Internships and Academic Seminars

1333 16th Street, N.W.

Washington, D.C. 20036-2205
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www.twc.edu/info@twc.edu

Project Management & Development

Prof. Jorge Berges

Guiding Questions for Creating a Strategy

Homework: After reading the Guiding Questions for Creating Strategy text below, answer the following private or
public sector questions to the best of your knowledge. This will allow you to design a preliminary strategy or game
plan for your project. Then, define next steps that you may need to improve your strategy (research, identify and
meet with experts in DC, find best practices from around the world, etc).

Deadline: At the beginning of next class. Bring a hard copy.

First of all, review the brainstorming exercise we did during class. Are all your ideas there? Are there new ideas you
would like to incorporate? Now, choose one idea to develop further. That is the idea that you will be working on in the
coming weeks.

Now, read carefully the following section regarding the strategy for your project.

Strategy is, in a nutshell, the how-to plan for achieving your goals.

While there are many similarities between the public and private sector, there are a couple of differences that we
need to count for: first, the decision power of the final beneficiaries of the project, this is, the people who receive
the service or product. Private sector beneficiaries, or consumers, usually make the decision to purchase or access a
service and pay in exchange. In contrast, public sector projects are usually targeted to populations that are in great
need and usually lack decision power for choosing among different alternatives.

Second, the funding source. Private sector projects are financed with private funds; this is, money from the
corporation, financial loans, equity, savings, etc. These funds are expected to generate more money, and as
consequence to have a return over the investment. On the opposite side, public sector projects are traditionally
funded with public sector resources, tax payers’ money, and they are expected to generate a social return on
investment. We will deal with this next class.

Why is this distinction important to your project?

If you are designing a private sector project, your connection with the consumer will happen in a market and,
therefore, there will likely be other competitors offering similar services. This characteristic will require you to think
not only in the service or product you will create (manufacturing/production) and sell (marketing/sales), but also in
the best way to succeed among all other options available in the market. In summary, you will have to define your
competitive advantage or how you differentiate yourself from the competition.

Many of these questions might need some research. If you do not have all data at hand, make an effort to research
information online, from your work or, at least, with a guesstimate. You can also write down in your notes what you
need to do and visit later.

Answer the following questions in order to advance your project’s strategy. Examples and comments are provided in
blue ink.

TURN PAGE
PUBLIC SECTOR

If you are designing a project related to government agencies or programs, your project likely exists because of a gap
not filled by markets and, therefore, your recipients (target population) have limited options to satisfy their needs.
Think for a minute of school lunches; this program exists since not all parents can fully afford healthy options for
children and, therefore, there is a major social problem (obesity and other health problems related to malnutrition).
Therefore, the government creates programs to attack this issue.

Is there a market for school lunches? Not necessarily, unless you are the supplier! The government will choose the
best, or most cost-effective, alternative to deliver this service, but it does not directly compete with other
governments for lunches.

So, what are the questions you need to ask for defining your strategy in the public sector?

Problem
What is the problem you are attacking and its magnitude? I hope you have this from homework 2!
1.

The size of the problem is critical for moving your project forward. If the problem you have identified cannot catch
the attention of your government, then it will be very likely tabled for future programs.

For example, a well-formulated problem would be:

1) Low level of education in the state, since 45% of the student body fails to reach national minimum standards in
reading and math.
2) A waste of US$1 MM a year in the production of apples in the state of Queretaro due to the lack of access to
markets, technology and training.

If you can persuade key decision makers that your problem is important and that it requires critical action, then you
are half way of the approval.

Program or Service
2. What is the service you are offering?
3. How would it work? What process would people need to follow to receive the service or benefit?

Example

Imagine that you would like to create a service for providing shelter to homeless people. Then the service would be to
provide safe, free shelter options for people who lack a place to sleep overnight. For this purpose, homeless people
will have to register directly every afternoon at the suggested location and leave by 7am in the morning. Space is
limited and the shelter will work on a first-come-first basis.

Another example would be the provision of food stamps to people who have an income less than $2,000 pesos per
month. How would it work?

All potential beneficiaries will have to fill out a form in a special office of the Minister of Social Development and
present an official ID. After the revision of the documents, food stamps with a maximum value of $500 pesos will be
assigned to approved beneficiaries. Those food stamps will only be accepted in grocery stores.

Beneficiaries
4. Who is your target population? This is, who would be receiving this service?
5. Where are they located?
6. What demographic and socioeconomic characteristics they have?
7. Could there be resistance to receiving your service? If so, how would you manage it?

Example

It is estimated that there are approximately 200,000 families that possess a monthly income less that $2,000 pesos per
month. This program is focused on helping these citizens to meet their nutritional and food sustainability needs.
According to INEGI, most of these citizens are located in the following municipalities:

Project Design and Management

Prof. Jorge Berges
Governor’s Program at The Washington Center for Internships and Academic Seminar
• Queretaro, San Juan del Rio, Jalpan?
• Hidalgo, Pachuca, Tulancingo?

Most of these people are unemployed or work in the informal sector mainly in areas related to construction,
commerce and services. Given the fact that they are barely covering their expenses, it is not foreseen that these
people will resist the food stamp program. However, the geographic dispersion may require a mobile office (SUV) to
receive applications.

Logistics
8. What is your suggested way to deliver this service? This is, how are you reaching out your target population?

If your project services remote populations located in the mountains, your delivery would be totally different than in
urban populations. Or, for example, senior citizens might be more difficult to target using technology (Facebook) than
teenagers.

Example

For the citizens located in Santiago de Querétaro, they will visit the offices at the Minister of Social Development. For
other municipalities, the program will be managed locally. Then, Stage Government will consolidate all information
and send food stamps (coupons) directly to each beneficiary. Agreements with main grocery stores will have to be
coordinated for stamps acceptance. Grocery Stores will have to submit all stamps to the Minister of Social
Development who will reimburse the store by bank transference in less than 30 days.

M&E
9. How are you going to measure the effectiveness of the program? Think of targets more than a process. For
example, increasing literacy in schools by 10% in the coming 5 years or distributing 1,000,000 vaccines by 2013 in
the region of Wonderland.

Example

The goal of this program is to assist 100,000 people per year that live under $2,000 pesos per month, and to improve
their nutrition and health. The program will be measured by the enroll people and the amount of coupons redeemed
by the end of the year. In order to assess the nutritional value of the program, grocery stores will keep an electronic
record of products bought with the coupons.

Or,

This program will be conditioned on regular medical check ups and school attendance. Then, the nutritional impact
will be evaluated with a random sample of all medical registries. In order to facilitate data gathering, Social Security
Hospitals will be provided with the right technology.

Financial
10. Does your ministry currently have budget for this project? If not, how would you fund it?

Example

A) The project will be submitted for Congress and budget approval in December 2013.
B) The Government of Queretaro/Hidalgo would like to use a combination of monetary support using X program from
SEDESOL and state funds.

The idea here is twofold: to have a sense of the cost of the program and identified different potential funding
sources. (We will estimate the cost of the program in the coming classes)

This preliminary research will allow you to articulate your strategy. Similar to the private sector, you will be
constrained by financial and human resources that you will have to integrate into your project as well. The former
issue, financing, is critical in the public sector since resources are much more limited than in the private sector.
Additionally, you might want to consider political aspects to your project such as electoral cycles, the current
government agenda (state development plan) and key stakeholders.

Project Design and Management

Prof. Jorge Berges
Governor’s Program at The Washington Center for Internships and Academic Seminar
FOR PRIVATE SECTOR PROJECTS

Market opportunity
1. What is the market opportunity? Try to find a dimension/magnitude.

Example

The market for consulting services in Mexico or my state is valued at US$50 MM.
The meat market in Queretaro sells around US$100 MM or 400 tons a year.

Defining the magnitude is important since it will give you a sense of where you are standing. Additionally, you might
also want to set a goal in terms of market participation (market share).

Product or Service
2. What is the final product or service you are offering? Write a brief description including product characteristics.

Example

- The product I will commercialize is glass cups (vasos) made of recycled bottles. These cups will be trendy and offer a
green alternative to current offerings.
- I will offer consulting services focused on environmental public policy, including the following business lines:

a) Public Policy Advocacy

b) Policy Analysis and Program Evaluation
c) Community Based projects

Please note that, ideally, you should have market research proving that your product fits consumers’ interests and
likes. If you do not, at least you should have a clear idea of why they are going to buy your product or service, what
consumer need you are fulfilling with it.

3. What is your suggested price? (I know, this is tough but you should define a guesstimate at least!)

Example

Following with the example of the glass cups, let’s say that the price per unit is $10 Mexican Pesos. This price should
be in accordance to different factors: market price and the purchasing power of the consumer I am targeting.

In the example of consulting, the most prevalent way to charge for your services is cost per hour and this price varies
depending on the industry, person offering the service, and specialization. Price ranges from US$50 to U$500 based on
service scope.

Consumer/Market
4. Who is your target market? This is, who would be the consumer buying your service or product?
5. Where are they located?
6. What other demographic characteristics do I know? This is, age, gender and socioeconomic level.

Example

It is critical for your project to define who will be buying your products and services. Lets say that I want to target my
hip glass cups to young consumers located in Queretaro. You can even describe them in terms of their attitudes and
habits. So, I would write:

My target is young people between 18 and 25 years old who live in the city of Queretaro from mid to upper class (what
you call in marketing socio economic level or SEL A/B/C). These people are attending universities and like to visit bars
and pubs in the area. They are avid consumers of electronic devices and social network platforms and have limited
disposable budget.

An important data point here is “how many”. You can even check INEGI and find out that there are 150,000 students
that meet your target market definition. This is critical since it will help you to estimate potential sales (the famous Q
in the equation Sales = Quantity X Price)

The more you know, the easier will be for you to define how to approach them!

Project Design and Management

Prof. Jorge Berges
Governor’s Program at The Washington Center for Internships and Academic Seminar
Market
7. How big is the market you are participating in or are trying to break into?
8. Who are the main competitors and what are they offering?
9. How do they distribute their services? This is the supply chain of the industry.

Example

It is very different to participate in the energy drink market than in the aerospace industry or the public sector. To
know the level of competition in each market and the forces driving it is essential to understand what you will have to
do to outperform your competitors. For this part, list the main competitors in the industry and, if possible, how big
they are and the main products they manufacture. For example, in the glass cup industry:

The competition is medium and large glass manufacturers, but with low product differentiation. A list of competitors
can be found as follows:

Empresa Ventas Mercado Producto

A US$100 MM Nacional Vasos de cristal con distintos modelos y
diseños, vajillas, etc.
B US$1 MM Queretaro Vasos de cristal, copas de vino, caballitos
C US$ 3 MM Nacional Vasos

The more you know about your competition, the better you prepare to attack them or….the easier you can find a
growing niche!

If you are familiar with the 5 Forces of Porter and SWOT Analysis, you can think of using those models (not required
for this homework though!)

Sales & Logistics

10. How would you put your product into the consumer hands? This is linked to your plan for distributing and selling
your product.

Example

This question relates to how you are going to distribute and sell your services. In the case of glass cups, you may want
to sell directly to bigger retailers like Superama or WalMart. Or, you may prefer to sell to bars since that is where your
potential customers are, or approach university cafeterias. The important part here is that for each alternative, you
need to think on who is going to sale (can be you or even a small team you are going to hire) and what you need
(marketing material, a van, etc.)

It would be also convenient to think in marketing activities such as the creation of a website, company image,
promotional material or even a logo. For example, in the case of the glass cups industry, I would create a website and
link it to Facebook groups since my consumers are avid users of this tools. You can even think in creating promotions
like recycle your bottles with us and get a glass for free or 50% off, etc. While you do this, think of the costs you may
incur in this activity since it will be helpful for the financial analysis.

Financial
11. Do you currently have funds for investing in this project? If not, how are you planning to obtain the initial
investment?

Example

We will see more about this in the coming classes, but the idea is to know if you are looking for investors, bank
credits, investing your own money, etc. Do you have an idea if there is any government program that can provide
some financial support, subsidies or tax credit?

In the case of the glass cups, you can say that the initial investment will come from a combination of partners’ money
and bank credit as follows:

Partners’ investment 60%

Bank Credit 40%

The total estimated investment is $1 million Mexican Pesos.

Project Design and Management
Prof. Jorge Berges
Governor’s Program at The Washington Center for Internships and Academic Seminar
These questions constitute preliminary research that will allow you to formulate your strategy. Once you know your
industry, competition and supply chain, you can determine your best plan to achieve your project’s goals. Of course,
all these questions have to be linked to your project’s goals and organization’s mission.

Good luck!

Project Design and Management

Prof. Jorge Berges
Governor’s Program at The Washington Center for Internships and Academic Seminar