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Investment Opportunity Identification Tools

This document outlines several tools for identifying promising investment opportunities: the Porter model analyzes the profit potential of industries; the life cycle approach examines the four stages a product goes through; and the experience curve analyzes how costs change with accumulated production volume. The Porter model considers threats from new entrants and substitutes as well as supplier and buyer bargaining power. The life cycle approach consists of pioneering, rapid growth, maturity, and decline stages.

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Lara Camille Celestial
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© © All Rights Reserved
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Download as PPTX, PDF, TXT or read online on Scribd

Topics covered

  • Cost per Unit,
  • Rapid Growth Stage,
  • Substitute Products,
  • Strategic Planning,
  • Market Share,
  • Sector Analysis,
  • Investment Opportunities,
  • Investment Portfolio,
  • Customer Preference,
  • Market Positioning
45 views5 pages

Investment Opportunity Identification Tools

This document outlines several tools for identifying promising investment opportunities: the Porter model analyzes the profit potential of industries; the life cycle approach examines the four stages a product goes through; and the experience curve analyzes how costs change with accumulated production volume. The Porter model considers threats from new entrants and substitutes as well as supplier and buyer bargaining power. The life cycle approach consists of pioneering, rapid growth, maturity, and decline stages.

Uploaded by

Lara Camille Celestial
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Topics covered

  • Cost per Unit,
  • Rapid Growth Stage,
  • Substitute Products,
  • Strategic Planning,
  • Market Share,
  • Sector Analysis,
  • Investment Opportunities,
  • Investment Portfolio,
  • Customer Preference,
  • Market Positioning

POTENTIAL

INVESTMENT
C

OPPORTUNITIES
TOOLS FOR IDENTIFYING
INVESTMENT OPPORTUNITIES
There are several useful tools that are helpful in
identifying promising investment opportunities:
1. Porter Model: Profit Potential of Industries
2. Life Cycle Approach
3. The Experience Curve
PORTER 5 FORCES MODEL
1.Threat of new entrants
2.Rivalry among existing firms
3.Pressure from substitute products
4.Bargaining power of buyers
5.Bargaining power of sellers
EXPERIENCE CURVE
Experience curve analyzes how cost per unit changes
with respect to accumulated volume of production.
Investment must be such that reduces costs.
LIFE CYCLE APPROACH
There are four stages a product goes through during its life cycle,
each stage represents different investment and net profit value.

1. Pioneering Stage – In this stage, the technology and product is new,


there is high competition and very few entrants survive this stage.
2. Rapid Growth Stage – This stage witnesses a significant expansion in
sales and profit.
3. Maturity Stage- It marks developed industries with mature product
and steady growth rate
4. Decline Stage – Due to introduction of new products and changes in
customer preference, the industry incurs a decline in market share and
profits.

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