They are divided into two broad categories viz. non-discounting criteria & the discounting criteria. The details of this process will be discussed later. Since the selection process considers the worthwhile ness of the project we are supposed to consider the risk factors that are associated with the project. The details of the risk analysis are considered in the later sections. 7
PART 1 PLANNING Nobody can really guarantee the future. The best we can do is to size up the chances, calculate the risks involved, estimate our ability to deal with them and make our plans with confidence. – HENRY FORD II 8
1 Project Proposal Needs of Customers through ISP 2 are: High Speed Internet access. A combination of application delivering Voice, Video and data through Internet. High Bandwidth at low cost. Flexibility for future services & availability regardless of location. Solution : Ethernet 3 over SDH/SONET. Advantages of Using Ethernet: It’s flexible, easy to manage & operate. It is capable of handling up to 10Gbs 4 with excellent reach via Optical networks. It’s is the lowest cost network technology on the Market. It provides efficient Ethernet transport with excellent OAM (Operations, Administration & Maintenance) features. It uses Bandwidth in an efficient manner. 2 ISP means Internet Service Provider. 3 Ethernet is a packet based transmission protocol that is primarily used in LANs. Ethernet is the common name for the IEEE 802.3 industry specification and it is often characterized by its data transmission rate and type of transmission medium (e.g., twisted pair is T and fiber is F). 4 Gigabits per second. 9
2 Strategy & Capital Allocation. If you look at any organization, which are successful, or failure today is mainly the result of capital allocation decisions made in the past. Capital is scarce and must be allocated across competing claims very judiciously. Capital Budgeting may be viewed as a two-stage process. In the first stage, promising growth opportunities are identified through the use of strategic planning techniques and in the second stage; individual investment proposals are analyzed and evaluated in detail to determine there worth. This topic discusses strategic planning techniques & approaches aimed at promising growth opportunities. Caution: The strategy discussed here are about the project proposal mentioned in the Topic 1 & it should not be confused or compared with the Company’s strategy. A strategy is a long term plan of action designed to achieve a particular goal, most often "winning". To formulate any effective strategy, it's essential to understand two basic questions: What are we doing and what are your competitors doing? Before answering the second question, let’s discuss about the first question. Strategy involves matching a firm’s ‘Strengths’ and ‘Weakness’ (Internal-Analysis)-its distinctive competencies- with the ‘opportunities’ and ‘threats’ present in the external environment. Fig 10
1 shows schematically how strategies are formulated based on the concept.
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