Project Management: The Market Influences for a Project Selection

Project Management is about getting a work done in an orderly and informed manner with optimal resources and budget. It has several Phases

Project Selection

Project Initiation

Project Planning

Project Design

Project Execution

Project Monitoring & Control

Project Closure

Project Selection Phase:

This phase can be characterised by two distinct attributes: The Market & Financial Analysis. In this article let's talk about the influences of the Market that has to be considered for a Project Selection using the Porter's Five Forces Theory

Threat of New Entrants:

Entry barriers are an important deciding factor in Selecting a Project. These barriers may come from many factors like Big Budget, Advanced Technology, Talent Crunch among others. On the other end ease of Entry can mean a bigger competition.

Bargaining Power of Customers:

Monopoly in Industry like the current Chip Manufacturing or Oligopoly like the Oil Industries do not have much to worry about the Bargaining Power of the Customers. However, the majority have to bear with the Customer Whims & Fancies. One has to be wary about this during the Selection of the Project.

Bargaining Power of Suppliers:

The analogy of Customers Bargaining Power works for Suppliers as well. A study of the Market on the availability of inputs in terms of Materials & Services will go a long way while evaluating a Project

Competitive Rivalry:

Competitors repeatedly attempt to make the ocean red like sharks fighting for their territorial integrity. Unfortunately it appears like Dog eat Dog when competitors try to cut corners and win orders at any cost. It is necessary to spend some time on this & understand the scenario. It is prudent to take an informed decision so that you do not use much of your time in managing this aspect in the Project Execution Stage

Threat of Substitutes:

Alternate Options for your Products / Services can hamper growth. It may lead to stagnation or deterioration. Survey this possibility given the current information. Consider future prospects. Obsolescence is another concern. In today's rapidly changing world, life time of any new launch or a running product / service is drastically coming down

While it may not be possible to consider every possible scenario, it pays to give each of the above consideration & weigh the pros and cons while narrowing down on the Project Selection

Look forward to this space where we will address the Financial Considerations for a Project Selection