Screening of Project Idea

Micro & Macro Environment

Submitted To Submitted By
Dr Balbir Mangta Amit Chauhan
MBA 4th Sem.
6003
 Project Idea
A new project idea as a process of identification
of a project begins with an analytical survey of
the economy(also known as pre-investment
surveys). The surveys and the studies will give
us ideas.
 Monitoring of Environment
An entrepreneur or a firm systematically appraise
the environment and assess its competitive
abilities and also access its competitive abilities in
order to profitably exploit opportunities present
the environment. The key sectors of the
environment that are to be studies are
1. Macro Environment(Business Environment)
2. Micro Environment(Corporate Appraisal/
Environment)
 1. Macro Environment(Business
Environment)
In this environment the study of the competitors ability
and to increase the profitability. The impact of this
environment appraisal is to be make polices according
to the situation because the impact of this
environment is uncontrollable. The business
environment divided into six sectors as follow:
i. Economic Sector
ii. Government Sector
iii. Technological Sector
iv. Socio-Demographical Sector
v. Competitive Sector
vi. Supplier Sector
 i. Economic Sector
a) State of the economy
b) Overall rate of growth
c) Cyclical fluctuations
d) Inflation rate
e) Growth rate of primary, secondary and
territory sector
f) Growth rate of world economy
g) Balance of Payment
 ii. Government Sector
a) Industrial policy
b) Government programmes and projects
c) Tax structure
d) EXIM policy
e) Financing norms
f) Subsidies incentives and concessions
g) Monetary policy
 iii. Technological Sector
a) Emergence of new technologies
b) Access to technical know-how, foreign as
well as indigenous
 iv. Socio-demographic Sector
a) Population trends
b) Age shifts in population
c) Income distribution
d) Educational profile
e) Employment of women
f) Attitudes toward consumption and
investment
 v. Competition Sector
a) Number of firms in the industry and the
market share of the top few
b) Degree of homogeneity and differentiation
among the products
c) Entry barrier
d) Comparison with substitutes in term of
quality and price
e) Marketing polices and practices
 vi. Supplier Sector
a) Availability and cost of raw material
b) Availability and cost of energy
c) Availability and cost of capital
 2. Micro Environment(Corporate
Appraisal/ Environment)
It involves identification of corporate strengths
and weaknesses. The important aspects that
be considered as:
i. Marketing and Distribution
ii. Production and Operations
iii. Research and Development
iv. Corporate Resources and Personnel
v. Finance and Accounting
 i. Marketing and Distribution
a) Market Image
b) Product Line
c) Product Mix
d) Distribution Channels
e) Customer loyalty
f) Marketing & distribution costs
 ii. Production and Operations
a) Condition and capacity of plant and
machinery
b) Availability of raw material and power
c) Degree of vertical integration
d) Locational advantage
e) Cost structure
 iii. Research and Development
a) Research capabilities of the firm
b) Track record of new product developments
c) Laboratories and testing facilities
d) Coordination between research and
operations
iv. Corporate Resources and Personnel
a) Corporate image
b) Dynamism of top management
c) Relation with government and regulatory
agencies
d) State of industry relations
 v. Finance and Accounting
a) Financial leverage and borrowing capacity
b) Cost of capital
c) Tax structure
d) Relation with share holders and creditors
e) Accounting & control system
f) Cash flow and liquidity
 conclusion
The environment appraisal is important for the
effective or economic project planning. In the
environment screening the all the factor which
may effect the project all are considered and
analyze them. The project execution is a capital
expenditure so that it is important to analyze all
those factors which is effect the project. The huge
part of the profit to use for the project so the
environment factor will be the important for the
successful of project idea.