Creating New Ventures
Business Plan
Building CNVs
1.
Identify Opportunities
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2.
Refine Concept
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3.
4.
Prepare concept and vision statement, draft business plan
summary
Business Plan
Determine Form for CNV
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5.
Create vision, designate venture champion, identify
entrepreneurial team
CNV, Spin-off, subsidiary, internal project
Establish CNV
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Talent, resources, capabilities transfer from parent company
Non-Profit / Public Sector
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May generate financial surplus but may not
distribute surplus to officers, investors, employees
Vision is to create social value vs economic value
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Gugenheim Museum ( http://www.guggenheim.org )
Consumer Cooperative
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REI began with 23 fellow climbers in Pacific NW
REI has 2 million active members w/63 outlets and
direct sales
( http://www.rei.com )
Family Owned
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80% of businesses in U.S. are family owned
25% of Fortune 1,000 are family controlled
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Anheuser-Busch
Cargill
Ford Motor
Gallo
Archer Daniels Midland
NASCAR
Pruitt
Family Owned
Advantages
Disadvantages
Franchises / Direct Selling
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Business Format Franchise
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Trade-name Franchise
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Wendy’s, Holiday Inn, My Girlfriend’s Kitchen
Ace Hardware
Product Distribution Franchise
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Auto Dealers, Caterpillar
Franchisee
Advantages
Disadvantages
Franchisor
Advantages
Disadvantages
Direct Sales (DSOs)
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Family focused business
Works with part-time operation
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Tupperware
Mary Kay Cosmetics
Amway
Direct Selling Association
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http://www.dsa.org
Clusters
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Geographic concentration of interconnected
companies in a particular field
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Hollywood
Silicon Valley
Napa, Sonoma Valley
Likely to find both complementary and
competitive capabilities/resources
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Employees
Infrastructure
Kissimee – Disney World, Epcot, Universal,
http://www.floridakiss.com/do/index.php
Social Responsibility:
Johnson & Johnson
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1982 - 7 Chicago residents died from cyanide
laced Tylenol
Managers overrode FDA & recalled at cost of
$100 million
3 months, 93% felt J&J had done a good job
J&J rated #1 in Fortune’s 300 most admired U.S.
corporations
Social Responsibility:
A. H. Robins
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Manufacturers kept Dalkon Shield on market after
product difficulties discovered
9,000 claims involving serious injury
Robins eventually filed for bankruptcy
Social Responsibility: Statistics
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National poll - 58% rated ethical standards of
business executives as fair or poor
Time - 76% saw lack of ethics in business as
contributing to tumbling moral standards
Street crime costs U.S. $4 billion per year
White collar crime costs U.S. $40 billion per year
Organizational Culture
Line Workers
CEO
Middle Mgmt
Senior Mgmt
Senior Mgmt
Middle Mgmt
CEO
Line Workers
Organizational Culture
External
Strategic
Focus
Internal
Adaptability
Culture
Mission
Culture
Clan
Culture
Bureaucratic
Culture
Flexibility
Stability
Needs of the Environment
Organizational Culture
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Adaptability Culture
Focus on external environment and change to
meet customer needs
3M – individual initiative and entrepreneurship
Organizational Culture
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Mission Culture
Concerned with serving customers in a specific
market but without the need for rapid change
Harley Davidson
Organizational Culture
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Clan Culture
Focus on involvement and participation of the
organization’s members
Needs of employees is the best route to
productivity
Ben & Jerry’s http://www.benjerry.com
Starbucks
http://www.starbucks.com
Organizational Culture
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Bureaucratic Culture
Internal focus and a consistency orientation for a
stable environment
symbols, heroes, ceremonies
Marine Corps, SDSM&T
Learning Organizations
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Strong adaptive culture
the whole is more important than the parts
equality and trust are primary values
culture encourages risk taking, change and
improvement
Social Responsibilities
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Economic responsibilities
Legal responsibilities
Ethical responsibilities
Discretionary responsibilities
Free Market
Hand of Government
Hand of Management
Social Stakeholders
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Shareholders
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Employees
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primary role of mgmt is to earn profit and dividends for
shareholders
managers from Film Recovery Systems found guilty of murder in
death of employee from cyanide poisoning
DuPont spent $1.5 million to renovate child-care facilities
Customers
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product liability issues (has pendulum swung too far?)
quality is the name of the game
Social Stakeholders
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Local Community
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Society
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businesses and community are interdependent and have
complementary needs
both may function more effectively with high level of mutual
support
many business leaders involved in educational reform
Nabisco - $30 million to 45 schools with innovative programs
International Community
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Union of International Associations in Brussels list of 10,000
world problems
Vanguard Companies
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try to satisfy all stakeholders
are committed to a higher purpose
value continuous learning
aim high
Atlantic Richfield, Dayton Hudson, John Deere,
Honeywell, Levi Strauss, Motorola, Weyerhaeuser
James O’Toole, Vanguard Management: Redesigning the Corporate
Future, 1986.
Monitoring Social Demands
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Social forecasting
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Opinion surveys
Social audits
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systematic evaluation of social performance of an organization
(Ben & Jerrys)
Issues management
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systematic process of identifying social trends
process of identifying emerging social issues of particular
relevance to the organization
Social scanning
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informal issues management
New Business Venture
People
Team, capabilities,
commitment
Business
Deal
Risk vs Reward,
Incentives, Ownership
+
Plan
Opportunity
Customers, Strategy
Business Model
Resources
Financial, Physical
Intellectual
Question

Green Marketplace has positioned its activities in
an environmentally friendly niche. Visit this firm
and describe its social venture.
http://www.greenmarketplace.com
Question
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A partnership between Stanford University’s Social
Entrepreneurship Startup Course and the nonprofit Light
Up the World Foundation is working to bring safe,
affordable lighting to people in Mexico, China, and India.
Students in engineering and business work to design a
lamp appropriate to the needs of villagers. Develop a brief
plan for a similar social entrepreneurship project for your
organization.
http://ses.Stanford.edu
http://www.lightuptheworld.org