Lecture Management (2nd edition) – Chapter 18: Entrepreneurship and innovation

This chapter’s objectives are to: Define the process of entrepreneurship and the role of managers as entrepreneurs, describe the opportunities and challenges that affect the growth of new ventures, compare and contrast different types of ventures that entrepreneurs create,...

MANAGEMENT SECOND EDITION Chapter 18 Entrepreneurship and Innovation Learning Objectives § § § § § Define the process of entrepreneurship and the role of  managers as entrepreneurs Describe the opportunities and challenges that affect  the growth of new ventures Compare and contrast different types of ventures that  entrepreneurs create Explainhowmanagersleadacreativeprocesswith individualsandteams Outlinehowentrepreneursuseinnovationtogrow globalopportunities Copyrightâ2017JohnWiley&Sons,Inc HowEntrepreneurshipMakesa Difference(p.440) Đ Entrepreneur ã • • Individual that plans, organizes, and leads high­risk  business opportunities with new market value Entrepreneurial skills – capacities, activities, and strengths  that enable individuals to manage successfully in high­risk  business environments Entrepreneurs encourage customers to accept new  innovation  Copyright ©2017 John Wiley & Sons, Inc HowEntrepreneurshipMakesa Difference(cont.) Đ Innovation(p.440) ã ã Processthatresultsinnewmarketvaluethroughthe creationofaproductorservice Innovationadoptioncurvestagedmodelthatdescribes theevolutionofaninnovationsacceptancewiththree types of customers § § Innovators  Early adopters § § § Early majority (p. 442) Late majority Laggards Copyrightâ2017JohnWiley&Sons,Inc HowEntrepreneurshipMakesa Difference(cont.) Đ Startưupcompany(p.442) ã Đ Entrepreneurship ã § Activities associated with seeking new opportunities that generate new  value, with an array of unknown forces Business model • § Newly formed organization with limited or no operational history Proposed method for creating and sustaining market value Venture capital • Fundingthatsupportsthestartingandgrowingofhighưriskbusiness ventures Copyrightâ2017JohnWiley&Sons,Inc HowEntrepreneurshipMakesa Difference(cont.) Đ People,processes,andtheecosystem(p.442ư443) ã Entrepreneurialecosystemsetofstakeholdersthatare necessarytosupporttheinnovationandcreationofnew marketvalue Đ Mustembracecreativity Đ Creativityprocessthroughwhichindividualsandgroupstransform ideasintoreality Copyrightâ2017JohnWiley&Sons,Inc OpportunitiesandChallengesthat EntrepreneursFace(p.444) Đ Growthaccelerants ã Marketopportunity/customers/competitors Đ Đ Đ ã Humanresources/people/organizationalculture Đ ã Identifygapinthemarket Attractdiversecustomers Becomeaseriouscompetitortootherbusinesses Attractandnurturethebesttalent Product/service/afterưsales Đ Đ Innovativeproduct Unparalleledsalesandafterưsalesservice Copyrightâ2017JohnWiley&Sons,Inc OpportunitiesandChallengesthat EntrepreneursFace(cont.) Đ Growthaccelerants(cont.) ã Marketing/branding(p.445) Đ Đ ã Shouldbedesignedbeforethecompanyislaunchedinorderto differentiateitfromthecompetition Feasibilitydegreetowhichabusinessventureispossible,given theavailabilityofresourcesandtechnology(p.446) Researchanddevelopment/newproductdevelopment Productsdesignedtohighestqualityspecifications Đ Importantformaintainingproductspositioninthe market Đ Copyrightâ2017JohnWiley&Sons,Inc OpportunitiesandChallengesthat EntrepreneursFace(cont.) Đ Challengestogrowth(p.445) ã Humanresources/people/organizationculture Đ Đ ã Marketopportunity/customers/competitors § • Struggle to attract and retain new talent People must fit in to the organization culture Another company may identify and capture the market sooner Company financing and liquidity § § Liquidity – measurement of available financial resources or the  ability to convert an organization’s assets into cash Startưupswillnotsurvivewithoutappropriatefinancing Copyrightâ2017JohnWiley&Sons,Inc OpportunitiesandChallengesthat EntrepreneursFace(cont.) Đ Challengestogrowth(cont.) ã Operationsmanagement/systems(p.445) Đ Đ • Systems and operations do not work Quick fixes provide only short­term relief Top management/board (p. 446) § § Hiring people as top­level managers without experience in start­up  companies Produces conflict between managerial team and entrepreneurial  team fighting to maintain the original vision Copyrightâ2017JohnWiley&Sons,Inc OpportunitiesandChallengesthat EntrepreneursFace(cont.) Đ Opportunitiesandrisksfornewventures(p.446ư448) ã ã Marketsizelargermarketshavegreatergrowthpotential Marketvaluecreationandcustomeradoption Đ • • • Value creation – activities and processes that increase the worth of a  product or service Market value capture and business model – business model should  address how much value of the market can be captured Management team/people/resources – evaluation of abilities necessary  to produce success Discovery or technical ability Đ Scalingdegreetowhichacompanyorbusinessmodelcangrow,given thenecessaryresources Copyrightâ2017JohnWiley&Sons,Inc OpportunitiesandChallengesthat EntrepreneursFace(cont.) Đ Opportunitiesandrisksfornewventures(cont.) ã Financialandliquidity(p.448) § • • Initial public offering – first time a company sells its equity shares  on the stock market  Government/political/regulatory – effect of regulatory  environment on potential for growth Execution and scaling – execute the system as soon as  possible, secure clients, choose a location for the company,  and get finances in order  Copyrightâ2017JohnWiley&Sons,Inc ManagingandLeadingNewVentures (p.449) Đ Chosenstrategymustsuitbusinessmodelofthenew venture ã ã ã Aggregationventurebusinessstrategydefinedby acquiring, merging, and coordinating existing market  products, services, and companies (p. 450) Discovery venture – business strategy that seeks to invent a  brand­new product or service or find a new resource New­existing venture – business strategy defined by  offering a new product or service to an existing category or  consumers Copyright ©2017 John Wiley & Sons, Inc Managing and Leading New Ventures  (cont.) § Chosen strategy must suit business model of the new venture  (cont.) • New­new venture – business strategy defined by offering a new  category of consumers a new product or service (p. 450) § • • Typically distinguished by higher risk and higher returns compared to  new­existing ventures System change venture – business model responding to a significant  change in political environments, governmental legislation, and  regulation Transplant venture – business strategy where an idea that achieves  market success in one market region is transferred to other geographic  markets Copyright ©2017 John Wiley & Sons, Inc Managing and Leading New Ventures  (cont.) § Chosen strategy must suit business model of the new  venture (cont.) • Value chain venture – business model that seeks to  redesign or augment an offering in an existing business or  management process (p. 450) § • E.g., outsourcing of information technology and research Waveventurebusinessmodeldefinedbyasystemic changeinbusinessandmarketenvironments Copyrightâ2017JohnWiley&Sons,Inc ManagingtheCreativeProcess(p. 450) Đ Thedisciplineofcreativity(p.451) ã ã Creativityisasciencefilledwiththoughtprocessesthatwe areallcapableofwhenworkingwiththerightpeople Metaưideasconceptsthatcreate,nurture,andsupport otherconcepts Đ Đ Sharingideasinspiresnewideas Criticismbackedupbysupportingornewideassparksnew creativeprocesses Copyrightâ2017JohnWiley&Sons,Inc ManagingtheCreativeProcess(cont.) Đ Flowexperienceofimmersionandlossoftime whenanindividualachievesanoptimumbalanceof challenge,interest,andachievement(p.451) ã Absorptioninawellưdefinedtaskenablesonetoignore distractions Copyrightâ2017JohnWiley&Sons,Inc ManagingtheCreativeProcess(cont.) Đ Flow(cont.) ã Eightconditionsforflowintheworkplace(p.451ư452) Đ Đ Đ Đ Đ Đ Đ § Clear goals Immediate feedback Balance between opportunity and capacity Deepened sense of concentration Living in the present Personal control Altered sense of time Loss of ego Copyright ©2017 John Wiley & Sons, Inc ManagingtheCreativeProcess(cont.) Đ Teamcreativity ã Qưlevelmeasurementthatdeterminestheoptimumlevel ofgroupsizeandinteractiontoachievesuccessfulcreative output(p.453) Copyrightâ2017JohnWiley&Sons,Inc  ... Define the process of? ?entrepreneurship? ?and? ?the role of  managers as entrepreneurs Describe the opportunities? ?and? ?challenges that affect  the growth of new ventures Compareandcontrastdifferenttypesofventuresthat... Entrepreneurs encourage customers to accept new  innovation Copyrightâ2017JohnWiley&Sons,Inc HowEntrepreneurshipMakesa Difference(cont.) Đ Innovation( p.440) ã ã Processthatresultsinnewmarketvaluethroughthe creationofaproductorservice Innovation? ?adoption curve? ?–? ?staged model that describes ... Copyrightâ2017JohnWiley&Sons,Inc OpportunitiesandChallengesthat EntrepreneursFace(cont.) Đ Opportunitiesandrisksfornewventures(cont.) • Financial? ?and? ?liquidity (p. 448) § • • Initial public offering? ?–? ?first time a company sells its equity shares