ENT exam 1

difference between entrepreneurial ventures and small businesses

Schumpeter described entrepreneurs as equilibrium disrupters who introduce new products and processes that change the way we do things, while small-business owners typically operate a business to make a living.Footnote Examples of small businesses are small shops, restaurants, and professional service businesses. They form what has been called the economic core.Footnote In some cases, they're known as lifestyle businesses or "mom-and-pops," not only because they tend to stay small and geographically bound, but more because their owners make a conscious decision to remain small. As a result, they tend to be slow growing and often replicate similar businesses already in the market.

benefits to society from entrepreneurial process

This complex entrepreneurial process provides many benefits to society. Chief among these benefits are economic growth, new industry formation, and job creation.

Developing and Testing Hypotheses

This iterative process of hypothesize, design an experiment, test the hypothesis, and make any changes to the business model as a result is an excellent way to make sure that what you are offering has a chance of being successful.

Entrepreneurs and New Product Design and Development

Product design is defined as the activity that transforms a set of requirements into a format that brings all the elements into an integrated whole or system The design of a product is critical because it determines the features and performance, reliability, price, and appeal to the customer. More importantly, perhaps, design determines cost—in fact, as much as 80 percent of the final cost. Today design is affected by the fact that technology has a much shorter product life cycles. A product life cycle is analogous to an industry life cycle, with periods of new product development, market introduction, growth, maturity, and decline. Consequently, companies must always be researching and developing new products and improving on existing ones to stay ahead of the competition.

disruption (trend)

Some technologies will exponentially transform the way things are done. For example, we are seeing advances in synthetic biology and genomics using technologies like CRISPR, which enables editing of and making changes to the genome of living cells. Soon we may be able to correct for genes that give someone a higher chance for, say, Alzheimer's disease. Another area of disruption that will lead to new opportunities is quantum computers, which are enormously powerful machines that process information differently from the computer you're currently using. They can untangle complex structures and potentially enable us to discover new medicines and materials.

Constructing a Business Process Map

To identify accurately the resources required to start the venture, it's important to understand all the activities and processes in the business—in other words, to know exactly how the business works. This is best accomplished by creating a process map that details how information flows through the business. Having such a map on hand makes it much easier to define the operations, information flow, and resource requirements of the business. Then begin making lists of tasks, equipment, and people needed to complete a particular process or activity. This information will be useful for figuring expenses for financial projections and for determining what kind of personnel will have to be hired to perform these tasks. A process map is a great tool for looking at how your business works so that you can better estimate the resources you will absolutely need and those that can potentially wait until the company is on firmer ground.

Intelligent technology (AI) (trend)

Artificial intelligence (AI) as a technology has been around a long time, but today its potential is beginning to be fully realized. It is arguably the most important platform technology today.Footnote AI is about machine-learning solutions targeted toward completing a specific task such as driving a self-driving car in a controlled environment. In general, AI augments human decision making and enables us to take advantage of skills like facial recognition, diagnostics, and many other tasks that can be automated and executed faster and more reliably than a human could do.

Factor-driven economies

Factor-driven economies rely on unskilled labor and the extraction of natural resources for growth. Here businesses are normally created out of necessity so these countries tend to have very high entrepreneurial activity rates relative to other types of economies. Examples are India, Zambia, Iran, and the Russian Federation. Early-stage entrepreneurial activity rates are generally below 15 percent.

major myths surrounding entrepreneurs

1. One false assumption about entrepreneurship is that it takes a lot of money to start a business 2. it takes a great idea--Usually it's not the idea but the execution plan that makes the business a success. 3. bigger risk = bigger reward. In fact, investors expect entrepreneurs to do what it takes to reduce the risk for them such as testing the market, acquiring the first customer, and investing some of their own capital in the business; and no one expects the business to be worth less because risk was reduced. 4. A Business Plan Is Required for Success 5. its for the young and reckless-- today the ages of entrepreneurs are fairly evenly distributed across all the decades 6. it cant be taught-- There is a lot about entrepreneurship that can be taught, including specific skills and behaviors.

your launch strategy should have several goals.

1. To reflect the needs of your customers with respect to the solution, the price, and how it is delivered. 2. To reach the best first customers—the ones who need their problem solved the most and are ready to pay for it. 3. To have in place the funding needed to reach positive cash flow. 4. To reduce as much risk as possible.

how to avoid the mistake of rushing to judgment on the best ideas:

1. Use the principle of affirmative judgment, which is simply looking for the strengths or positive aspects of a problem first.Footnote In other words, keep the criticism at bay until all the positives are articulated. 2. Use a set of predefined criteria to establish standards for the selection of the best problem definition. Some examples include: - Does the problem have an identifiable customer in a large market? - Does the customer have a significant pain or need that you can solve? - Can you build an inexpensive prototype to test the idea? 3. Don't come to conclusions too quickly, especially if they are based solely on your personal experience. It will likely be the wrong conclusion.

An effective problem statement has four components:

1. a "how" question, 2. an answer to who is responsible for dealing with the problem, 3. an action verb, which represents the positive course of action anticipated, and 4. the target or desired outcome. the final problem statement contains all these elements: How can we (the team) speed up (action) the product development process so we can get new products to the customer more quickly (desired outcome)?

identifying the competition-- three types of competitors for a product or service:

1. direct: Your direct competitors are those businesses that serve the same customer needs with the same types of resources. 2. indirect or substitute: Indirect competitors, by contrast, serve the same customer needs but with different resources as in substitute products, services, or distribution channels. 3. emerging or potential: Potential or emerging competitors are those that are not currently serving the same customer needs but have the resources to quickly move into that space and compete

industry life cycle

1. emerging 2. growing 3. established 4. disruption (decline) 5. new life The earliest stage of an industry is a time of rapid innovation and change as young firms struggle to become the industry standard-bearers with their technology. As these entrepreneurial firms achieve noticeable levels of success, more and more firms desiring to capitalize on the potential for success enter the industry. As the industry grows, it generally becomes more fragmented as a result of so many firms competing for position. Then, at some point consolidation begins to occur as the stronger firms begin to acquire the smaller firms and the weaker firms die out. Eventually, the number of firms in the industry stabilizes and the firms mature. If innovation in the industry ceases to occur, the industry output may actually begin to decline. However, if new, disruptive technology is introduced, the industry may now have a new platform on which to innovate and grow again.

Preparing to become an entrepreneur (steps)

1. find a mentor 2. Build a Professional Network 3. Learn About Entrepreneurs 4. Understand your Personality and Business Preferences 5. Improve or Acquire Critical Skills 6. Study an Industry

2018 entrepreneurial trends

1. intelligent tech (AI) 2. digital (immersive experiences, digital twins) 3. disruption

six factors that serve as barriers to people becoming self-employed as entrepreneurs:

1. lack of confidence, 2. financial needs, 3. startup logistics, 4. personal or family issues, 5. time constraints, and 6. lack of skills.

Threat from Substitutes

A new venture must compete not only with products and services in its own industry but also with logical substitutes that other industries bring to the market. Generally, these substitute products and services accomplish the same basic function in a different way or at a different price. The threat from substitute products is more likely to occur where firms in other industries are earning high profits at better prices than can be achieved in the new venture's industry.

how do Entrepreneurs Spur Economic Growth?

Early economists recognized that technology is the primary force behind rising standards of livingFootnote and that technological innovation would determine the success of nations in the future. Technological change happens when an entrepreneur identifies: 1.New customer segments that appear to be emerging 2.New customer needs 3.Existing customer needs that have not been satisfied 4.New ways of manufacturing and distributing products and services. Identifying these needs offers the opportunity to invent new technology solutions that change the way we do things or to improve on existing products, services, and business models.

Efficiency-driven economies

Efficiency-driven economies are those growing and in need of improving their production processes and quality of goods produced. Examples are Argentina, Egypt, Croatia, and South Africa, although the highest entrepreneurial activity rates were found in Ecuador at 33 percent.

how do entrepreneurs create new jobs?

Entrepreneurial ventures are responsible for job creation that is disproportionate to the net total new jobs created in the United States over the past 25 years. in all, 62 percent of net new jobs come from small businesses; small businesses comprise 99.9 percent of all businesses. that the vast majority of net new jobs created by the small business sector are created by a few rapidly growing young firms called gazelles or high-impact businesses. These young businesses generally have sales that double over a four-year period with employment growth of two or more times over the same period

return on investment (ROI)

Entrepreneurs measure their return on investment (ROI) by dividing net profit by the cost of the investment and multiplying by 100 to get a percentage. Some industries have strong forces working against them so ROI is relatively small. An example is the airline industry whose ROI is in single digits. Other industries have more benign forces affecting them that enable higher returns. The software and pharmaceutical industries enjoy double-digit returns.

reasons for new business failure:

Entrepreneurs often start businesses with a solution looking for a problem. In other words, they haven't identified a real need in the market with customers willing to pay for a solution, The solution is not necessarily unique or compelling. In other words, it is often a "me-too" solution that does not offer anything different from what is already in the market. Furthermore, entrepreneurs often do not communicate the value proposition effectively to the customer, and/or Entrepreneurs often haven't identified and tested a business model that actually works. But beyond these factors, young firms have a higher chance of failure because they have to divert their scarce resources away from the critical operations of the company in order to train employees, develop systems and controls, and establish strategic partnerships.

overview of porters 5 forces

For years, the work of Michael Porter has provided a way of effectively looking at the structure of an industry and a company's competitive strength and positioning relative to that industry and to the markets it serves. Porter's basic premise is that sustaining high performance levels requires a well-thought-out strategy and implementation plan based on knowledge of the way the industry works and the attractiveness of markets. Porter asserts that there are five forces in any industry that affect the ultimate profit potential of a venture in terms of long-run return on investment. By contrast, such things as economic forces, changes in demand, material shortages, and technology shifts affect short-run profitability.

Threat from Buyers' Bargaining Power

In industries where buyers (customers) have bargaining power, it is more difficult for a new entrant to gain a foothold and grow. Examples of buyers that have this type of bargaining power include Costco, Amazon, and Walmart. Buyers like these can force down prices in the industry through volume purchases. Buyers also gain bargaining power where they face few switching costs; where the industry's products are standardized or undifferentiated, so there are plenty of substitutes; or where the industry's products don't affect the buyer in a significant way. The largest buyers also pose a threat of backward integration; that is, they may actually purchase their suppliers, thus better controlling costs and affecting price throughout the industry.

Threat from Suppliers' Bargaining Power

In some industries, suppliers exert enormous power through the threat of raising prices, limiting the quality or quantity of goods they supply, or changing the quality of the products that they supply to manufacturers and distributors. A further threat from suppliers is that they will integrate forward—that is, they will purchase the outlets for their goods and services, thus controlling the prices at which their output is ultimately sold.

Innovation-driven economies

Innovation-driven economies, which are the most advanced, are where businesses compete based on innovation and entrepreneurship. Examples are the United Kingdom, Singapore, Israel, and the United States. The highest levels of entrepreneurial activity are found in Australia, Estonia, the United States, and Canada at about 17 percent.

three primary characteristics of high-impact entrepreneurial ventures:

Innovative—the venture brings something new to the marketplace. Value-creating—the venture creates new jobs that don't draw from existing businesses and serve customer needs that are currently unserved. Growth-oriented—the entrepreneur sees the business growing to a regional, national, or global level.

changing business models

It is a fact of business life that business models evolve and sometimes radically change over time due to circumstances often beyond the control of the entrepreneur. Change can occur in a number of ways. Businesses can: 1. Incrementally expand the existing model geographically, enter new markets, modify pricing, or change product/service lines and distribution channels. 2. Revitalize an established model to give it new life and stave off competition. This can be accomplished by introducing new products or services to existing customers 3. Take an existing model into new areas. 4. Add new models via acquisition. 5. Use existing core competencies to build new business models.

two important reasons to study the industry in which your business will operate.

It represents the business's external environment, and no business operates independent of its external environment. You need to understand whether you can make a profit in the industry and if that profit will be significant enough to make the effort to start the business worthwhile.

How do Entrepreneurs Create New Industries?

New industries are born when technological change produces a novel opportunity that enterprising entrepreneurs seize.

new product failure

No matter which source you consult, the failure rate for new consumer products is somewhere between 70 and 90 percent, although failure rates do vary by industry and by type of product. A significant body of research has revealed that the principal reason for new product failure is lack of good market and industry analysis. Innovators can be successful at creating value for customers, but unless they have found a way to capture sufficient value that the customer is willing to pay for, the returns from their innovation will be tapped by imitators, providers of complementary products, and others in the value chain.

Why do entrepreneurs frequently underestimate or completely ignore the competition?

One of the weakest portions of any feasibility analysis or business plan is the competitive analysis. 1. Their information is incomplete because competitors don't reveal their most proprietary strategies and tactics. 2. They tend to underestimate what it takes in the way of resources and skills to establish a presence in a market. 3. They don't identify all the roadblocks along the way. 4. They don't know what they don't know!

external variables of entrepreneurial process include:

the economic environment, competition, new laws and regulations, labor supply, and sources of capital.

gross margins

A gross margin is derived by dividing gross profit by sales. The resulting number indicates how much money is left to pay overhead and make a profit. Both small and large gross margins have trade-offs. If an industry typically has 2 percent gross margins or less, as the grocery industry does, making a profit will require selling in large volumes and keeping overhead costs to a minimum. Price, therefore, will be a driver of customer purchasing decisions. Where margins run at 70 percent or higher, there is a lot more room to play, but generally these industries (such as the software industry) have relatively short product life cycles, so R&D costs are high.

Resource decisions are related to the four key activities of the business:

1.The value proposition or solution: What activities do you need to accomplish to create the solution to meet the needs of the customer? 2. Distribution channels: What activities do you have to do because of your channel partners? 3. Customer relationships: What activities do you have to undertake to maintain good relationships with your customers? 4. Revenue generation: What activities do you have to do to produce sufficient revenue? All of these activities require resources, whether human, financial, intellectual, or physical. One of the secrets to success in constructing this resource mix is to maintain flexibility and reduce startup capital requirements by acquiring and owning only those resources that cannot be obtained by any other means

Digital Twins (digital trend)

A digital twin is exactly what you might think it is—a digital replica of a human or real-world entity. Using connected sensors and endpoints, we can now conduct advanced simulations, operations, and analysis via a digital twin.

value proposition

A statement that summarizes why a customer should buy your product or service. In other words, what's in it for the customer.

minimum viable product (MVP)

An MVP is that version of a product that contains just enough of the functionality and value proposition to attract early adopters who provide feedback and help you develop a final product for the mass market. The goal of the MVP is to attract those initial customers who can guide the direction of the product. The goal of the final product is to attract passionate users/customers who will refer your product to others. If your product concept falls closer to the incremental end of the spectrum, you are dealing with customers who have real problems and who will quickly grasp whether a solution you propose will solve that problem. That also means that there is typically a lot of competition from major players in the market; therefore, you will need to build more than just a simple MVP to get the kind of feedback you need. Going out with a complete product actually might make more sense, since customers have alternatives. By contrast, if your product concept lies closer to the disruptive end of the spectrum, building an MVP in stages based on customer feedback is more valuable because you don't have direct competition initially so you have time, and customers won't expect the MVP to be perfect since the solution is novel. Once you determine that your MVP solution fits the market you have targeted, it's time to finish the product so that it's a complete solution that reflects what you learned from your MVP testing. It's important to remember that it is not the number of times you iterate your MVP that produces a viable product; it's how well you recognize when the customer tells you that you have a viable product, and that could be after the first iteration.

Barriers to Entry

An entrepreneurial venture's success in a given industry or market is affected by the ability of new firms to enter the entrepreneur's market. If the costs are low and few economies of scale exist, then competitors can easily enter and disrupt the entrepreneur's competitive strategy. In some industries and markets, however, barriers to entry are high and will discourage competitors from entering. Note that these factors may also present a challenge for entrepreneurs entering new markets or a new industry. These barriers may include the following: 1. economies of scale 2. brand loyalty 3. Capital Requirements 4. Switching Costs for the Buyer 5. Access to Distribution Channels 6. Proprietary Factors 7. Government Regulations

what is an industry?

An industry is simply the people and companies that engage in a category of business activity such as semiconductors, medical devices, or food services.

Critical Entrepreneurial Skills

Analysis and critical thinking: 1. Calculated risk taking 2. Embracing uncertainty and ambiguity 3. Opportunity creation 4. Organizational and time management (details) 5. Resource gathering Written and oral communication: 1. Story telling 2. Vision 3. Persuasion and negotiation 4. Decision making 5. Leadership and people management

Economies of Scale

As a company's product volumes increase, the cost to produce declines relative to the price of their goods and services.

what 2 roles does an entrepreneur play?

As the leader, an entrepreneur essentially plays two roles—that of the catalyst, initiating and driving the process, and that of a ringmaster in a three-ring (or more) circus, managing the process through all its changes as the business grows.

Identifying Attributes (way to avoid the early mistakes)

Attribute identification is a simple technique that has the entrepreneur breaking down a problem into its various elements and then generating new approaches or modifications for each element 1. What can we add or take-away from an attribute? 2. Can we combine an attribute with something else? 3. What if we reverse the problem statement? These questions and more can help you look at your initial problem definition in a different way. Looking at problem attributes will reveal numerous possibilities for how they might be configured to create a unique product/service differentiation.

Segmenting the Market with a Customer Matrix

Customer segmentation is critical to providing the right benefits to the right customer. One useful way to look at various customer segments is to construct a customer matrix that lays out the benefits, distribution channel, product/service, and potential competition for each of the identified customer segments. Once the customer segments are identified, you have to make a choice. Which of these three customers should you go after first? The decision about where to enter the market first is affected by size of the market, customer demand, and resources, but the most important consideration is which customer is most likely to buy. Out of the primary research will come a complete profile of the customer in great detail, that is, a description of the primary customer, be it a consumer or a business. The profile is critically important to the eventual marketing strategy, because it provides information vital to everything from product/service design to distribution channels and the strategy to attract the customer gauging demand: A better approach is to identify a problem, confirm that the respondent is experiencing that problem, and then ask if your solution would interest them. This approach makes it easier for the customer to respond honestly. Talking to customers to gauge demand is only the first step. It is also important to discuss demand with industry people such as suppliers and retailers. Getting estimates from at least three different sources enables you to derive a range of values and then triangulate to a best estimate.

Feasibility analysis

Feasibility analysis involves the testing, evaluation, and validation of a proposed business model for a new venture. It is a tool that is used to assess and reduce risk at startup. To more accurately assess the future for an opportunity, you must understand your capabilities, the capabilities and intentions of your competition, the needs and desires of customers, and the bargaining power that you have in the value chain The bottom line is that the more information you acquire during the process of feasibility analysis, the higher the chance that your predictions will be close to the mark, risk will be reduced, and uncertainty managed. To accomplish this, you will need to develop hypotheses about the components of your business model and test them in the market. In addition to testing the business model components, feasibility analysis also addresses three critical success factors for any business. The questions you want to answer are: 1. Is there a customer and market of sufficient size to make the concept viable and able to grow? 2. Do the capital requirements to start and operate to a positive cash flow make sense? 3. Can an appropriate startup or founding team be assembled to effectively execute the concept?

Developing Solutions

Identifying the right problem is the most challenging aspect of the problem-solving process because it's important to get the problem right from the start so that time and money won't be wasted on the wrong solution. The same techniques used to generate and focus ideas related to a problem can now be employed to generate and focus potential solutions. Criteria often play a more critical role in the identification of solutions because normally there are constraints in the form of costs, skills, and timeframes that must be taken into consideration. For entrepreneurs, the closer the solution relates to the actual problem the customer is experiencing, the more likely that there will be immediate sales upon completion of product development.

how to asses the competition

In assessing the competition, the idea is not to benchmark the new venture against a competitor but rather to find ways to create new value that customers will pay for. To undertake effective competitor research, you have to first determine the target market that your venture is serving (which was discussed in the previous section), because entrepreneurs compete in markets. The next step is to identify the competition. to correctly assess the competitive market, one must view it from two sides: the supply side, which includes resource capabilities such as R&D and production, and the demand side, which is represented by the customer and the customer's needs.

immersive experiences (digital trend)

Mixed realities that include augmented reality and virtual reality will blur the lines between the real world and the digital. The user will interact with objects in both the digital and real world. You are already seeing these immersive experiences in such things as video games, manufacturing, medical training, and military simulations.

Networking

Networking is the exchange of information and resources among individuals, groups, or organizations whose common goals are to mutually benefit and create value for the members. Entrepreneurs do not act autonomously but, rather, are part of social networks with which they interact how do you achieve a large but meaningful network? You accomplish this by connecting with network brokers who serve as gateways to other networks. These brokers, or opinion leaders, exert influence between groups or networks.

Determining what resources are needed, when they are needed, and how to acquire them is a critical piece of the startup feasibility puzzle. Startup resources include:

People, such as the founding team, employees, advisors, and independent contractors Physical assets, such as equipment, inventory, and office or plant space Financial resources, such as cash, equity, and debt Intellectual resources, such as a brand, patents and copyrights, licenses, and proprietary knowledge.

phase 1 of entrepreneurial process

Phase 1: Entrepreneurs initially work to find a significant problem or need in a market or an industry. Then they do preliminary research to understand the industry, the potential market, and any issues they might face in the areas of intellectual property, regulation, or in product development in the case of a technology solution. They then develop hypotheses from what they've learned.

phase 2 of entrepreneurial process

Phase 2: Here entrepreneurs focus on validating the hypotheses they have made about the customer, the solution, and the proposed business model. The results will ultimately provide important information about potential sources of revenue and major drivers of cost.

phase 3 of entrepreneurial process

Phase 3: When the activities in Phases 1 and 2 give entrepreneurs sufficient confidence that their business is feasible, it's time to consider the design of the business and to create a plan for its execution. This means having the right team and partners in place as well as choosing the best time to launch the business.

Risk and the Entrepreneurial Venture

Simply put, the amount of investment an individual is willing to make in a new product—or, in this case, in a new venture—is a function of the probability of its success, the value of that success, and the cost of failure . A change in any one of these values will alter the economics of the bet.Footnote Nascent entrepreneurs use the time spent in the fuzzy front end to calculate the probability of success as an entrepreneur; what that success will mean in terms of return on his or her investment of time, money, and effort; and what the risk or cost of failure might be.

economic core

Small businesses such as shops, restaurants, and professional service businesses.

force fitting (way to avoid the early mistakes)

Some of the best ideas come from connecting things that normally don't go together. You take a random object and create a relationship to the problem statement you're dealing with. When you pick a random object, be sure to think about its characteristics and then force those characteristics to apply to your problem.

Defining Your Launch Strategy to Reduce Risk

The best launch strategy will have identified as many potential risks as possible and eliminated them. But it's not just about eliminating risk; it's about eliminating the right risks in the right order employing the right amount of resources. risk can be divided into three broad categories: 1. Deal-killer risks. It is unfortunate that many entrepreneurs never attempt to kill their businesses in the early stages of their development. What that means is they don't seek to understand those existential risks that might prevent the business from launching in the first place. 2. Path-dependent risks. These are risks that arise from a decision to take what turns out to be the wrong path. With sunk costs in that path, do you continue or regroup and move down a better path? Usually the best advice is to not throw good money after bad; instead, move on. 3. Low-hanging fruit with high ROI. These are risks that are easy and cheap to overcome; and if you do overcome them, the rewards are great. Treat these risks like small experiments, betting that perhaps one of the opportunities might succeed.

Competitive Rivalry among Existing Firms

The four factors just discussed all work together to create competitive rivalry for the resources available in the industry. In general, a highly competitive industry serving highly competitive markets will drive down profits and ultimately the rate of return on investment. To position themselves in a competitive market, firms often resort to price wars and advertising skirmishes. Most new ventures can't compete on price and can't afford costly advertising battles to build an image. To compete in a market that is highly competitive, they must instead identify a niche that serves an unmet need for customers and that will enable them to enter quietly and gain a foothold.

Positioning the Venture in the Value Chain

Where your new venture lies in the value chain will determine what its profit margins are, who its customers are, and how much it can charge for its products and services—in short, what business you are in. In the case of a service business, the task is easy because services are delivered direct to the customer. But the case is much different with a product company. Where the company is positioned in the value chain determines whether it is a manufacturer or producer, a wholesaler or distributor, or a retailer dealing directly with consumers. Each position produces different margins, different ways of pricing, different levels of risk, and different logistics requirements.

Attractive versus Unattractive Industries Based on the Five Forces

attractive industry: 1. high entry barriers 2. weak supplier and buyer bargaining power 3. few substitutes 4. not highly competitive unattractive industry: 1. low entry barriers 2. strong supplier and buyer bargaining power 3. many substitutes 4. intense competition

Restating the Problem (way to avoid the early mistakes)

see an example of how a problem statement can be reworked to get at the root problem that was not apparent from the original problem statement. In this case, it appears on the surface that the problem is insufficient sales. The approach that gets at the root of the problem in this case is asking "why" and then restating the problem until the real cause emerges. As you can see, the real problem is they can't get the project finished on time, which has nothing to do with insufficient sales.

Porter's Five Forces

threat of new entrants or barriers to entry, threat of substitute, supplier bargaining power, buyer bargaining power, competitive rivalry