scalability

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Salima TharaniTasnim GhansarRegina VazSandeep Rane

GROUP -9Scalability and Risk Assessment Treatment Plan (SWOT & BCG)1

SCALABILITY

Assessment Treatment Plan(SWOT & BCG)AndScalability and Risk Assessment Treatment Plan (SWOT & BCG)Scheme Of PresentationScalability Scalability DimensionsNeed for ScalabilityCharacteristics of a Scalable BusinessSteps in Designing a Scalable BusinessUsing SWOT & BCG for Scalability

Risk Assessment Treatment planNeed for RATPRisk Management ProcessDeveloping Risk Management PlanRisk Assessment TreatmentCase Study

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)

SCALABILITY

Assessment Treatment Plan(SWOT & BCG)AndScalability and Risk Assessment Treatment Plan (SWOT & BCG)Ability to sustain and perform vis a vis profitability and/or efficiency

Ability to handle increased demand

Maintaining performance with increased volumes without impacting performances

Financial markets: Ability to handle increased demands, such as higher trading volumes

Corporate sense: Maintain or improves profit margins while sales volume increases

ExampleA given piece of equipment may have capacity from 1-1000 usersBeyond 1000 users, additional equipment is neededPerformance will declineVariable costs will increase and reduce contribution margin

Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCGScalability and Risk Assessment Treatment Plan (SWOT & BCG) Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCGAdministrative scalabilityAbility for an increasing number of organizations Easily share a single distributed system

Functional scalabilityAbility to enhance the systemAdding new functionality with minimal effort

Load scalabilityAbility for a distributed system to easily expand and contract its resource poolTo accommodate heavier or lighter loads

Geographic scalabilityAbility to maintain performance, usefulness, or usabilityRegardless of expansion from concentration in a local area to a more distributed geographic patternScalability and Risk Assessment Treatment Plan (SWOT & BCG)Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCGMarket PenetrationTapping New MarketsProfitabilityCapital OptimisationBusiness ExpansionScalability and Risk Assessment Treatment Plan (SWOT & BCG)Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCGFixed Costs and Variable CostsSmaller VC per unitFixed Costs to be ignored

Economies of Scale v/s ScalabilityEconomy of scale Variable costs reduceScalability - Operating margins increase as revenues increase

DemandThat potential is only fulfilled when demand actually drives revenues upScalable model with evidence of booming demand is the ideal situation

Cost of Goods Sold (COGS) and Revenue RelationshipCompanies with very low COGS percentageCost of sales and marketing, per unit or customer, is less than the gross marginFor every dollar spent on marketing more than a dollar is generated in gross margin, provided there is demandScalability and Risk Assessment Treatment Plan (SWOT & BCG)Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCGRevenue How will you make your money?

Customer- Who is buying?

Unique value proposition- How are you different ?

Channels- How will you reach your customers?

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCGDesigning a scalable Business

New, Better, Faster, Cheaper Investing in the Right Idea through Strategic thinking Choose the Right Market Focus on Profitability Data collation and analysis Modern Marketing- a necessary ingredient for scaling Fund innovation Strategic Financial planning and projectionsScalability and Risk Assessment Treatment Plan (SWOT & BCG)Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCGHorizontal ScaleMore sitesMore networksMore traffic sourcesMore offers, products or nichesMore ad networksMore revenue streamsMore people

Vertical ScaleBigger TrafficBigger ad spendBigger ROIBigger Geographic coverageWhat can I do, today, to build a system, that will allow this business to operate independent of my time?

More + Bigger= ScalableCreate repeatable systems using both horizontal and vertical scaleScalability and Risk Assessment Treatment Plan (SWOT & BCG)Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCGStrengthsThe huge user baseBrand valueNo real competitorWeaknessesMaturity stage almost reachedNo income from subscription(LinkedIn)Potential risk of young group of management professionalsOpportunitiesRevenue through advertisementContinual product developmentIncreasing reach of the internet usage worldwideThreatsCompetitive advantage needs to be built further for advertising Data security threatOther social networking platform

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCGScalability Plan adopted by Facebook

People Matter MostScale HorizontallyMove FastChange IncrementallyMeasure EverythingSmall, Independent TeamsControl and Responsibility

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCG

(in millions)Scalability and Risk Assessment Treatment Plan (SWOT & BCG)Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCG

StrengthsUnmatched product and brand portfolioR&D capabilitiesDistribution channels and geographic presenceCompetency in mergers and acquisitionsBrand reputation valued at $7 billionWeaknessesInability to provide consistent quality in food productsWeak implementation of CSROpportunitiesIncreasing demand for healthier food productsAcquiring start-ups specializing in producing well-being productsEstablishing new joint venturesThreatsFood contaminationTrend towards healthy eatingGrowth of private labelsRising raw food pricesScalability and Risk Assessment Treatment Plan (SWOT & BCG)Scalability DimensionsNeedCharacteristicsSteps to build itSWOT & BCG


The relative share market share and market growth of different products are given belowProduct NameSTBUMarket Growth RateRelative market ShareMineral WaterStar85%89%MilkpakCash Cow55%65%NoodlesQuestion mark75%38%Chocolate / Juices Dog40%38%


In the BCG matrix mineral water is at star with high share and high growthMilkpak is at cash cow with high growth and low share

Noodles are at Question mark with high share and low growth

Chocolate / juices at dog low share and low growth


Tata MotorsScalability and Risk Assessment Treatment Plan (SWOT & BCG)Scheme Of PresentationScalability Scalability DimensionsNeed for ScalabilityCharacteristics of a Scalable BusinessSteps in Designing a Scalable BusinessUsing SWOT & BCG for Scalability

Risk Assessment Treatment planNeed for RATPRisk Management ProcessDeveloping Risk Management PlanRisk Assessment TreatmentCase Study


SCALABILITY

Assessment Treatment Plan(SWOT & BCG)AndScalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase StudyA systematic process of evaluating the potential risks that may be involved in a projected activity or undertaking

Risk Management is an integrative process consisting of well-defined steps which, taken in sequence, support better decision making by contributing a greater insight into risk and their impacts

The risk management process can be applied to any situation where an undesired or unexpected outcome could be significant or where opportunities are indentified To be most effective, risk management should become part of organization's culture

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanCase StudyThe purpose of risk management is to:

Identify possible risksReduce or allocate risksProvide a rational basis for better decision making with regards to all risksServe as a blueprintEnsure management of high priority risksEnable decision making in critical situationOptions & TreatmentScalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase StudyIdentify the Risk Brainstorming and ReviewingCategorise and Prioritise

Assess the Risk Identify the root causes of the identified risks The project team asks questions including: What would cause this risk? How will this risk impact the project?Scalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase StudyDevelop Responses to the Risk Assessing possible remedies to manage/ possibly prevent the riskQuestions the team will ask include: What can be done to reduce the likelihood of this risk? What can be done to manage the risk, should it occur?

Develop a Contingency Plan or Preventative Measures for the Risk Ideas identified to be put into task for risk prevention/ eliminationDevelop the Identified tasks into short contingency plans to be brought into action in the event of occurrence of the riskScalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase Study1. Understand how Risk Management works :

Risk= Probability x ImpactEvent: What could happen?Probability: How likely is it to happen?Impact: How bad will it be if it happens?Mitigation: How can you reduce the Probability (and by how much)?Contingency: How can you reduce the Impact (and by how much)?Reduction: Mitigation X ContingencyExposure: Risk ReductionAssumed Risk: to calculate the profitability of the end product

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase Study2. Define your project3. Get input from others4. Identify the consequences of each risk5. Eliminate irrelevant issues6. List all the identified risk elements7. Assign probability8. Assign Impact9. Determine risk for the element

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase Study10. Rank the risks11. Compute the total risk12. Develop mitigation strategies13. Develop contingency plans14. Analyse the effectiveness of strategies15. Compute your effective risk16. Monitor your risk

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase Study

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase StudyReducePutting controls in placeReducing the probability of the vulnerability being triggered, or reduce the impactRetainAccept the loss when it occursStrategies for small-impact risks(cost of insurance > total losses sustained)Planning to manage the consequences and identifying the means of financing the riskRetention by default- Identification/Transfer/Treatment failureAvoidanceNot performing the activity that carries the riskRisk aversion v/s Risk avoidanceTransferTransferring the risk to another party who is willing to accept itRisk in itself as the other party may not manage the risk effectively

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase Study

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanCase Study

Options & TreatmentScalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase StudyThe Olympics as a Story of Risk ManagementA lot of things can go wrong( Natural Disasters, Economic breakdown, Health & Security Threat, Technology related Failure)

Growing scale, Complexity & Time horizon

Effective Risk Management Approaches

Unforeseen dangers vs Self Inflicted risks- Effective risk management

Control, Prevention, Mitigation or Recovery

Investments made into risk management using internal controls

Scalability and Risk Assessment Treatment Plan (SWOT & BCG)RATPNeedProcessPlanOptions & TreatmentCase StudyThe Olympics as a Story of Risk ManagementStress-testing and Scenario Planning (E.g.: 600 scenarios identified for rehearsals of the Vancouver 2010 Winter Olympics)

Terrorism and Natural Disaster are major threats as considered by International Olympic Committee)

Systematic Bidding Process

Olympic Games Knowledge Management Program

Risk-based approaches- Creation of risk registers (i.e. databases) and monitoring systems put in place to spot issues that pose potential dangers



scalability

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itswot bcgscalability

itswot bcgfixed costs

itswot bcgrevenue

unitfixed costs

declinevariable costs

increased volumes

increased demands

evidence of booming