Entrepren1314-05-01-12.doc

ENTREPRENEURSHIP Spring 2012 Dr. Soon Paik

Chapter 13 Growth Strategies(05/01/2012)

1. Domestic Growth Strategies

(1) types Product

Existing New

Market Existing

New

(2) overcoming pressures

Pressures Overcoming strategies

1) financial

2) human

3) management

4) entrepreneurs’

2. Global Growth Strategies

1) exporting

2) non-equity

3) direct

4) entrepreneurial

3. Expansion Growth Strategies

1) franchising

2) joint ventures

3) acquisition

4) mergers

5) leveraged buyouts

Chapter 14 Ending Strategies

1. Chapter 11 Bankruptcy:

- reorganization

- succession

- selling

2. Chapter 13 Extension

3. Chapter 7 Liquidation

Entrepren01-01-25-12.doc

Entrepreneurship Dr. Soon Paik

Chapter 1. Entrepreneurship 1 (01/25/2012)

1. Definition

- Entrepreneur:

- Entrepreneurship:

- History: Early

Middle ages

17th c.

18th c.

19th & 20th c.

20th & 21st c.

2. Entrepreneurial Process

1) identify

2) develop

3) determine

4) manage

5) start-up

3. Role of Entrepreneurship in Economic Development

- 1750

- J. Schumpeter

- Bridging gap between science and marketplace

1) Gov. 2) Corp. 3) Individuals.

4. Entrepreneur’s Decision-Making

1) effectuation

2) cognitive

3) learning from

5. Entrepreneur’s Characteristics

1) education

2)age

3) work history

4) role model

5) moral support network

6) professional support network

7) male vs. female

8) minority

9) corporate entrepreneurship

6. Small Businesses

- 25.1 m(98.5%)

- contributions: + GDP

+ employment

+ new inventions

Entrepren02-02-01-12.doc

ENTREPRENEURSHIP Dr. Soon Paik

Chapter 2. Entrepreneurship 2: Creativity (02/01/2012))

* Creativity: (1) new ideas, (2) innovations

1. New Ideas

(1) Brains: left brain and right brain

(2) Sources of New Ideas: - consumers + production process + distributors

- R & D

- Federal and State

(3) Methods of Obtaining New Ideas

1) brainstorming

2) checklist

3) forced relationships

4) attribute listing

5) big-dream approach

2. Innovation

(1) types: 1) breakthrough I

2) technological I

3) ordinary I

- uniqueness

quantity

(2) Product Development Process

1) idea stage

2) concept

3) development

4) test marketing

5) commercialization

(3) Intellectual Properties

1) patents

2) trademarks

3) copyrights

4) trade secrets

5) licensing

6) product safety/liability

7) insurance

8) Sarbanes-Oxley Act

9) contracts

** Carl Goldberg: dog seatbelt

** Goodyear: rubber + sulfa + lead

** Pirates: software

movies

Entrepren03-02-08-12.doc

ENTREPRENEURSHIP Dr. Soon Paik

Chapter 3. Business Plan 1: What, Who, Perspectives (02/08/2012)

1. What - business plan

- two questions: 1) where

2) how

2. Who - entrepreneurs

- consultants

3. Perspectives: 1) entrepreneur

2) customers

3) investors

4. Twelve Elements

(1) introduction: 1) name/address, needs

2) elevator pitch

(2) executive summary: 1) who

2) what

3) how

(3) vision/mission and goals/objectives:

1) vision

2) mission

3) goals

4) objectives

(4) environment/industry analysis:

- 3 tests: 1) reality

2) competitiveness

3) value

(5) venture description: - goods&services, size, history

(6) organization: - ownership forms (private, partner, corporation)

(7) marketing: - marketing plan (price, distribution, promotion)

(8) financing: 1) forecasted sales/expenses,

2) forecasted cash flows,

3) forecasted balance sheets

(9) production: - price vs. quality

(10) operation: - manufacturing, shipping, inventory, custom services

(11) risk assessment: 1) potential risks

3) prevention/dissolution of risks

(12) appendix: 1) resume

2) leases/contracts/agreements

3) market research data

Entrepren04-02-15-12.doc

ENTREPRENEURSHIP Dr. Soon Paik

Chapter 4 Organizing 1: Ownership (02/15/2012)

* Types: Number Sales Net Income

Sole

Partnership

Corporation

1. Characteristics of 3 Forms

Sole Partnership Corporation

1) ownership

2) liability

3) cost of org

4) continuity of bus

5) transferability of interest

6) capital request

7) management control

8) distribution of profit/loss

9) raising capital

2. Tax Issues of 3 Forms

1) sole

2) partnership

3) corporation

4) LLC/S

3. Designing

- 5 areas: 1) structure

2) goals/objectives

3) rewards

4) selection

5) training

Entrepren05-02-22-12.doc

ENTREPRENEURSHIP Dr. Soon Paik

Chapter 5 Organizing 2: Franchising and Buy-Out (02/22/2012)

I. Franchising

1. Concept and Growth

- concept

- growth

2. Types 1) trade name: car dealers, Western Auto,

2) product distribution: Exxon, Coca-Cola, McDonald, Safeway,

3) services: personnel agencies, income tax preparation, real estates,

3. Advantages 1) access to bus system

2) get management trainings

3) use national advertising programs

4) use financing arrangements

5) use proven bus-formats

4. Disadvantages 1) high fees/profit sharing

2) limited product line

3) market saturation

5. Laws: 1971

1979

6. Trends - international

- intercept

- co-branding

- baby-boomers

II. Buy-Out

1. Advantages: successful bus, good location, good financing, bargain

2. Disadvantages: losing bus, bad location, bad financing, over-priced

3. How to Buy?

1st step: self-analysis: interests

abilities and skills

2nd step: list: brokers, banks, accountants, lawyers,

Newspapers/trade journals, trade ass, www.

3rd step: investigating: 5questions: Why to sell? What firm’s assets?

What market potential? How financial? What legal?

4th step: evaluating: (1) balance sheet

(2) income statement

(3) market

5th step: negotiating: 5Ps: 1) preparation, 2) persuasiveness, 3) poise,

4) patience, 5) persistence

Bargain zone

Entrepren06-02-29-12.doc

ENTREPRENEURSHIP Dr. Soon Paik

Chapter 6 Marketing 1 (02/29/2012)

* marketing plan: 3 questions: 1. where has been?

2. where to go?

3. how to get there?

I. Situation Analysis

1. upside-down pyramid approach

Situations

Goals/objectives

2. survey methods

Costs speed depth response rate

Telephone

Mail

Personal

Internet

II. Goals/Objectives

1. target marketing

- cases: Chico’s

DLNY

Pulte

- guerrilla marketing: 1) find

2) do

3) concentrate

2. market segmentation

- by customers’ characteristics

1) geographic

2) demographic

3) psychographic

- by customers’ buying patterns

1) products

2) usage

3) time

Entrepren07-03-07-12.doc

ENTREPRENEURSHIP Dr. Soon Paik

Chapter 7 Marketing 2 (03/07/2012)

III. Strategies

1. marketing mix: 4 elements: (1) G&S, (2) price, (3) distribution, (4) promotion

(1) goods/services

- product cycle

(2) price

- 3 factors: 1) costs

2) markups

3) competitive

- price/quality strategies: quality

Low high

Price high

low

(3) distribution

- directness:

- number of channels

(4) promotion

- market communications

1) advertising

+ expenditure by medium

TV

Direct mail

Newspaper

Radio

2) public relations

3) sponsorship

4) personal selling

2. budgeting: - percentages

- hiring

- saving

3. implementing/monitoring

- implementing:

- monitoring:

Entrepren08-03-21-12.doc

ENTREPRENEURSHIP Dr. Soon Paik

Chapter 8 Marketing 3: E-Commerce and Global Marketing (03/21/2012)

I. E-Commerce

- on-line purchases

- strategies

(1) market: 1) who are customers?

2) what customers want?

(2) domain

(3) search

(4) order

(5) privacy

(6) security

2. Global Marketing

- country screening matrix

Market factors country 1 country 2 country 3 ….

- strategies: 1) world

2) trade

3) joint

4) foreign

5) international

6) counter

7) exprting

8) international

- barriers to international trade

1) domestic

2) international: [1] tariff

[2] non-tariff

3) political

- international trade agreements

+ GATT

+ WTO

+ NAFTA

+ KORUSFTA

Entrepren09-04-04-12.doc

ENTREPRENEURSHIP Dr. Soon Paik

Chapter 9 Financing 1: Financial Plan (04/04/2012)

1. Projected(Pro Forma) Financial Statements

- balance sheet:

- income statement:

- cash flow:

SAM’S BALANCE SHEET

Assets Liabilities

Current Current

Fixed Long-Term

Intangible Net Worth

Total Total

SAM’S INCOME STATEMENT 1st year 2nd 3rd

Net sale

Cost of goods sold

Total expenses

Net income

SAM’S CASH FLOW jan feb mar dec

sales

disbursements

cash

beginning balance

ending balance

2. Valuation

(1) Ratio Analysis

- liquidity ratios

1) current ratio:

2) quick ratio:

- leverage ratios

3) debt/asset ratio:

4) debt/net worth ratio:

- operating ratios

5) average inventory turnover ratio:

6) total asset turnover ratio:

- profitability ratios

7) net profit/sales ratio

8) net profit/equity ratio:

(2) Break-Even Analysis

- total cost proportions

1) break-even sales

2) break-even volume

Entrepren10-04-11-12.doc

ENTREPRENEURSHIP Spring 2012 Dr. Soon Paik

Chapter 10 Financing 2: Sources (04/11/12)

* Financing sources: 1. Internal

2. External:

1. Internal Financing: - profits; - assets sales; - payment terms extension

- cash management

- cash management:

+ cash flow Jan Feb Mar Dec

Sales $50k

Disbursements 150

Cash flow (100)

Beginning bal 300 200

Ending balance 200

+ Cash Flow Strategies

(1) account receivable: 4 point:

(2) account payable: 5 points:

(3) inventory control: 2 points:

+ Avoiding Cash Crunch

(1) bartering

(2) trimming overhead costs

(3) investing surplus cash

2. External Financing

(1) self-financing: - personal funds

- family/friends

(2) debt financing

- asset base loans

- cash flow loans

- SBA 7(A)

- SBIDA

- R&D Limited partnerships

Entrepren11-04-18-12.doc

ENTREPRENEURSHIP Spring 2012 Dr. Soon Paik

Chapter 11 Financing 3: Equity Financing (04/17/12)

* sources: 1. Internal vs. 2. External

2. External Financing:

(1) self financing

(2) debt financing

(3) equity financing:

* stages of equity financing

Early stage seed/start-up capital informal risk-capital market

Expansion stage growth/expansion capital venture-capital market

Public offering stage operation capital public-equity market

Acquisition stage acquisition/LBO capital public-equity market

1) informal risk-capital market

- characters: + educated

2) venture-capital market

- types: + private

- statistics: + value

- deal: + needs

- venture-capitalist’s share

+ company’s value =

+ vc’s share =

(ownership given-up)

3) public equity market

- advantages:

disadvantages:

- procedures: + timing

+ underwriter

+ registration

+ quiet

+ qualified

+ reporting

Entrepren12-04-25-12.doc

ENTREPRENEURSHIP Dr. Soon Paik

Chapter 12 New Entry Strategies (04/26/2012)

* Entrepreneurial strategies: New Entry S. Chapter 12

Growth S. Chapter 13

Ending S. Chapter 14

1. New Entry Generation Strategies

(1) creating resource bundle: 1)

2)

3)

2) opening new entry opportunity: 1)

2)

3) making decision to enter: 1)

2)

2. New Entry Exploitation Strategies

(1) first movers’ strategies: first movers’ advantages

1)

2)

3)

4)

5)

(2) risk reduction strategies

Risks(Uncertainty) Risk Reduction Strategies

1) environmental u.

- demand u. a)

b)

- technological u. a)

b)

2) customers’ u. a)

b)

3) lead-time u. lead-time extension: a)

b)

c)

d)

(3) new organization strategies: 1)

2)

3)

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