Lisa Dinh, WS 16/17, TUM-BWL
Inhaltsverzeichnis
Introduction to Entrepreneurship
2
Lecture 1- Introduction
2
Lecture 2 – How do Entrepreneurial Managers develop new ideas &
business opportunities?
3
Lecture 3 – How do E. M. cope with the challenges of modern business
environments?
5
Techniques of Creativity (Workshop #1)
6
Lecture 4 – How do Entrepreneurial managers make decisions?
7
Lecture 5 – How do Entrepreneurial Managers make decisions?
11
Lecture 6 – How do Entrepreneurial Managers allocate resources? 13
Lecture 7 – How do Entrepreneurial managers grow &
internationalize their firms?
17
Lecture 8 – Social Entrepreneurship
20
Opportunity development (Workshop #2)
22
Multiple Choice Questions
24
Introduction to Entrepreneurship
Lecture 1- Introduction
Def.:
Activity involving Discovery, Evaluation, Exploitation of Opportunities àCreating sty
New àmobilizing resources
Entrepreneurship research:
Entrepreneur is the agent of change, source of ‘creative destruction’
à fundamental impulse to set & keep capitalist engine in motion à new…
à …consumers’ goods, …methods of production or transportation,… markets, …forms of industrial
organization
Entrepreneurial mindset is essential for all managers in today’s dynamic business environments.
Traditional & entrepreneurial managers:
2
Lecture 2 – How do Entrepreneurial Managers develop new ideas & business opportunities?
Why is a psychological perspective on entrepreneurship helpful?
àProbing entrepreneurship from just an economic perspective leaves us less than complete
Framework:
Frese (2009), Frese & Gielnik (2014)
àPersonality:1. Personality traits: re(act) in a certain way across various situations
2. stability over time àafter adolescence
3. Influenced by genetics & environmental factors àchildhood
4. Relating to broad personality factors, temperament, motives, attitudes &
beliefs
5. facilitate or restrain managers from undertaking entrepreneurial activities
Broad personality factors – the “Big Five”
Extraversion
(vs. Introversion)
Openness to
experience
(vs. Closedness)
Conscientious
(vs.
Undirectness)
Emotional
stability (vs.
Neuroticism)
Antagonism
(vs.Agreeableness)
àCreativity is important at the beginning & openness to experience!!
A typical entrepreneurial manager – Big Five profile
àMeta-analysis in social science (=quantitative approach for systematically combining results of already
existing research à conclusion about body of research)
àApproach: Quantitative (use of statistics)
àempirical study à individual subjects
àmeta-analysis à individual studies
àCombination of previous studies à new knowledge
Different
quantitative studies
in social science
(e.g. Big five)
Previous studies
show different
results for different
samples
meta-analysis:
Overview on
existing studies
3
Motives:
àInternal forces à pushing ppl into certain actions
àNeed for achievement
àNeed for autonomy
Generalized attitudes & beliefs
àrisk taking propensity
àGeneralized self-efficacy
àLocus of control (Kontrollüberzeugung)
Affect (feelings & emotions) in entrepreneurship
àStrong effect on cognition & behavior
àHighly relevant in the entrepreneurial context: High uncertainty & unpredictabilityàinfluence actions &
decisions àimp. Consequences for entrepreneurs
àinterface between affect & cognition complements
Entrepreneurial passion & its effects
(= enduring & intensive positive affect àentrepreneurial activities)
• Positive effect on: persistence, setting of more challenging goals, creative problem solving
• BUT: high levels of passion à may develop into obsession àdetrimental/downside for managers
• Harmonious p. (feel good when u work) vs. obsessive p. (feel bad when you do not work)
àEmployees& customers more committed to a venture if entrepreneurs’ passion is high
Breugst, Domurath, Patzelt & Klaukien (2012)
Do entrepreneurial managers need to have the typical profile?
• Typical profiles: average scores
• Not taking into account: managers’ roles in their firms or – industries
• Knowledge on strengths & weaknesses of one’s personality: helping choosing their role, team
mates, strategy/business model
Insights from science
Creativity involves convergent & divergent thinking (Logic, previous knowledge, rationality, intuition, gut
feeling etc.)
4
Lecture 3 – How do E. M. cope with the challenges of modern business environments?
The entrepreneurial process
1. Idea generation à 2. Opportunity development à 3. Venture or business unit foundation
à 4. Growth
Entrepreneurial management & creativity
(=Combination of nobility & usefulness)
àcan be reactive (reaction to problems, challenges) & proactive
What is a good idea?
Not difficult finding a business idea, but deciding, whether it is worthwhile investing time and money to
pursue it!
• Business idea new àhard to imagine
• Evaluation of business ideas à based on internal models, NOT rational
• Success depending on countless factors (e.g. team, resources, timing etc.)
• Journey: idea à viable business => many known & unknown unknowns (uncertainty!)
Explaining ideas to others
• 6 questions:
1. Who is the customer?
2. What is the problem product or service solves for customer?
3. Benefit to the customer of solving that problem? Measured?
4. Size of the market potential?
5. What makes your product better than comparable alternatives?
6. How capitalizing profit from product?
• Visualizing it by Prototyping: Experimentation & learning | testing & proofing | Communication &
Interaction | Synthesis & Integration | Scheduling & makers |
àfirst or original example of sth that has been or will be copied or developed àprocess of
realizing
àRapid prototyping: accurate physical prototypes, built with speed, including productivity tools
Business opportunities
= product or service à creating or adding value; market need; possibility new profit; Central concept for
entrepreneurship researchers: Entrepreneurs discover, evaluate & exploit opportunities
Baron (2006)
5
The sources of opportunities
1.
(market)
Demand Pull
Technology Push
(knowledge of
science &
technology)
2. Complex pattern of changing conditions: changes in political, economic, societal, technological
(PEST) conditions àcome into existence at a given point
àaware of & and learn more about these changes!
àAnticipate what consequence these changes will have!
àThink of potential business opportunities!
What factors contribute to opportunity identification?
Business Opportunity
Creativity
Knowledge:
>Prior experiencesàdiscovery of
particular opp.
>Other experience – other opp.
>no relevant exp. – no opp.
Ppl’s prior knowledge determines
whether or not they will identify
an opportunity!
Networks:
>Leading to an idea: friends &
family > Potential customers >
suppliers/distributors
>providing information on
technological change,
social/demographic change,
political/ regulatory change …
àencourages to go ahead &
promises support
Changes in Environment
Techniques of Creativity (Workshop #1)
Conceptual Combination (Healthy fastfood)| Analogical reasoning (Velcro) | WIBNI (Wouldn’t it be nice if…) |
Checklist method | Brainstorming | Delphi Technique | Six Thinking Hats
Identify at least one market domain + tech. competences can create benefits for end users in multiple
market domains + BUT entrepreneurs tend to identify market opp. That are known to them in the past or
closely related to their existing stock of prior knowledge
Customer needs vs. tech obsession
6
Develop a market opportunity from a technology:
Lecture 4 – How do Entrepreneurial managers make decisions?
Persuasion & Negotiation
Persuasion = form of a social influence, process of guiding ppl towards the adoption of an idea, attitude or
action à psychological & social influence tactics + communication styles & elements
Steps in the negotiation & persuasion process:
Have to be very well prepared for the discussion to persuade i.e. investors:
• What do you want to achieve?
• What does the other party want to achieve?
• BATNA (best alternative to a negotiated agreement)
• What would be a good compromise for you?
During the discussion: (It’s about questionsàlearning from each other)
• Achieving compromise
• Bargaining tactics
• Central & peripheral cues to persuade
• Asking questions to guide the discussion
(1) Preparing the discussion
•
•
•
Your position
What do you want to achieve?
àdefining a goal
BATNA?
àAlternatives: abonding a not favorable
negotiation (Plan B?)
Comparing your goal and your BATNA:
àpossible trade-offs?
àissues & terms u care about the most
àgood outcome? Minimum outcome?
Unsatisfactory outcome?
àdifference between Plan A & B?
(if B very worse than Aàcompromise?)
•
•
•
The other party’s position
Achieve?
àDifferent groups of ppl àdifferent interests,
needs & wants
àKnowing interests àbenefit from deal?
àKnowing interests & values of
otheràcommon basis & emotional bond
Concerns?
àhelps you to prepare counterarguments &
responses ( be proactive in preparing the
discussion)
BATNA
àpredict how other will behave in discussion
7
(2) During the discussion: Bargaining tactics
•
Bargaining vs. collaboration & cooperation
Bargaining: all wins on one side à losses on the other side (competitive situation); each part will
have some losses to find the settlement
•
Tactics (unethical, by using the techniques excessive it can damage your representation)
àReciprocity*
àCommitment & consistency**
•
All these techniques are two-edged sword
àentrepreneur use them to influence sb
àBUT if manipulation is recognized à end of all business relationships
*Reciprocity:
àtry to repay in kind what another person has provided us (You do sb good that they feel indebted to you)
àUninvited debts
àReciprocal concession
à2 techniques: “That’s-not-all-folks”: Increasing the offer or reducing the costs
“Door-in-the-face”: Making an extreme request & follow it up with a more
reasonable one
www.vinh.ly
www.vinh.ly
**Commitment & consistency:
àPressure to behave consistently with a choice or an opinion
àCommitment most effective when public, effortful or viewed as internally motivated
à2 techniques: “Foot-in-the-door”: Escalating pattern of requests
www.vinh.ly
“Low-balling”: Inducements that are withdrawn after a commitment is made
www.vinh.ly
8
Take aways
• Before negotiating think of yourself…
àKnow your goals
àDefine the minimum acceptable compromise for you
àBe aware of your BATNA
• ... but keep in mind your negotiation partners
àImagine their goals
àBe aware of their BATNA
àdraft possible negotiation strategies
à…but never destroy your business relationship by being too manipulative
Managing failure
• Failure rates high because of Overoptimism | Insufficient planning | Wrong market assessment |
Team failures | Missing competencies in marketing, finance, HR management | Lack of focus &
vision …
• Mistakes = process of learning
• Success tends to make you blind, failures are very brutal
• After failure ppl feel very bad à strong negative emotions
• once you got over it, you learn from it
• Feelings: personal defeat, frustration, nervous & anxious, illness, down with the nerves,
Disappointment, anger, bewilderment, depression, worry etc.
Before the storm: When should you kill a project?
àProblem: Quick reallocation of human resources àNo time for reflexivity & learning;
“Slow shutdown”: learning but neg. emotions
à“Side projects”: learning less importantàquick shutdown to minimize negative emotions
à”Core projects”: Learning importantà slow shutdown, management of negative emotions
Admitting failure: Delaying the inevitable
àWhen killing the business?
àEconomic rationality suggests immediately you are sure it will fail
àAnticipatory neg. emotions: neg. emotions you feel in anticipation of failure; helps to prepare the
failure event
After the storm: How can entrepreneurial managers recover?
àLoss of businessà generating a neg. emotional response from the entrepreneur
àcan interfere with: Entrepreneur’s ability to learn from the failure; Motivation to try again
9
Recovery process
àno neg. emotional response from thoughts about the events surrounding & loss of business
àprimary description of process of recovering from failure:
1. Loss-orientation
àsitting down & trying to understand how you failed, etc. à breaking emotional bonds to the
object lost
àconfrontation (physically & mentally exhausting)
àevoking a sense of yearning for the way used to be
àrelief, events surrounding loss are finally over
2. Restoration-orientation
à Based on avoidance & proactiveness toward secondary sources of stress arising from a major
loss
àsuppression (mental effort --> neg. consequences for health?)
àopportunity to address secondary causes of stress
àreduce emotional significance of the loss (Giving yourself a break)
Oscillating of both orientations:
Obtaining benefits of each & minimize the costs of maintaining one for too long
After the storm: Managing neg. emotions of employees
Shepherd et al. (2009b)
Self-efficacy: “We will get over it”
àFailure self-efficacy: Believe that one has the capabilities, motivation & cognitive resources to
recover from failure
àSocial support: Team work, relationships with other firms & business partners
àRituals: Shoot a cannon, “Perfect failure parties”
Failure management take aways
à frequent for entrepreneurial projects
à”Successful” failure: learning & motivation to start anew
àSystematic process: cope with neg. emotions
àorganizational learning & help firm & members to become even stronger
10
Lecture 5 – How do Entrepreneurial Managers make decisions?
Decision making in the entrepreneurial context
Nature: High uncertainty | Time pressure | Emotional intensity (attachment to projects) | Ambiguity |
Consequential extremes
Shepherd, Williams, & Patzelt (2015)
Abb: Overall system: There are the Decision maker & the environmental conditions & Entrepreneurial activities.
Risk (probability of an outcome is possible to calculate/ knowable) vs. Uncertainty (… not possible to
determine/ unknowable)
Decision making in idea development
Goal setting: SMART
1. Specific
2. Measureable
3. Achievable
4. Relevant
5. Time-Bound
àWhat exactly should be realized?
àHow can I measure goal achievement?
àIs the goal challenging, yet achievable for me?
àIs the goal important to me?
àWhat are important deadlines?
Goal achievement: action planning
• Goals: broken down in sub-goals & plans to achieve them
• Goal intention
• Implementation intention
Entrepreneurs as effectual decision-makers
(tend to use an effectuation process àcope with uncertainty)
• Causal Process: Startàdesired outcome, focus on the means to generate that outcome
11
•
Effectuation Process: Startàwhat one has (Who they are, what they know, whom they know etc.),
Selecting among possible outcomes, sitting down & analyze their resources
{Resources ----creativity----->goal}
Principle 1: Start with means
Causation:
Effectuation:
Sarasvathy (2001)
Turning a disadvantage into business
àlooking at the flipside/downside: looking at the positive side of the things
ài.e. autistic people: specific skills, highly concentrated etc. àtrying to build on those skills: specializing
Advantages of being means-driven
not chasing investors | not waiting for the perfect opportunity | working on your strengths | stakeholders
want to shape goals àprovide the means | finding & creating opportunities that fit for you | forcing
yourself: creativity with few resources
Principle 2: Affordable loss
Causation: Expected Return à Calculate upside potential & pursue the (risk adjusted) best opportunity
Effectuation: Affordable loss àCalculate downside potential & risk no more than you can afford to lose
Affordable loss: Risk little, fail cheap
• Step 1: Assess (beurteilen) what you really need to start
• Step 2: Assess what you can afford & what you are really willing to lose
à Vast majority of ventures : start without VC or angels
à Companies start with few resources which are low priced or free
Principle 3: Form partnerships
When you can’t invest much ‘cause of little resources, partnerships can offer you facilities etc.
Causation: Competition à Set up transactional relationships with customers & suppliers
Effectuation: Partnership à Build your future together with customers, suppliers & even prospective
competitors
Form partnerships: Crazy quilt people
• Partnership “holds an entrepreneur warm”
• Wider latitude in “putting together pieces” & “choosing the arrangement”
• Large project: work with other
Advantages
• Bringing new means to the venture
• Each stakeholder only strives to invest what they can afford to lose
• Contains unexpected contingencies(=possibilities) which can be leveraged
12
Principle 4: Leverage surprise
Causation: Avoid surprises
Effectuation: Leverage surprisesàSurprises & even failure can represent new opportunities
Lemonade principle
• Unexpected = resource
• Unexpected information à new business opportunities or trigger to make adaptions to idea
• Failure might be a setback, but opportunities might be hidden in it
Unexpected information (i.e. Thomas Stemberg: Staples- The Office Superstore)
Initial failures & unexpected events (i.e. Viagra)
Summary: Effectuation in action
Sarasvathy (2001)
Lecture 6 – How do Entrepreneurial Managers allocate resources?
Important Resources: Financial | Technological | Network | Knowledge | Team | Human |
Entrepreneurial management teams
(= Group of individuals that is chiefly responsible for strategic decision making & ongoing operations of a
new venture; All team members: actively participating in development & implementation of evolving
strategy of new ventures)
• Importance:
àMajority of new ventures founded & led by teams
àcorporate decisions àteam decisions
àComplementary knowledge
àUnique nature of new venture context: Few blockers of leadership | Wider latitude of action |
Few established norms |
•
Research: Common variables
13
•
Team composition – heterogeneity vs. homogeneity
àHeterogeneity of competences often beneficial, but homogeneity in values & vision crucial!
•
Benefits
àCombination of team members’ competence, knowledge & experiences
àCompensation of individual team member’s deficits
àMore resources (financial, man-power, networks, …)
àSocial & emotional support & motivation
•
Challenges
àDifferences in preferences & visions
à Difficulties in coordination
à Problems of fairness & investment (Money, time, effort)
à Conflicts arising within the team
à Shares and profits need to be split
•
Conflicts
•
Effective Communication
Constructive communication: preventing relationship conflicts, by allowing task conflict
Constructive: considerate, doesn’t threaten, doesn’t blame, focuses on performance, concrete
suggestions for improvement etc.
Destructive: harsh, blames, threats, focuses on recipient, no concrete ideas for improvement etc.
•
How to find team members?
Either Friendship & availability or Complementary competence profiles
•
Team based on strong ties
Benefits
àavoid one type of uncertainty
(relational uncertainty)
àBuild on joint values, connect them to
your firm values & culture
Team charter: professionalize relationships!
Challenges
à Learn to have fights (distinguish
between relationship & task conflict)
àSpeak early about potential
changes in team composition
àReflect about old & new roles
àinclude others (future team
members, employees)
14
•
Team based on weak ties
Benefits
àflexibility in search for potential
partners
à Maximize your team’s human capital
Challenges
à understand others’ values & visions
àDefine your relationship & potential
transformations
àDiscuss roles & rules to establish
fairness & trust
Team charter: build up a team!
àThink about introducing certain
rituals & routines
•
Setting up the team (example for a team charter)
•
Equity distribution:
I.
Distribution of equity: “first deal”
II.
Typically: teams splitting quickly, agreeing on an equal split without longer discussion
III.
Negotiations: emotional & even stressful
IV.
Crucial issues: money, power & control in the venture
(Hunsaker, Pavetta, & Hunsaker, 2011; Mathieu & Rapp, 2009)
àCriteria:
I.
II.
àTiming:
I.
II.
Backward orientation: Idea premium | Capital contribution | Opportunity costs
Forward orientation: Serial founder | Level of commitment | Titles | Confidence in
one’s abilities & start-up
Split earlier: Attract team members | Previous work experience | Time for calm
negotiation
Split later: contributions & commitment not clear in the beginning | Future
incentives available | Business model & roles will form over time | No renegotiations
necessary after fundamental changes
15
•
Static vs. dynamic split
àUncertainty & changes in team members’ contributions
àVesting: keep equity split fair over time because founders need to earn equity stakes (Based on
time & milestones)
àAdvantages if team members leave early (unvested portion can be reallocated)
àNot perfect, but protection for all team members
•
Recommendations
à Awareness of each member’s knowledge, skills & experiences + enable team members to play
out their strength
à Define roles & responsibility
à Build up routines & structures
à Agreements about venture’s/project’s future/ their vision
à Prevent transition of task conflict into relationship conflict
à Discuss contributions to the venture/project
Entrepreneurial managers as team leaders
Task: influence, convince, inspire & motivate the business stakeholders
To make envisioned business come true you have to get resources such as: equipment | finance | partners
| employees etc.
àWin other people to support your envisioned business!
• Leadership
= influencing other people’s behavior with a specific goal in mind
= structuring & re-structuring of situations; based on interactions
•
Leadership behavior
Two important dimensions:
I.
Task-Orientation (Initiating Structure): activation, control, Central: Task
II.
People-Orientation (Consideration): trust, friendliness, respect, two-way comm.,
participation, Central: People
•
Traditional leadership behavior: Transactional Leadership
= paid per unit | motivation: financial exchange | contingent punishment | Anxiety to perform
badly | Works only when you have sth to offer in exchange
•
“Entrepreneurial leadership behavior: Transformational Leadership
Idealized Influence (Charisma): Self
confidence | Determination| Power |
Capabilities | Ethical standards | Values
Intellectual
Stimulation: Stimulate
innovative & creative
solutions by asking
questions | Refraiming
problems | No public
criticism of mistakes |
Expressing ideas
Bass'
Four I's
Inspirational Motivation
(Charisma): Formulates a
vision | Challenges trough
high goals | Symbols |
Emotional appeal |
Enthusiasm | Envisioning
attractive future states &
visions
Individualized Consideration: followers' selfconfidence ↑ | Enouraging individual growth |
Recognizing individ. differences in needs | Twoway exchange
16
•
Transactional vs. Transformational leadership (Effectiveness):
Transactional leadership
advantageous if...
•
•
•
•
Transdormational leadership is
advantageous if...
•
Leader: clear power
Standard procedures & simple
solutions exist
Ensured motivation by
(financial) rewards
Short-term goals
•
•
•
Environment uncertain &
dynamic or during crises
Solution of problems: unknown
Followers’ unconverntional or
creative actions are needed
Followers need to overcome selfinterests
àEntrepreneurs are mor frequently in situations in which transformational leadership is needed!
Lecture 7 – How do Entrepreneurial managers grow & internationalize their firms?
New entry: managing newness
• Unique conditions à liabilities of newness
àCosts in learning new tasks
àConflict: overlap or gaps in responsibilities
àUnestablished informal structure of communication
• Capitalize on assets of newness
àLack of established routines, systems, and processes à learning advantage
àlearn knew knowledge in continuously changing environment à competitive advantage
Entry strategies
1. First mover strategy
+
- Cost advantages
- Market uncertainty: Size of market? Speed of grow?
- Less competitive rivalry
Key dimensions?
- secure important supplier & distributor - Technological uncertainty: Will technology perform?
channels
Will alternate technology emerge & leapfrog over
- better position to satisfy customers
current ones?
- gain expertise through participation
- Uncertainty for customers: new product/ service
providing value?
àOvercoming by Informational advertising |
highlighting product benefits | frame of reference for
potential customer | demonstration &
documentation (Education)
2. First mover strategy
-
+
Easier to imitate the practices of a
successful firm
Reduces R&D costs
Organizational legitimacy
Reduces customer uncertainty
-
Types
Franchising (“Proven formula”)
Copying existing products & build an
advantage through minor variations
17
-
Narrow-scope strategy
Small product range àsmall number
of customer groups à particular need
Customized products, localized
business operations & high level
craftsmanship
Specialized expertise & knowledge
Highly profitable niche
Competition-related risks ↓
Risks associated with market
uncertainties ↑
-
Broad-scope strategy
Range of products across many different
market
Strategy through information provided by
learning process
Many different “fronts” of competition
Risks associated with market
uncertainties↓
Exposure to competition ↑
Growth strategies: The Ansoff matrix
Existing
Market
New
Penetration strategies
= growing by encouraging existing
customers to buy more of firm’s current
products
- Effective in encouraging frequent
repeat purchases
- Not involving anything new
- Relies on taking market share from
competitors &/or expanding the
size of existing market
Market development strategies
= grow by selling firm’s existing products to
new groups of customers
- New geographical market
- New demographic market
- New product use
Existing
Product development strategies
= grow by developing & selling new
products to ppl who already purchase
firm’s existing products
Advantages:
- Capitalize on existing distribution
systems
- Capitalizing on corporate reputation
firm has with these customers
Diversification strategies
= grow by selling new product to a new
market
- Backward integration (toward raw
materials)
- Forward integration (toward
customers)
- Horizontal integration (different,
but complementary, value-added
chain)
Product
New
Internationalization & entrepreneurship
àTry to be really big in your home country & then expand to neighbour country (Denmark etc.) (àBMW)
àAt the very beginning international & were dreaming about it from the beginning (àLogitech)
Internationalization process model 1960s / 1970s
- Perceived uncertainty & knowledge about
foreign markets à internationalization process
- Internationalization ↑ after a long period of doing business
Exclusively on the home market
Johanson & Wiedersheim-Paul (1975)
18
Born global model 1990s
- Environment: internationalized industries ↑ | Advances in ICT & transportation technologies
- Product: High degree of innovation & high specialization (shorter product life cycles) | Unique
competitive advantage | Products often standardized (quick int. roll-out)
- Customers/Market: Often niche segments | Narrow market necessitates int. growth | ‘global’ need
(homogenization of customer preferences ↑)
- Management Team: Int. background or experience: mindset | High int. entrepreneurial orientation
|Existing networks abroad à previous customers, suppliers, etc.
Motivation to go global: Swiss entrepreneurs
1. Demand from foreign customers | 2. Limited potential of home market |3. Opportunitiesinnovative products
Motivation to go global: US SME managers ( small to medium enterprises)
1. Long-term growth prospects | 2. Spreading risk across more than one | 3. Need to keep up with
competitors
Foreign market
• Selection: Central foreign market selection criteria & Central foreign market selection methods
•
Entry barriers
Institutional barriers
-Import tariffs or quota
- Local ownership restriction
(joint ventures)
-Local content clause for foreign
direct investments
Market-based barriers
- Access to distribution systems hindered
- Problems in finding skilled personnel
- Customer preferences for local companies
(“buy-local”)
•
Attractiveness:
-Market volume (number of customers, sales volume)
-Market growth (Potential growth in customers & sales volume)
-Price structure (Potential price, competitor price, price of substitute products)
-Cost structure (labour costs, costs for resources)
-Infrastructure (transport systems)
•
Entry modes:
Entry Mode
Export
=sale & shipment of products
manufactured in one country
to a customer located in
another country
Licensing (=Franchising)
= Entrepreneur (licensor) gives
a foreign manufacturer
(licensee) the right to produce
& sell a product in return for
the payment of a royalty
Advantage
•
•
•
•
Small resource
investments
Small risk
Small resource
investments
No transportation
costs
Disadvantage
•
•
Transportaional costs
Prob. With costs for
export management
firms or agents
•
Lack of control over
licensee & licensed
property
19
Joint Venture
= Two or more firms form a
new enterprise in which they
share the equity
Subsidiary
=separate, distinct legal
entities that are controlled by
a separate higher entity; the
parent company
•
•
•
•
•
Access to local
partner’s knowledge
Sharing development
costs & risks
Protection of
knowledge &
technologies
Autonomous decision
making & strategic
planning
•
•
•
•
•
No autonomous
decision making
Coordination efforts
Conflicts with
partners (instability)
High investment costs
High risks
Eclectic Theory
Correlation between choice of market entry mode & certain advantages:
1. Ownership advantages (Product innovations, patents, technological advantages)
2. Internalization advantages (Advantages that are realized by keeping a resource internal
àTechnology & know-how)
3. Location advantages (Resource costs, labour costs, infrastructure, transportation)
Lecture 8 – Social Entrepreneurship
Factors leading to social problems
20
What is social entrepreneurship?
= application of the mindset, processes, tools & techniques of business entrepreneurship to the pursuit of
a social and/or environmental mission
=many different activities finding a home under a broad umbrella of activities / processes to enhance social
wealth
= role of change agents in the social sector by:
1. Adopting a mission to create / sustain social value
2. Recognizing & relentlessly pursuing new opportunities to serve that mission
3. Engaging in a process of continuous Innovation, adaptation, & learning
4. Acting boldly without being limited by resources
5. Exhibiting a heightened sense of accountability to the constituencies served / for the outcomes
created
Social & commercial entrepreneurship
Sahlmann (1996)
Austin, J., Stevenson, H., & Wei-Skillern, J. (2006)
Different types of organizations
21
Compassion: individual motivation for social entrepreneurship
Miller, Grimes, McMullen, & Vogus (2012)
àResearch: new organization more effective to alleviate others’ suffering than already existing
onesàentrepreneurial compassion organizing
Opportunity development (Workshop #2)
The difference between start-ups & companies
Solution is NOT your product. Your business model is your product
„Back End“
„Front End“
Your Product/
Service
Business Model Generation,
Alexander Osterwalder (2010)
22
Business Model Canvas
-Who Key partners &
Key Suppliers?
-Which Key
Resources are we
acquiring from
partners?
What K. R. value
proposition
require?
-Revenue streams?
- customer rel.sh.?
- Distribution ch.?
i.e. Production,
Network, Prob. Solving
-Which Key Activities
do partners perform?
Motivation: Optimization
& economy of Scale,
Reduction of risk &
uncertainty, acquisition
of particular resources &
activities
-What K. R. value
proposition
require?
-Revenue streams?
- customer rel.sh.?
- Distribution ch.?
- What value do we
deliver?
- Which prob. Solve?
- Which needs are we
satisfying?
- What products &
services are we
offering to each
customer segment
-i.e. newness, price,
design, performance,
brand, convenience
-Type of
relationship? Which
ones established?
-How integrated with
rest of business m.
- cost?
i.e. Self-service, Personal
assistance
-For whom are we
creating value?
-Who are our most
important
customers?
-i.e. Mass/ Niche
Market, Diverisifed
- Which ones work best, most coefficient?
- Through which Channels Customer Segments
wants to be reached?
-How reaching them, our Channels integrated,
integrate them with customer routines?
- i.e. Own sales/stores, Web Sales
i.e Physical, intellectual
Human, financial
-What most imp. costs?
-Which KR & KA are most expensive?
-How long is the invest period?
- Paying method? How/for what currently paying?
- For what values customers willing to pay?
- How large/range each Revenue Stream?
Value or cost driven?, fixed/ variable costs, economies of scales/scope
Advertising, Sales, List price, Product features, Negotiation, Yield Man.
But what if your customers are not your users?
23
Multiple Choice Questions
24
Lösung: D, A, D, A, D, D, B, B, A
25