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Hello Ken,
I am having difficulty in answering stokeness question. The P3 part is fine but it come to performance measures,my answers are completely different from examiner and Bpp. Can you please help me sir.
Venture capitalists have a high appetite for risk and they realise that the types of business they finance might take years to make a profit. So any profit-related PM is unlikely to be relevant. Nevertheless VCs want an exit
So, if you were to put money into a small business to help it grow, say over a time period of 5 years, what PMs would you be looking for. I haven’t looked at the answer but I would be looking for:
Sales growth or customer growth – again maybe delayed a couple of years.
Success in developing new products and new markets eg number of products brought to market, number of new markets entered.If the money were to build a production facility, I would be interested in monitoring its progress.
In particular I would be interested in monitoring the company’s cash flow because it is likely to be negative for some time (that’s what the funds are for: expenditure) before becoming positive. There is a rick of running out of cash so the company has to display tight control over expenditure.
Thank you for your concise explanation. My answer is completely different! Its a shame 🙁
They are as follows:
1. Supplier power-no of successful secured options due to rareness and price of commodity.
2.threat of substitute-customer loyalty
3.new entrants-revunue from patents
4.existing competition- market share
5. Buyers power-switching cost compared to competitors.The focus of that part of the question is on venture capitalists’ interests and concerns.
Your points are valid to measure the strength of each of the 5 forces.
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