Market environment | EPFL Graph Search

Market environment and business environment are marketing terms that refer to factors and forces that affect a firm's ability to build and maintain successful customer relationships. The business environment has been defined as "the totality of physical and social factors that are taken directly into consideration in the decision-making behaviour of individuals in the organisation." The three levels of the environment are as follows: #Internal environment – the internal elements of the organisation used to create, communicate and deliver market offerings. #External micro environment – Local forces that affect its ability to serve its customers. #External macro environment – larger societal forces that affect the survival of the organisation, including the demographic environment, the political environment, the cultural environment, the natural environment, the technological environment and the economic environment. The analysis of the macro marketing environment is t

Assessment and valuation of high growth companies

Patrik Frei

Valuation is a key topic in the financing and development of high growth companies. The goal of this study is to bridge the existing gap between the assessment of a company and the financial valuation. Many models exist to capture soft factors, and many more studies have been conducted to understand financial valuation models. In this study, the first step is to develop an assessment framework to capture the value drivers for high growth companies. Based on literature research, an empirical study with 52 valuations, and an iterative process this assessment framework has been built. It contains the following three main factors: Management Market environment Product, Sciences & Technology Each of these main criteria contain a number of sub-criteria shown in Figure 1. For each criterion, a rating between 1 and 6 is given with a specific scale that can be implemented in practice for high growth companies. Even though every company is different, the provided framework allows a systematic and transparent assessment of a high growth company. The proposed valuation methods are specifically targeted for high growth companies and include operational based methods such as discounted cash flow and option pricing, as well as relative methods such as the market comparable and comparable deal methods. Some others, such as the venture capital method, are also a combination of an operational and relative approach. The methodical assessment framework enables a link to be made with the financial valuation models to obtain a consistent and comprehensive assessment and valuation approach for high growth companies. The link is made by splitting up the discount rate into different premiums and by introducing a calculation schema. The assessment framework and its criteria have been tested in an empirical study to find correlations between the success of a company and the provided rating/framework. With the available sample of 25 valuations, this correlation could be shown for the market environment and the product, science & technology. For the management factor, it was not possible to show a statistical significance, even though practical experience had shown that management is a key factor. A main reason why no statistical significance was shown could be that the management team can be changed very quickly. Assessment and valuation of high growth companies 2 Thus, the assessment and valuation is a done at a specific moment in time but did not capture the development of the management team. However, in conclusion, the assessment and valuation is still an art. The proposed framework provides a roadmap to becoming an artist in this field and should serve as a practical guideline.

EPFL2005

Compatibility modeling to support opportunity analysis in new product development

Julie Hohenegger

The general context of this Ph.D. dissertation is the new product development (NPD) which is the process for transforming an opportunity that is a business or technology gap in the current situation into a product available for sale. This Ph.D. dissertation focuses on the opportunity analysis in NPD. Therefore, a framework to support opportunity analyses is developed. The framework is structured in two parts: the information search and the modeling of compatibility. Opportunity analyses require a systematic approach to obtain all the information related to the identified opportunity, as well as an approach to determine whether or not this opportunity is compatible with respect to the different attributes/criteria representing the product development context. The state of the art review reveals that such approaches are not available in the published literature. Therefore, the objective of this research is to develop a comprehensive framework comprising an information search approach and a compatibility modeling approach to respond to these needs. The early phases of NPD are characterized by uncertainty that corresponds to the difference between the amount of information required to perform a task and the available amount of information. Uncertainty may have serious consequences on NPD, resulting in the worst case in a project failure. Therefore, information is crucial for the product development process. The information search approach developed in this Ph.D. dissertation allows the reduction of this uncertainty. This approach comprises four levels. The first level comprises the activities involved in NPD, such as market analysis and manufacturing. The second level proposes a classification of the different types of information required during the product development process: product-, process-, resource- and context-related. The third level represents the different sources where each type of information can be found. Two main classes are identified: the first one comprises the company departments such as marketing, and manufacturing, while the second class contains the sources from the external environment of the company, such as suppliers, customers, competitors, research communities, and governmental and non governmental organizations. The fourth level contains different methods of collecting information. Two main classes are distinguished: meetings- and documents-related. The links between the different levels are established on the basis of a thorough review of the related literature. Once the NPD activities associated with the identified opportunity are determined, the related information types, the sources where they can be found and the methods for their collections can be easily deduced from the information search approach. The compatibility modeling approach aims at evaluating the compatibility relationships for pairs of alternatives. Two types of compatibility can be distinguished: hard compatibility and soft compatibility. Hard compatibility corresponds to the notion of matching (i.e. the possibility that two alternatives coexist in a specific product development context) and is evaluated with respect to hard attributes/criteria related to the basic laws of nature or to the technical possibilities. Soft compatibility corresponds to the notion of non-degradation (i.e. the shift from a situation where the two alternatives are considered individually to a situation where they are considered together does not induce a degradation in a specific product development context) and is evaluated with respect to soft attributes/criteria such as development cost, and lead time. The core concept of the compatibility modeling approach is the compatibility structure. The crisp compatibility structure is a quadruplet of crisp relations M, C, I, and J, called mutual compatibility, strict incompatibility, mutual incompatibility and mutual incomparability respectively that satisfy a certain number of conditions. The relations M, C, C-1 and I correspond to four different situations: no degradation – no degradation, no degradation – degradation, degradation – no degradation, and degradation – degradation respectively. J corresponds to the situation where the alternatives cannot be compared using one of the relations M, C, C-1 or I. For each attribute/criterion, partial compatibility structures without incomparability are constructed from the impact that an alternative exerts on another and vice-versa. Then, relations characterizing the partial structures are aggregated into a global relation that takes into account all the attributes/criteria. By their nature, crisp compatibility structures cannot express degrees of mutual compatibility, strict incompatibility, mutual incompatibility or mutual incomparability, and are consequently too constraining in practice. Therefore, the crisp compatibility structures are meticulously extended to the case of fuzzy binary relations. A case study from the Swiss company Laurastar illustrates the framework that supports the opportunity analysis. This case study investigates the possibility to collaborate with new suppliers located in Bucharest and Hong-Kong. The compatibility between alternatives related to the supply chain activity is evaluated with respect to the various attributes/criteria.

EPFL2007