Frederick W Smith

Everything in place
Freight only airline 1960 Aviation sales problem

Serve a large segment cash

Venture capital start up $72 million March 12, 1973 6

April 17 186
Mid 1974 OPEC inflation

 Loss $1 million a month

$27 million in 2 yrs

Problem falcon jets Employee efforts legislation

Apr 12,1978
727 from ailing passenger airlines Biggest fleet

Awards
300000 employees & net income $1.5 billion

 Consumers Existing products & services

Distribution channels
Government Research & development

 Focus groups
Structured format

Brain storming
No structure problem statement No criticism Freewheeling encourage Quantity Combination & improvements encouraged

Problem inventory analysis

Focus on problems & generate idea

 Brainstorming Reverse brainstorming

Brainwriting
Gordon method not knowing the exact problem Checklist method

 Free association Forced relationships Collective notebook method Attribute listing Big dream approach Parameter analysis
Technology Observation Parameter identification Creative synthesis

Need analysis

Realization

 Customers too frequently use an airline to fly to a

destination only to find that their luggage is missing

EDUCATION

KNOWLEDGE OF MARKETS & CONSUMERS

EXPERIENCE

ENTREPRENEURIAL AWARENESS

OPPORTUNITY RECOGNITION

PERSONAL EXPERIENCE

WORK EXPERIENCE

NETWORKS

 Idea stage Concept stage

Product development stage

Test marketing stage Commercialization

 Ideas ability & Evaluation

Dimensions
Need analysis Process Design Cost estimation Financial analysis Impacts

Conclusion and recommendation

 Technical

Managerial
Economic & Financial Cultural

Political
Environmental Legal

 Technical knowledge Availability of market Financial strength Position of competition

Priority of products
Seasonal stability

 Restriction on imports Supply of raw materials

Availability of subsidy
Location advantage Licensing & Government policy

 Start-up plan Feasibility plan Internal plans

Operation plan or annual plan Strategic plan

Expansion plan New product plan

 Narration Goals and objective Products or Services

Ownership
Management & Staffing Marketing Financial statements

 Sole proprietor
Partnership Joint stock company

Cooperative enterprise

 Easy to start & wind up Low production costs Decision making Interaction & Contact

Flexible
Independent & Maintain secrecy

Disadvantages: Limited production

Limited skills Division of labour

Small income
Instability Competency

 Easy formation Larger resources

Decisions
Diversified skills Secrecy

 Interaction & Contact Scope for large scale production

Risk sharing
Unlimited liability

 Funds Limited liability

Large enterpriser
Spreading out risks Effective control

 Internal
Retained profit
Controlled working capital Sale of assets Savings

Stock reduction
Trade credit

External
Short term sources
Long term sources

 Time
Long term Short term Current term

Function
Operating budget Financial budget Master budget

Flexibility
Fixed Flexible

 Purpose:
Implications
Wasted efforts

Elements
Background information Investment Operating costs and income per activity General and maintenance cost

Preliminary estimation

 Nature of product & work

Tangible
Intangible Craft work Intellect works

Types of Entrepreneur
Explorer Coordinator

Driver
Administrator

 Analysing or Evaluating proposed design

Detailed analysis of company & operations

SWOT current & proposed practices Assist decision makers in making strategic decisions

Reasons

 Marketing feasibility Technical feasibility

Economic feasibility
Financial feasibility

 Potential size of market Aggregate demand

Share

 Situational analysis Specification of Objectives

Collect secondary information

Conduct of market survey
Census survey Market survey

 Characterization of the market

Demand & Consumption Break down of demand Price

Methods of distribution & sales promotion

Consumers Supply & competition Government policy

Demand forecasting
Market planning
Market situation

SWOT
Objective Strategy

 Selection of process Appropriate technology Scale of operations Raw material Project scheduling

 Systematic determination of merit, worth and

significance
Step by step process of collecting recording &

organizing information

 Pre process evaluation Ongoing project evaluation

Project completion evaluation

Post project evaluation

 Non Discount criteria

PBP
ARR

Discount criteria
NPV IRR PI