Business Case for Investment Quiz

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Questions and Answers

What is the first criteria outlined in the module for a business case?

Competitive analysis

Market opportunity (correct)

Financial projections

Operational efficiency

What does 'red ocean' signify in the context of market opportunity?

A market filled with intense competition (correct)

A market with declining opportunities

A market with high profitability

A market with untapped potential

Why does the speaker prefer to invest in a market that's enduring and growing?

To avoid investing in a declining market (correct)

To minimize initial investment risks

To take advantage of short-term opportunities

To ensure immediate high returns

What is the speaker's analogy for an ideal market opportunity?

Forrest Gump after the hurricane Signup and view all the answers

What represents the potential business impact of any initiative?

The difference between the current state and the desired state Signup and view all the answers

What is one of the most critical elements of any business case?

A well-defined problem Signup and view all the answers

What is the benefit of the business case, as mentioned in the text?

Demonstrating measurable change in defined metrics Signup and view all the answers

What is the critical question for measurement, as per the text?

How do you know it is a problem Signup and view all the answers

What should leaders focus on when evaluating a proposed solution, based on the text?

Whether the solution will achieve measurable results Signup and view all the answers

What are the two simple questions at the heart of understanding the true business need, as mentioned in the text?

Why and how do you know Signup and view all the answers

What is the primary focus of continuously asking 'why' and 'how do you know', according to the text?

Understanding the true business need Signup and view all the answers

What should be able to change at the end of the business case, based on the text?

Whatever metric used to define the problem Signup and view all the answers

What do venture capital firms prioritize when funding projects?

Billion-dollar market opportunities and solutions addressing significant pain points Signup and view all the answers

What is the preferred focus when evaluating projects?

Scalability across the entire organization Signup and view all the answers

What is essential for projects to ensure sustained success and competitiveness?

Alignment with the organization's overall goals and objectives Signup and view all the answers

What do investors favor when considering projects?

Projects addressing customer pain points Signup and view all the answers

What is the crucial component of a business case's competitive advantage?

Helping the company improve and compete effectively in the marketplace Signup and view all the answers

What do investors assess when evaluating potential market opportunity?

Size and attractiveness of the market being targeted Signup and view all the answers

What is crucial for the success of a business case?

Solving the customer's pain point Signup and view all the answers

What is important when defining the pain point being solved?

Empathizing with the eventual user Signup and view all the answers

What did Novelis develop to address Coca-Cola's sales challenges?

100% recycled aluminum cans, the Evercan Signup and view all the answers

What was Coca-Cola's main issue that affected sales?

Declining sales due to changing consumer preferences away from sugary drinks Signup and view all the answers

What are venture capital firms more inclined to fund?

Projects addressing significant pain points Signup and view all the answers

What decision did the chief financial officer make regarding a declining line of business?

Reduce budget to allocate resources to growing, profitable areas Signup and view all the answers

What must a business case articulate to ensure a return on investment?

Market understanding, competition, pricing, costs, and revenue Signup and view all the answers

What is crucial to define in a business case for investment?

Break-even point, internal rate of return, investment amount, and utilization of the investment Signup and view all the answers

What is emphasized as a key factor in investment decisions by venture capital firms?

The entrepreneur's capabilities Signup and view all the answers

What influences a business case's approval according to the text?

The broken process, the business model, risk identification, and the capability of the executing team Signup and view all the answers

What are companies reluctant to invest in according to the text?

Activities that don't differentiate them or improve performance Signup and view all the answers

What is suggested to identify critical success factors and risks in a business case?

Pre-action review technique Signup and view all the answers

Why is the team executing the business case considered important according to the text?

The ability to execute is a crucial aspect of investment decisions Signup and view all the answers

What is used as an analogy to emphasize the importance of articulating how the investment will be paid off?

A personal financial analogy Signup and view all the answers

What prompted the need for a business case for investment according to the text?

A critical process in the organization was broken Signup and view all the answers

What did the CFO question in the text?

The point of investing a significant amount of money just to achieve an average outcome Signup and view all the answers

What is vital in the business case to gain approval according to the text?

Identifying and transparently addressing the risks of the project Signup and view all the answers

What is as important as the plan itself in investment decisions according to the text?

The team executing the business case Signup and view all the answers

Study Notes

Key Elements of a Business Case for Investment

A critical process in the organization was broken, prompting the need for a business case for investment to fix it.
The business case was presented to the capital committee, highlighting the potential improvement in the process from below average to average after the investment.
The CFO questioned the point of investing a significant amount of money just to achieve an average outcome.
Companies are reluctant to invest in activities that don't differentiate them or improve performance, but may invest in critical yet marginal business cases.
The business case must articulate a business model that ensures a return on investment, including market understanding, competition, pricing, costs, and revenue.
It's crucial to define the break-even point, internal rate of return, investment amount, and utilization of the investment.
A personal financial analogy is used to emphasize the importance of articulating how the investment will be paid off.
Identifying and transparently addressing the risks of the project is vital in the business case to gain approval.
A pre-action review technique is suggested to identify critical success factors and risks that differentiate between success and failure.
The team executing the business case is as important as the plan itself, as the ability to execute is a crucial aspect of investment decisions.
The panel of venture capital firms emphasized that the entrepreneur's capabilities are a key factor in investment decisions, even more so than the technology or patents.
A business case's approval is influenced by four key criteria: the broken process, the business model, risk identification, and the capability of the executing team.

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Description

Test your knowledge of the key elements of a business case for investment with this quiz. Explore the critical factors that influence investment decisions, including market understanding, competition, pricing, costs, and revenue. Understand the importance of articulating a clear business model, identifying risks, defining financial metrics, and evaluating the capability of the executing team. Discover the essential criteria that influence the approval of a business case for investment.