Consulting and Advisory Project for SMEs: A Guide for Engineers
2009 Contest
1. True or False, Comment:
a. “You do not need market research to evaluate my project for the manufacture of aluminum containers for canned foods, since all production is used in canning my own business.”
False. Market analysis is crucial for project evaluation. It defines demand and operating income, which are implicit investment costs.
b. “It is not commercially viable for a project facing a market dominated by one manufacturer to offer a lower price.”
False. The dominant producer’s price could be a barrier strategy. New producers should consider a product introduction and advertising strategy.
c. “A project with a positive return should be implemented immediately if sufficient resources are available.”
False. Besides economic factors, investor return and project payment capacity must be considered. Social factors, like community benefits and costs, are also important.
d. “The project’s offering size should be accepted only if demand clearly exceeds it.”
False. Consider the expected supply behavior and future competition. Analyze historical and present supply to predict future behavior with and without the product to avoid production shortfalls.
2.
a. Implications of Market Structure (Perfect Competition or Oligopoly) for Project Study
Perfect Competition: Many buyers and sellers, none influencing prices, and traders are fully informed. This allows accurate supply and demand projections, crucial for product placement.
Oligopoly: Significant entry and exit barriers, few companies with homogeneous or differentiated products. This makes it difficult to determine entry price, image investment, etc.
b. Impact of Price Elasticity of Soft Drinks (0.8) on Spending
A determinant of price elasticity of demand is the ease of substitution. Drinks generally have fewer substitutes and lower price elasticity. Thus, increasing the price will likely increase spending.
3. Project Outline for Consulting and Advisory Services to SMEs
This outlines a project offering consulting and advisory services to small and medium enterprises (SMEs). The goal is to provide a framework for potential investors to organize their operations and achieve profitability.
A. Project Topology
Define the types of projects based on objective and evaluation measure:
- Studies measuring project profitability (total investment).
- Studies measuring return on equity.
- Studies measuring the project’s capacity to meet debt obligations.
B. Investment Purpose
- New Business Creation:
- Modernization Project:
- Outsourcing (e.g., business process outsourcing, development plans, control tools, institutional projects, business formation).
- Internalization of service or product development.
- Equipment or service replacement.
- Expansion of operating levels.
- Abandonment of a production line.
C. Mission and Vision
Mission: Provide optimal administrative and financial solutions for maximizing investment and sustained growth in Chilean micro, small, and medium businesses.
Vision (2012): Become the leading provider of administrative and financial knowledge for Tolimense micro, small, and medium enterprises, with adequate infrastructure, modern management, and cutting-edge technology.