the candidates listed. |
Are they ready to make a commitment?Since the firm will rely on the development partner for production, a commitment is needed as soon as possible. The level of commitment should be identified. |
What is it going to cost?Since the development partner must be compensated for effort, the nature of that compensation should be noted. This includes any exclusivity that implied in the agreement. |
What are the requirements and conditions for a customer partner?A customer partner is a user of the products or services who is willing to work with us in its development. The intent is to work with him to test the product and verify its effectiveness and quality. The customer partner is intended to act as a source of market expertise and to help promote the product. |
Whom should we consider?The selection of potential customer partners is usually complex. The conditions need to be identified as well as the candidates listed. These conditions usually include the size of the customer and past working relationships. |
Are the Customer Partners ready to make a commitment?Since the firm will rely on the customer partner for testing and market information, a commitment is needed as soon as possible. The level of commitment should be identified. |
What is it going to cost?Since the customer partner must be compensated for effort, the nature of that compensation should be noted. This includes any exclusivity implied in the agreement. |
What are the requirements and conditions for internal partnerships?An internal partner consists of any group of an operating division that will cooperate in the development of this business. |
Whom should we consider?The selection of potential internal partners is usually complex. The conditions need to be identified as well as the candidates listed. |
What is the nature of their commitment? |
What is it going to cost?Since an internal partner must be compensated for their effort, the nature of that compensation should be noted. |
Are there any business acquisitions required?What are the specifications for the acquisition and the firm's requirements? Acquisitions are usually handled on a Departmental basis. An outline of the needs for the acquisition and the targeted requirements should be noted. In most cases, an acquisition is viewed as a potential assistance to the venture concept rather than critical to the venture concept. If an acquisition is critical, it should be clearly noted. |
What strengths and unique competitive advantages does the firm have to allow you to be successful?Not all potentially profitable businesses should be of interest to the firm. There should be some synergy between the firm's existing operations and the new venture concept to assure some competitive advantage to the firm. These need to be identified. |
What existing businesses could be impacted by this venture? |
Can the firm successfully run this type of business?The firm can not run every type of business. Some businesses fit the firm's type of operation better than others. Some assessment of similarity and synergy must obtained. |
Which the firm markets do you expect to exploit in developing this business?Common markets and existing marketing strengths can be a strong competitive advantage. How the existing marketing strengths will be exploited should be discussed. |
What existing the firm's customers could be affected by this venture? |
What production facility or processes do you expect to successfully utilize?If under-utilized production facilities are to be used, the nature of the usage and any necessary modifications should be discussed. The identity of the organization involved with the facility should be mentioned. |
What in house "know-how" will give you competitive advantage?"Know-how" including how to run the business, can be critical to the business. Include both technical and business expertise. |
What relationships possessed by the firm could be of help in this venture?Include supplier, customer, and distribution relationships. Do not overlook other possible sources of advantage including academics, the research community, and publications. |
What other relationships possessed by the firm should be considered in addressing this venture?Consider both internal and external relationships. |
How much is this business worth to the firm?The total worth of the business includes not only the financial opportunity but also some other strategic values. These may include: (1) the entry into previously unexploited markets or technology; (2) development of previously unsatisfactory business relationships; and (3) low risk exploitation of a new technology or business structure. |