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Answering these questions (pick the categories which are most relevant to your project or
case) will help you better understand the problems areas you are assessing and will get
you thinking about more problem-oriented solutions.
The Customer
The Product
What differentiates this product from other similar products in the market?
-And, more importantly, how can your company increase product differentiation?
What are complementary goods (goods which are bought/used in conjunction with your
good – such as toothpaste and a toothbrush are complimentary goods)?
-Is there any way the company can piggy-back growth off of complements?
The Company
The Competition
What are the competitors best at/what are the others doing differently?
Does the company need to worry about new companies entering the market?
How will the merger help the firm achieve its strategic vision?
Does your firm have an effective leader? Does the merger partner have one?
-The new, combined firm will need this component to succeed. If both firms are
lacking strong leadership, then you will need to find someone new to lead the merged
firm
Capacity Change
Answer these questions when a company is considering adding capacity (such as building
a new factory, closing a location, or acquiring a direct competitor)
What are the trends in demand? (look at both the demand for your company as well as
demand in the general industry)
-Try breaking down the demand into different consumer segments to get a more
accurate view of these trends
What possibly event could cause demand to fall and how sharp would this affect be?
-Is the company willing to take the risk even in the face of a possible such event?
What technological innovations can you incorporate to make your expansion seamless?
What are the real, upfront costs of this expansion? (i.e. is this affordable right now?)
Have you explored the alternatives to changing capacity? (these include but are not
limited to outsourcing, sub-contracting, leasing)
! 9
Franchising a Business
Does the owner prefer the business or operations end of your company?
-If the owner prefers the operations end of the company, it can be hard to put
stores in someone else’s hands
Why would people want to become franchisees of your business instead of doing it
themselves?
-This doesn’t mean that the product has to be super-unique or exotic but there has
to be something unique about your process which makes it hard to replicate
A Profitability Framework